November 17, 2022

Where Are The Discounts Being Applied?

Sometimes discounts/promotions are applied to items via liquidation efforts. This is one of those cases.

In this table, each row represents a group of customers. Best customers are at the top of the table (5% = best decile of customers, 15% = next best decile of customers). New/Reactivated buyers are at the bottom of the table. Meanwhile, item sales are rank-ordered across the top of the table. The best items are in the 5% column, the worst-selling items are in the 95% column.

Which cells (red) represent customers buying discounted products? The columns at the far right side of the table tell the story ... the worst-selling items are selling at/above their historical average price point about 70% to 75% of the time. The best-selling items sell at/above their historical average about 85% of the time.

So we have two dimensions at play ... marketers are offering discounts/promotions, no doubt about it. But at the same time, the merchants are liquidating lousy products. Both parties contribute to the challenge ... as is generally the case.

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