Banana Republic (GPS) has never been shy about offering deals and promotions, often in the form of coupon codes and in-store sales with big percentage-off discounts. But for the last few weeks, the retailer has seemingly gone deal-crazy. Here’s a snapshot from my inbox:
As you can see, the retailer has run a percentage-off sale every day for the last two weeks – starting at 25%-off to kick of the new year, then bouncing back and forth between 30% and 40%. (I’m especially fond of how the retailer tells me that I have “just hours left” to save 30%, then comes back the next day to offer 40% off.)
And it isn’t just Banana Republic going deal-crazy this month. We asked the folks at deal-tracking site Dealnews to take a look at their data and see if we’re seeing more discounts than usual this January. The results speak for themselves.
“In fact, we experienced a 38% increase in Editors’ Choice apparel deals during the first 16 days of 2013 versus the previous year,” said Dealnews CEO Dan de Grandpre in an email (Editor’s Choice deals are exceptional discounts or all-time-low prices). “Apparel deals have really amped up in 2013, but also interesting is that it’s not just on winter apparel as one would think. For example, basics like socks and underwear have also been marked down, and Target’s Neiman Marcus joint venture hit 70% off its selection of high-end designers.”
In other words, it’s not just the usual seasonal apparel discounts happening right now — everything from socks to designer clothing is on sale. And the discounting isn’t limited to clothing retailers: Dealnews data suggests an even bigger uptick in consumer electronics discounting, with the site seeing a 47% increase in Editor’s Choice deals for the first two weeks of 2012.
So if you’re looking to freshen up your wardrobe or get some new electronics, there’s no better time to buy. But why?
One possible culprit is the weaker-than-expected holiday season retailers just experienced. The sales figures were a mixed bag: While the early returns predicting 0.7% growth over 2011 now look a bit pessimistic, it looks as if retailers were only able to salvage decent sales growth by heavily discounting in the last few days of the season.
“I think the holiday, I’d describe it as mixed — I don’t think it was great, I don’t think it was horrendous,” confirms Jon Lucas, president of CIT trade finance. “A lot of that momentum [from Black Friday weekend] kind of eased as we headed into the holiday season, and my sense is that there was a lot of discounting.”
It stands to reason that retailers are continuing those deep discounts into January to maintain sales.
“What happened in December is that each week the promotions started to intensify,” says NBG’s Brian Sozzi. “The promotions aren’t increasing [in January], but they haven’t backed off.” He also notes that the quarter ends in January for most retailers, which provides extra motivation to boost sales figures with promotions.
Sozzi does offer one more reason why retailers need huge discounts to get people in the door right now: The wares on display just aren’t enticing anyone.
“It’s a function of retailers not getting it — they’re continuing to think people want spring goods right after the holidays,” he says. “I walked into the Gap the other day, and it looks like a crayon box.”
Whatever the cause, there’s no doubt that the usual holiday sales are even more lucrative for consumers than usual. If Santa didn’t bring you everything on your list, now is the time to do some shopping.
Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.