Discount depth measures the average magnitude of price reductions across discounted products. If a brand's sale items average 30% off their original prices, that's their discount depth. This metric, combined with sale rate, paints a complete picture of promotional intensity.
Shallow discounts (10-20% off) suggest cautious promotions that protect margin, while deep discounts (40%+ off) indicate aggressive clearance or promotional pricing strategy. Premium brands typically maintain shallow discount depths even during sales to preserve brand value.
Analyzing discount depth by category within a brand can reveal inventory health and demand patterns. Categories with deeper discounts may be experiencing weak demand or clearing seasonal inventory, while shallow-discount categories are performing well.