Beyond the discount: Digital marketers appeal to holiday shoppers with personalized ads, experiences

It is risky to hold on to old inventory for the purpose of marking it down because it might not sell. But this strategy paid off for outdoor apparel retailer Mountain Khakis for the 2022 holiday season.  


The retailer kept its new merchandise at full price and placed its older inventory it held back in 2021 to sell at a discount during the holiday season 2022.  


Mountain Khakis’ average order value increased 20% to roughly $150, above its typical $125, during the 10-day period Nov. 20-29, 2022, says Jeremy Hale, the brand’s president. This period includes the critical Cyber 5 shopping period of Thanksgiving through Cyber Monday.  


“What we learned through this strategy is staying full price on our new releases and holding [older] inventory that hasn’t sold out drove a really good result for us,” Hale says. 


In addition, Hale manually checked competitors’ ecommerce sites each day during the 10-day holiday selling rush around Thanksgiving to see how aggressive competitors got with their discounts.  


“We saw some of our competitors going sitewide with their discounts,” he says. “You start to get nervous about whether our deals are not as attractive. Will that wallet share go somewhere else?”  


Hale learned Mountain Khakis wasn’t the most aggressive, but it fell somewhere in the middle. And shoppers still responded. Its conversion rate during the Nov. 20-29 period was more than 4% higher compared with the rest of the year. Hale did not share its typical conversion rate. 


And 8% of customers that shopped during the 10-day period returned to shop within the following 30 days — this time for full-priced items, Hale says. 

Online retailers offered shoppers plenty of discounts and holiday promotions this season. The average discount was 21% for online merchants during the 2022 holiday season, compared with 19% during the 2021 holiday season, according to data from ecommerce platform provider Salesforce Inc. But, after a year plagued with out-of-stock notifications in 2021, online retailers had inventory ready in 2022 — and many shoppers were happy to pay a bit more to get what they wanted. Mountain Khakis noticed that some customers returned to the retailer’s website to buy full-priced merchandise within 30 days of buying sale items. Duluth Pack noticed online shoppers opted for more expensive merchandise in 2022 that was out of stock in 2021. And apparel brand The Natori Co. does not offer deep discounts. Instead, it used livestreaming events to appeal to holiday shoppers, resulting in increased online sales of full-priced items.  

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