Digital Marketing Redux   //   December 22, 2023

The rise of Q5: The latest buzzword brands are using to eke out last-minute end-of-year sales

It’s not time to “wrap up” just yet. Some brands are looking to wring out as many sales as possible with last-minute promotions in the week between Christmas and New Year’s — and they’ve given this period a marketing-friendly name: Q5.

More companies are beginning to use that week-long period of time to clear out inventory, make sales and appeal to those who still want to shop. According to a 2020 survey by ware2go, some 92% of consumers still plan to purchase items after the holidays are over. Businesses are jumping at the chance to be there when they do.

Ink + Alloy, a fashion accessories brand that sells beaded jewelry, is starting a “sale on sale” from Dec. 26 to Jan. 17. “In January, we start introducing a lot of new product, so it’s kind of a ‘clean the closets out’ for the end of the year,” CEO and founder Gretchen Hollingsworth told Modern Retail. Ink + Alloy will offer an additional 30% off its sale section, she said.

Likewise, Fulton, an insoles company that also sells standing mats and tote bags, is conducting a 20% off sale after Christmas through Dec. 31. This year is Fulton’s first time doing such a sale, co-founder Libie Motchan told Modern Retail. “Last year, we saw high conversion in this time,” she said. “So this year, we decided to offer a sale to really lean into it.”

Thanks to the holidays, the fourth quarter is typically the busiest time of the year for brands. However, the fourth-quarter sales usually end abruptly as soon as Christmas arrives. By squeezing in extra sales during that last week before January, brands can boost their overall performance. And, these types of deals can help brands get rid of products that didn’t sell well during the holidays and clear space for future items.

What’s more, the so-called Q5 period is a time that many consumers will have off from work, thereby giving them more time to shop. It’s also a period in which people might start to buy products related to New Year’s resolutions. Fulton, which emphasizes foot health, fits into this, Motchan said.

“I anticipate that January will be strong for us because our product, it’s honestly less of a giftable product and more of a ‘buying this for my wellness, buying this for myself [product],'” Motchan said.

Many brands — especially wellness ones — have started sending out emails timed around New Year’s goals such as focusing on physical and mental health, fitness or nutrition. Last year, toothbrush and floss brand Quip ran a “20% off almost everything” sale from Dec. 26, 2022 to Jan. 9, 2023 calling on consumers to “ring in the new year with fresh habits!” Gap ran a special activewear sale on Jan. 5, 2023.

The Container Store, seizing on people’s interest in organizing their spaces and closets in the year to come, ran a 30% off sale for its line of Elfa products, which included a walk-in pantry and a garage workstation, on Dec. 30, 2022. “Make more space for 2023,” it said in a marketing email.

But, retailers of all types — not just ones tied to habits or mindfulness — have offered post-Christmas deals. Last year, J. Crew, Madewell, Ikea, Sephora and Kiehl’s ran “sales on sales” or bonus New Year’s-timed promotions. Target offered 50% off a yearly subscription of its same-day delivery service Shipt and Target ran a “clearance run” with extra savings on shoes, toys, clothing and beauty.

Brad Jashinsky, director analyst at Gartner, told Modern Retail that it makes sense for brands to think about sales in the period right after Christmas. That time has historically been “incredibly important” for retail, he said, and not just because people may use the occasion to go to the mall with their families.

Many consumers will choose the period between Christmas and New Year’s to do their returns, Jashinsky said. While some may do their returns by mail, others may go to a physical store to exchange items or get refunds. Brands that hold “Q5” sales at stores can take advantage of that extra foot traffic, Jashinsky said.

“[Returns are] something that you have to think about from a customer service standpoint,” he explained. “But also, as you have those customers in stores, what type of promotions can you have to ensure that maybe they purchase something else?”

In addition, many shoppers may choose the week after Christmas to redeem gift cards and might want additional sales to help them stretch those dollars, Jashinsky said.

A recent Gartner survey found that 55% of shoppers planned to purchase gift cards this holiday season. Many of these will be distributed in December, and the week after Christmas “is a huge time as consumers are hopefully utilizing those gift cards and looking for those post-Christmas sales,” Jashinsky said.

As for the insole brand Fulton’s “Q5” performance, Motchan said she is eager to see what interest is like. “It feels like a good opportunity to tap into,” she explained. “And I feel like there’ll be some demand. Just start the year strong.”