You Won’t Believe Gymshark’s 4th of July Discount Strategy!

I’m obsessed with hacking price strategies to get better results in e-commerce, and that’s no secret to anyone! This time, I took a deep dive into Gymshark ’s sales price structure. I did some web scraping of their site on the 1st, 3rd, and 5th of July to understand their pricing tactics and see if there was anything else to uncover.

First up, let's talk about the conditions of Gymshark's promotion strategy for these days!

1. Step 1: From the beginning of the week to the 3rd of July, Gymshark offered up to 60% off for women’s and men’s apparel and 50% off for gym clothes all applied with a marckdown discount, the frictionless way to do it. ????
2. Step 2: From the 4th to probably the 7th of July, they doubled down by adding an extra 25% accumulated discount coupon (crazy, right? ??). This strategy is something we’ve seen before, even when we implemented it with our biggest client, True Classic.

This second step made some exciting things happen from the customer’s perspective, like socks at $1.20 or hoodies at $15. Let's get nuts right, right?

But here’s the trick: these kinds of super crazy deals are only for certain unpopular colors or sizes. ????

Here’s the first lesson: you can dive deep into specific products by mixing your inventory strategy with your promotional plan. This way, you can offer great deals, make your holiday sales super relevant, and get rid of inventory that’s been costing you extra in the warehouse. ?????

In the case of the Heritage Washed Hoodie, this was the price structure: Gymshark went from a 20% discount to 70% off, plus an extra 25% on the 4th of July. This is a very precise way to execute a pricing strategy. It can be a major challenge if you have thousands of SKUs (Gymshark had 394 unique products on sale with over 1K color variations), but it’s worth it in terms of demand generation, revenue increase, and inventory management. ????

It’s all about shaping the demand curve as effectively as possible, leading to a better Average Order Value (AOV) and improved sales velocity. ???? Sure, offering a flat 40% discount is easier, but it’s also less attractive and less effective. ??♂?

But how was the entire discount distribution applied? ?? Let’s break it down!

The following is the discount distribution on the first day of the promotion:

? The majority of the store (64% of the products) is discounted between 10% and 40% off.

? There is 21% of the products discounted between 40% and 50% off.

? A small portion is discounted between 50% and 70% off. ??

In Europe, this distribution and the message “up to 60% off” could be an issue due to regulations. However, according to US law, this distribution is okay. Considering that they also included an extra 25% discount, it makes sense.

The second learning here is from a communication standpoint. If you start early on Monday but the big day is on Thursday, like in this case, you’ll probably begin with a more conservative discount distribution. That’s why the majority of discounts are between 10% and 20%. They are counting on those products being at a maximum of 45% off with the big day’s extra discount added by a coupon code.?

But does the distribution change after the 25% extra discount by coupon code is launched? ?? Let’s dive into that next!

Believe it or not, there were even more products at a higher discount of 70%, and almost all discount categories between 10% and 40% were reduced from around 20% to 15%. So, after a couple of days, the distribution looked more balanced across discount ranges.

This result looks like Gymshark has some sort of automated discount engine, the increase in the 70% discount share was likely due to products increasing their discount as popular variants sold out at smaller discounts.

This distribution addresses the “up to 60%” discount and almost reaches “up to 70%.” Adding the extra 25% on top makes this a huge deal for a brand with Gymshark’s level of product quality.

Other fun facts about the distribution:

? Fit Types: Slim fit and oversized categories are the most distributed in terms of discount, with the majority of the volume around 30% and 50%.

? Color: Black appears in every discount category as the product with the most SKUs, followed by white and navy. This demonstrates that the strategy is not entirely driven by color. However, some colors received bigger discounts, like Silhouette Grey, which was most popular at 70% off. Other highly discounted products were light gray, desert beige, and some other more muted, earthy tones. ??

Conclusion:

As basic as it sounds, it looks like Gymshark structures its promotions with a combination of the following factors:

1. Tiered Discounting: Starting with more conservative discounts early in the promotion period and ramping up to higher discounts closer to the big sale day. This helps build anticipation and manages inventory levels effectively.

2. Targeted Deep Discounts: Offering significant discounts on specific, less popular colors or sizes to clear out inventory. This ensures that even slow-moving stock gets attention without diluting the perceived value of more popular items.

3. Automated Adjustments: Utilizing an automated discount engine to dynamically adjust prices based on inventory levels and sales velocity. This ensures optimal pricing at all times, maximizing both revenue and inventory turnover.

4. Strategic Communication: Communicating the “up to” discount message while ensuring compliance with regional regulations. This transparency builds trust with customers and enhances the promotion’s effectiveness.

5. Customer-Centric Offers: Crafting offers that are attractive and compelling to customers, such as the extra 25% off coupon, to drive urgency and boost sales during key promotional periods.

My Qualification of Gymshark's Price Strategy:

Communication Mastery: ?????

Gymshark nailed it! As crazy as it sounds, running a double discount campaign seems like a brilliant marketing move to generate more excitement and sales, as long as the deals are genuine and not just inflated prices before the discount.

Complex Implementation: ????

Implementing this strategy is no small feat. Rounding prices could create more appealing offers, but extra points for managing such a vast number of items. This complexity shows their dedication to maximizing their promotional efforts.

Craziness: ?????

They went all in, and I love it! Trust is the key to a successful promotion. Knowing your numbers and opportunity costs is crucial, and Gymshark demonstrated they have a solid grasp on both.

Thanks for reading until here! ?? If you want to craft pricing strategies like the big brands - True Classic , WIN Brands Group , Atoms, Monica + Andy , or our new partner ORTTU and more, don’t hesitate to call Aument . ??

Here’s a little demo of how our app can make this kind of stuff happen in minutes:

https://app.arcade.software/share/XMQwGkWOK9mDPMpv2hlU