More and more, I have seen retailers falling into the trap of using markdowns as a pricing strategy. This strategy was on full display over the 2016 holiday season. "Median discounts across top retailers during Thanksgiving weekend increased by 5 percentage points to 16 percentage points over 2015," according to Boomerang Commerce, a provider of retail pricing technology. In addition, Boomerang reported that Target's median discount for products listed on the first page of their black Friday deals page rose an additional 27% from last year to 43%! Walmart's average discount on promoted items rose from 28% to 33%, a whopping 17%! People walk past a Wal-Mart Express store in Richfield, North Carolina, U.S., on Friday, Jan. 15, 2016.
As 2016 gets underway, retailers must be well past the point of retail-as-usual. We're in an industry in transition, and, as such, I'd like to share some transformative trends that innovators will leverage to shape customer engagement in 2016. Predictive Analytics And Machine Learning Predictive analytics aren't new -- remember a few years back when Target used predictive analytics to promote pregnancy products to a young teenage woman whose parents didn't know she was pregnant? Predictive data -- and the means retailers use to analyze it -- has matured, and retailers can rely on the analytics to avoid markdowns and out-of-stocks as well as optimize prices and purchase quantities.
That was apparent on Black Friday, the day after Thanksgiving, as shoppers were careful about what deals they'd jump at and retailers pushed different ways to connect with customers. That was apparent on Black Friday, the day after Thanksgiving, as shoppers were careful about what deals they'd jump at and retailers pushed different ways to connect with customers. That was apparent on Black Friday, the day after Thanksgiving, as shoppers were careful about what deals they'd jump at and retailers pushed different ways to connect with customers. Consumers spent $3.34 billion shopping online on Friday, a 21.6 percent increase from the same day last year, according to Adobe, which tracks online retail transactions.
Amazon.com Inc.'s takeover of Whole Foods Market began five weeks ago with a lot of fanfare about lower prices. And while the grocery chain has strategically marked down select items like avocados and almond milk, overall prices have dropped very slightly -- about 1% -- since Amazon took ownership, according to an analysis by research firm Gordon Haskett. The firm tracked prices on 110 items over five weeks at a Whole Foods location in Princeton, N.J., and found that, on average, prices are down 1.2% since Amazon finalized its $13.7-billion purchase of the grocer. And although Amazon offered discounts on a number of items right away, some of those prices have crept back up, according to the data. The price of frozen foods, for example, was 7% higher on Sept. 26 than on Aug. 28, when Amazon officially took over.