As the turkey was eaten and weather turned cold, North American shoppers turned to their computers and mobile devices to seek deals. This year, more than ever before, retailers rewarded their quest.

According to the latest findings from DynamicAction’s newly released etail Index: Holiday 2016R, an analysis of more than $8 billion in consumer transactions globally, retailers turned to promotional offers, like 30 percent off and buy one get one free, more than ever.

Thus far in 2016, orders using a promotion are up 34 percent versus 2015 and up 52 percent over the holiday season (Nov. 1-Dec. 5) versus 2015 in North America. This reliance on promotions reduced product profit margins by 19 percent YTD versus 2015 for North American retailers.

Other findings include:

  • Marketing cost and customer acquisition: Retailers saw an uptick in marketing costs throughout the year, with a 7 percent increase YTD versus 2015 and a 25 percent increase over the holiday season.
  • These increases in marketing costs in 2016, especially during the holiday season, were positioned to drive new customer acquisition, but North American retailers failed to get the number of new shoppers they needed in the digital door. New customer acquisition was down 12 percent YTD and 6 percent over the holiday season.
  • Inventory effectiveness: Due to overstocks in the first half of the year, retailers held an average 12 percent more inventory YTD than in 2015. However, they are doing a better job of keeping merchandise on the digital shelves that shoppers are actually viewing online, with a 3 percent higher rate of availability for items shoppers are seeking.
  • Early returns indicators: Retailers will need connected data to keep a close eye on their return levels, their customer reviews and their return codes, as they are entering the highest return season of the year (post-Christmas) in a negative position. The value of returns are up 6 percent YTD versus 2015 and up 26 percent over the holiday season.

“From BOGO offers to 40 percent off everything, Amazon began this process of training consumers to expect a sale, but nearly every major retailer has now joined in this costly race to the bottom,” said Sarah Engel, SVP of Global Marketing for DynamicAction.

“In order to cut through the clutter and answer shoppers’ emotional desire to get a good deal, promotions have become table stakes for the holiday season. However, customer-centric retailers, who will also drive profits, are those who understand their cross-organizational data and act on it quickly to provide excellent shopping experiences and promote wisely without destroying profit margin.”