A First Read on Cyber Week 2020

What should retailers expect during a Cyber Week in a year that has defied all expectations? One thing was certain - online shopping would increase - but by how much?

This data from Adobe Analytics showed that while, yes, online shopping certainly increased, it was on the lower side of what was expected. [Early data from Adobe indicates that Cyber Monday](https://techcrunch.com/2020/11/30/cyber-monday-2020/) - the most digital of all the shopping days - reached $10.8 billion in sales. For context, the predicted range for online spend was set between $10.8 billion and $12.7 billion. Nonetheless, 2020's Cyber Monday sales still rang in at an increase of 15.1% from 2019's online sales.

So how did retailers execute their Cyber Week strategies? Let's examine it by sector and geographic region.

US Specialty Market

It's been a tough year for many specialty apparel retailers. They've seen store closures, strained supply chains, and consumers whose fashion needs have dramatically shifted.

From left to right: Bandier, Free People, Revolve, H&M, Zappos

Going into the season, we have to note that discounts in this sector are plentiful, even in more optimal sales environments. With that in mind, we see that specialty retailers had 60% of goods marked down during this Cyber Week. This was a sizable and significant increase from last year's 48%.

What's more, average discounts, or how high those discounts are, have also increased from last Cyber Week. This year they averaged 26%, versus 19% one year ago.

Most likely to be marked down: Shorts, Dresses, Jumpsuits/Rompers, Flats, Skirts

Least likely to be marked down: Backpacks, Sneakers, Slip-on Shoes, Handbags, Boots

US Luxury Market

We've talked about it since the onset of the pandemic - luxury has seen discounting levels this year that have previously been extremely rare.

From left to right: Saks Fifth Avenue, Bloomingdales, Moda Operandi, Farfetch

While things had started to stabilize in terms of discounting over the summer, the recovery in the US market is still on quite shaky footing. Let's take a look at how luxury retailers approached Cyber Week.

We saw that during this Cyber Week, 43% of products at luxury retailers were marked down at the item-level. This marked a significant increase from last year where 35% of products were discounted.

A similar increasing trend was apparent in average discounts, where during Cyber Week we saw an average discount of 20% (compared with 15% in 2019).

Most likely to be marked down: Jumpsuits, Dresses, Casual Jackets/Blazers, Skirts, Suits

Least likely to be marked down: Slippers, Handbags, Gym/Business Bags, Backpacks, Sneakers

US Beauty Market

You might say the beauty market is the envy of the fashion industry, as it doesn't typically have to utilize the heavy-handed promotional techniques that many apparel retailers do, even while selling at the same department stores who do major discounting on the fashion side of their business. But that doesn't mean they're immune from getting into the Cyber Week action - it just looks a little different than other industries. How so? Let's take a closer look.

From left to right: Ulta Beauty, Dermstore, Peach & Lily, Net-a-Porter

There's a few themes to take note of here. The first of which is that discount penetration for beauty products is considerably lower than we see in other retail sectors. It was, however, higher this Cyber Week than it was one year ago (12% in 2020 vs 8% in 2019).

The second theme is that average item-level discounts are extremely low, both this year and last. Despite the impact of COVID, the beauty industry is maintaining discipline in its discounting practices.

Most likely to be marked down: Body Makeup, Haircare, Toothcare

Least likely to be marked down: Tweezers/Brow Tools, Deodorants, Eyelash Curlers

Home Promotions

For many home retailers, 2020 has been a boon to their business, as consumers invest in their home spaces. But are home retailers going heavy on this discounts this Cyber Week, or are they showing restraint?

From left to right: Wayfair, Overstock, Great Jones, CB2

We see that for the home retailers in our sample, 69% of goods were marked down this Cyber Week. Compare this with 78% of products being marked down one year ago. So what we're seeing is that while basically every three out of four products is marked down, it has declined from last Cyber Week.

We also see a similar theme playing out in average discount levels. This Cyber Week saw average discounts of 28%, compared with 33% in 2019.

This slight pull back in discounts could mean that retailers, especially those department stores selling home goods whose apparel businesses have been quite exposed this year, are pulling back discounts as they see stronger performance in home categories.

Most likely to be marked down: Rugs/Carpets, Mattresses, Bath Textiles, Slip Covers, Window Treatments

Least likely to be marked down: Patio Bars, Bathroom Storage, Sofas, Patio Tables, Bakeware

European Cyber Week

These days Black Friday is more of a global event, and particularly in a year where apparel sales have been battered and second rounds of lockdowns are still in the mix, Cyber Week provides a welcome opportunity to boost digital sales.

From left to right: JD Sports (FR), Mango (DE), Scotch & Soda (DE), Esprit (FR), Coach (UK)

So what did discount trends tells us about the state of Cyber Week in Europe? First off, we saw that all four countries in our sample had more than 50% of items marked down on their sites during Cyber Week, with Germany having the most products marked down (60%). For context, these are at or near the levels we saw during this year's key July sales period.

In all markets except France, discount penetration was higher this Cyber Week than last. Italy's increase this year was particularly marked: its average discount penetration during Cyber Week went from 42% in 2019 to 53% in 2020.

When looking at how high those discounts were across markets, we saw that during Cyber Week 2020, average discounts hovered near the 20% mark for the four countries in our sample. These were similar average discounts to what we saw last Cyber Week, except Italy which also saw a four percentage point increase (from 15% to 19%).

Most likely to be marked down (France): Jumpsuits, Bridal, Swimwear, Tracksuits, Shorts
Least likely to be marked down (France): Business Bags, Face Masks, Wallets, Luggage, Eyewear

Most likely to be marked down (Germany): Jumpsuits, Swimwear, Lace-up Shoes, Dresses, Shorts
Least likely to be marked down (Germany): Umbrellas, Business Bags, Wallets, Luggage, Face Masks

Most likely to be marked down (Italy): Jumpsuits, Swimwear, Dresses, Hair Accessories, Flats
Least likely to be marked down (Italy): Business Bags, Cufflinks, Slippers, Watches, Wallets

Most likely to be marked down (UK): Hair Accessories, Jumpsuits, Swimwear, Suits, Dresses
Least likely to be marked down (UK): Business Bags, Slippers, Watches, Luggage, Wallets

Giving Tuesday

Tuesday was Giving Tuesday, a day to promote charitable giving. Many retailers do some type of scheme whereby they donate a portion of that day's sales to various causes. In a year like 2020, we've never needed these organizations more.

If you're able and inclined, consider giving this season to an organization that's doing the critical work of keeping families fed and clothed. Here are some of our favorites:

World Central Kitchen. WCK uses the power of food to heal communities and strengthen economies in times of crisis and beyond. When disaster strikes, WCK’s Chef Relief Team mobilizes to the front lines with the urgency of now to start cooking and provide meals to people in need.

UN World Food Programme The UNWFP operates in more than 80 countries and focuses on initiatives from emergency relief to building resilience in communities.

One Warm Coat. One Warm Coat provides free coats to people in need.