The dynamics of discounts, concessions and secondary markets are changing. These markets are growing, evolving, and driven by consumer behavior. This change is important for CPG teams managing excess inventory.
By 2025, these channels will no longer be the quiet end of the retail spectrum. The risks of the discount market are starting to outweigh the opportunities. But to take advantage, CPGs need the technology and data visibility to meet the challenge.
Let’s take a look at the big trends in the secondary market this year, what to look for going forward, and how CPGs can leverage these changes to improve clearing efficiency.
The U.S. discount and off-price retail market is accelerating.
Off-price and off-price retailing is expanding rapidly in the United States, and you don’t have to look hard to find evidence.
In TJX’s most recent earnings call, management said, “Customers are attracted to our outstanding value and brand… Customer transactions It’s up in every department.”
Grocery Outlet’s third quarter net sales increased 5.4% year-over-year. Gross margin at top of guidance The store opens ahead of expectations.
Ross’s total sales increased 10% in the third quarter, with broad-based growth across all categories. In the fourth quarter Ross predicted the highest increase in a decade.Comparable store sales expected to increase 3-4%
For CPGs, this all represents opportunity. But with opportunity comes competition and more stringent expectations on price, delivery, and brand integrity. Clearing can provide more upside, but only for CPGs that approach liquidation with structure and discipline.
The secondary market ecosystem is expanding and diversifying.
Along with discount pricing growth, the broader resale and liquidation ecosystem is also evolving. The emergence of new “treasure hunt” e-commerce platforms alongside respected value stores is expanding the world of buyers seeking name-brand products at discounted prices.
For CPGs, this means more opportunity, but also more challenges in managing these channels. It is no longer a question of “should I sell to a cheap retailer,” but to which retailer, on what terms, and at what price?
As channels increase, so does the pressure to get your products into the hands of interested consumers. Speed to market, buyer segmentation, traceability, and data analytics are critical to leveraging these channels effectively. Channel fragmentation means more governance risk without visibility and control.
Consumer behavior and value-driven mindset continue to drive discount retailing.
Consumers seek value. Not because prices are still high, but because the stigma of buying discounted items has disappeared. Revenues across retail are surpassing forecasts as shoppers love finding great deals and discovering new brands at discounted prices.
“Martie’s customers are looking for products they don’t typically find in their local grocery stores and opportunities to discover new brands,” said the co-founder of discount retailer Martie. This is proven by the fact that 83% of Martie’s customers become repeat customers who report that they purchase the same product at full price later on.
A mix of social change and economic realities means demand for discount and value channels is stronger than many CPGs expect. When excess inventory flows to the right secondary stores, it often performs better and faster than expected.
The risk of discounting is real, but it outweighs the opportunities (including guardrails).
But as the discount channel grows, so do the risks. Price reference erosion, brand dilution and unauthorized buyer flow may increase. Channel leaks can lead to inconsistent presentation and blind spots in CPG data.
However, if managed well, the advantages of increasing the discount rate far outweigh the disadvantages. Strategic and efficient liquidation can help restore margins, increase sell-through rates, reduce waste and improve sustainability performance.
Using the right guardrails can help you manage risk. With the right technology, prediction becomes possible.
Technology and logistics are essential for liquidation success.
Discount retailers and secondary buyers are growing at a rapid pace. This means consumer goods companies must provide excess inventory and quickly refresh product assortments to meet these requirements.
Something as simple as changing the price based on expiration date can be the difference between moving a product or not, but for many teams without enough time or the right tools, even a simple process is out of reach.
Liquidation is no longer as simple as selling excess to a single discount partner, so CPGs looking to make the most of excess inventory must also consider logistics. Platform, buyer, channel, timing and visibility all play a role.
This is where Spoiler Alert comes into play. Digitize workflows, standardize data, manage offers, route products intelligently, and help CPGs move quickly without compromising brand standards. Spoiler Alert helps CPGs protect their brands while succeeding in the growing discount and secondary markets.
Want to learn more about how CPG clearing will evolve in 2025? Read the full report here.
