Friday 10th October | #48 | Join Free
Hello. Black Friday's coming, and everyone's racing to slash prices first. But here's the thing: bigger discounts don't always mean bigger profits. Today, we're breaking down the maths that separates revenue growth from actual money, plus Gen Z's spending like adults, Gymshark's going physical, and Perplexity just hit the brakes on AI ads.
Let's go. - Mike Callachan (Founder Beyond the Basket)
In today’s beyond the basket:
🤑 Before You Hit “30% Off Everything,” Do the Maths
🧢 Gen Z spending to hit £26bn next year
🏋️ Gymshark doubles down on U.S. retail
🛍️ Amazon October Prime Day Underwhelms
🧠 Perplexity Pauses New Ad Deals
+plus three longer reads covering everything from how to spot dead email lists to what Sora app could mean for marketers.
FEATURE
🤑 Before You Hit “30% Off Everything,” Do the Maths
Sales are up. Profits? Not so much.
Adobe's forecasting 5.3% growth in online sales this season, down from 8.7% last year. Sounds fine until you realise everything costs more now. Ads, shipping, returns, tariffs. You can hit your revenue target and still bleed money.
This Q4 isn't about who sells the most. It's about who keeps their head.
Discounts are already pushing 30%, and customer acquisition keeps getting pricier. The brands that'll actually win aren't shouting loudest, they're watching their margins like their life depends on it.
The smart brands have already shifted gears. Think about creating holiday-specific bundles and exclusive offers that preserve value perception without straight discounts, think curated gift sets or "buy more, save more" tiers instead of blanket "30% OFF EVERYTHING." Consider talking about quality, convenience, and why your product matters. Also be ruthless, cut under-performers now, not in January. Reassess your marketing channels, pulling budget from channels that don't convert and double down on your email list.
Here's the scary maths: With a 60% gross margin, a 25% discount means you need to sell about 70% more units just to make the same gross profit, before factoring in ads or returns.
What to Do Right Now:
Run the numbers before you run the sale.
A 25% discount on a 60% margin means you need to sell 70% more just to break even. Most brands don’t. Before hitting “publish,” model your offer in a simple spreadsheet, price, margin, expected conversion lift, ad cost per sale. If it doesn’t increase net profit per day, it’s not a promotion; it’s a vanity exercise.
Bundle value, don’t burn it.
Instead of blanket markdowns, package complementary products, a mug + coaster, or candle + refill, at a slightly reduced combined price. You protect margin, raise AOV, and simplify the customer’s decision. People don’t think in percentages; they think in “that’s a good deal.”
Re-market what already converts.
Email, SMS, and loyalty audiences already trust you. Re-target them with time-sensitive, relevance-based offers: “you bought X last Christmas,” “restock reminder,” or “VIP early access.” These channels consistently outperform ads on ROI and conversion rate, often by 3–5×.
Growing revenue is easy. Making money takes planning, but there's still time.
QUICK TIP
🛒 Check your checkout before the rush.
Test your payment flows and delivery cut-offs this week. The worst time to find a broken PayPal or Apple Pay button is mid-BFCM weekend. Smooth UX beats flash discounts when everyone’s competing for the same clicks.
ECOMMERCE
🧢 Gen Z spending to hit £26bn next year LINK
TL;DR: Gen Z is expected to drive over £26bn in UK retail spending in 2025, rising to nearly £40bn within a decade, according to RSM UK and Retail Economics. Despite growing spending power, Gen Z remains financially cautious, 34% would save or invest an unexpected £1k rather than spend it.
Why it Matters: Gen Z isn’t the reckless, YOLO generation they’re often painted as. They’re pragmatic, value-conscious, and experience-led. The biggest group, “future flexers” (43%), prioritise security and long-term value, not impulse buys. Brands chasing short-term hype risk missing the real behaviour shift: cautious optimism mixed with selective indulgence.
Your Move: Build offers that feel responsible as much as exciting, savings-linked perks, trade-in incentives, or premium products framed as long-term value. Gen Z will spend, but only when it aligns with their sense of purpose and practicality.
ECOMMERCE
🏋️ Gymshark doubles down on U.S. retail LINK
TL;DR: Gymshark will open its first two permanent U.S. stores this autumn, in Long Island and Manhattan, marking a major step from digital-only to physical retail.
Why it Matters: The move signals how mature DTC brands are rebalancing toward physical retail. Gymshark built a £600m business online, but sustained growth now depends on real-world presence, not just for sales, but for community. Its stores blend retail with experiences (events, workouts, local product drops), blurring the line between store and studio. That hybrid model drives both engagement and ecommerce: store openings typically boost online sales by 10–14% in nearby trade areas.
Your Move: If you’re a digital-native brand, start thinking beyond “showrooms.” Physical spaces aren’t just for transactions, they’re touchpoints for loyalty, discovery, and storytelling. Treat retail as an extension of your brand ecosystem, not an add-on to it.
ECOMMERCE
🛍️ Amazon October Prime Day Underwhelms LINK
TL;DR: Amazon’s October Prime event saw softer sales and smaller baskets as shoppers focused on essentials and held back on holiday spending.
Why it Matters: After a record-breaking July event, October’s slowdown shows consumers are hesitant and value-driven heading into the holidays. Only 23% used the sale for early gift shopping, half last year’s rate, suggesting holiday demand may arrive later and more fragmented, with shoppers waiting for steeper discounts or spreading spend across multiple smaller events rather than committing early.
Your Move: Don’t bank on early-season promos to do the heavy lifting. Keep Q4 plans flexible, focus messaging on value and usefulness, and be ready for a last-minute spending surge once confidence rebounds closer to Christmas.
MARKETING
🧠 Perplexity Pauses New Ad Deals LINK
Image Credit: Perplexity AI
TL;DR: AI search startup Perplexity has stopped accepting new advertisers as it reassesses how (or if) ads fit into its platform. Its ad head left in August, and ads aren’t currently part of its roadmap for its AI browser, Comet.
Why it Matters: For ecommerce brands betting on AI-driven discovery, this is a reminder that the ad infrastructure around AI search is still immature. Perplexity’s pause shows how early we are, there’s no clear playbook yet for performance or attribution in AI search results.
Your Move: AI ad networks will mature fast once one platform cracks discovery and measurement, and the brands that already understand the ecosystem will move first. Track how OpenAI, Google, and Perplexity evolve their ad models so you’re not late when adoption flips from “experimental” to “expected.”
PLAN AHEAD
🎉 Dates to Plan For
October 14th - National Dessert Day 🎂 #DessertDay
October 15th - Global Handwashing Day 🧴 #GlobalHandwashingDay
October 16th - Bosses Day 👩💼 #BossesDay
October 16th - World Food Day 🥘 #FoodDay
October 17th - AMAFest UK Location: Brighton, UK - Focused on Amazon ecosystem, sellers, strategy, growth.
📚 The Reading List
Curated deep dives, longer reads and analysis shaping the future of ecommerce and digital marketing.
How to Spot a Dead Email List Before It Tanks Your Results
Inc. (6 min read) Read here ›
How to recognise when your email list is quietly hurting deliverability, and practical ways to re-engage or prune before Q4.
AI Forces Businesses to Redesign Risk Management
PYMNTS (7 min read) Read here ›
As AI becomes embedded across finance and ecommerce, traditional risk frameworks are breaking, here’s how leading firms are rebuilding them around automation and data.
Sora’s Promise and Peril for the Creator Economy
Digiday (8 min read) Read here ›
Digiday explores how OpenAI’s video model, Sora, could reshape creative production, and what that means for brands and creators who rely on fast-turn, low-cost content.
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