Black Friday 2015 is predicted to be the UK’s biggest shopping day on record, with an estimated consumer spend in excess of £1billion. We believe consumers are always-on and so are we, so this week here at Connect we are discussing the event that is set to take the UK by storm on Friday 27th of November and how Black and White Black Friday really is for retailers.
What is black Friday?
Having been around in the U.S for a number of years, so called ‘Black Friday’ traditionally occurs on the Friday following the U.S celebration of Thanksgiving and sees many retailers try and lure in customers by offering cut prices and sales on a wide range of goods, often high-value items such as electronics.
Why the name Black Friday?
There are varying reports as to where the term ‘Black Friday’ originated from, reports by publications such as The Business Insider and The Telegraph have suggested that originally the phrase was coined by U.S police officers in Philadelphia who deemed the day as bleak and miserable due to the chaos caused by bargain hunters in their area. However more recently, the phrase has had links to accounting and finance, as many businesses have traditionally relied heavily on the boost in spending throughout the festive period to keep them ‘in the black’ and making profits, hence the name Black Friday!
Facts and Figures from previous years
Compared with the same day the previous year consumers spent 18% more on Black Friday in 2014.
Online spending in particular on Black Friday in 2014 was 37.5% higher than the previous year and this increased further on the following Monday known as ‘Cyber Monday’, traditionally the most popular online shopping day of the year.
Household appliances and electronics proved popular with purchases of these goods 4 times greater than on an average day.
Black Friday discounts last year led to the peak in sales moving from mid-December to late November which experts say retailers must consider when planning for the 2015 festive season.
Black Friday Winners and Losers
One of the companies who played a role in bringing the Black Friday phenomenon to the U.K in the past few years are ASDA, part of American retail chain Walmart who historically have pulled out all the stops with major discounts on a wide range of items. In a dramatic turn of events this year ASDA, who are currently the UK’s second largest supermarket, have announced that they will not be taking part in any Black Friday promotions.
With many reports suggesting that this move is a result of last years ‘ugly scenes’ in which the police were called to stores due to the behavior of shoppers in the Black Friday sales, the retail giant has claimed that there is ‘shopper fatigue’ surrounding the event and that their consumers have told them loud and clear that they do not wish to be ‘held hostage’ to a day or two of sales.
In light of this, ASDA are planning to invest around £26 million over the full Christmas period and spread the discounts across more items in stores.
One retailer who appeared to have a successful Black Friday was Argos who saw sales jump 45% as more than 13.5 million logged on to the Argos website. However, it was reported in early 2015 that like-for-like sales from the retailer fell flat over the 18 weeks to 3rd January. It could be argued that Argos did not approach the event with the correct strategy, meaning the Black Friday hype was short-lived. This year Argos have announced that they intend to not only partake in Black Friday sales but also to slash prices on the Fridays leading up to Christmas as part of their Red, White and Blue Friday campaigns, in a bid to extend their consumers spending over the whole month.
One brand who claim to have indirectly benefitted from the Black Friday sales were discount retailer Primark. Having not made any discounts themselves they enjoyed growth in underlying sales and and market share thanks to the additional footfall Black Friday sales brought to the high street. With total sales up 15% in the 16 weeks to 3rd January, it would seem that their avoidance of Black Friday discounts paid off.
Should brands consider implementing Black Friday?
It’s clear to see that for many retailers Black Friday is an opportunity not to be missed. As the Christmas season creeps closer and with many still feeling the pinch of the recent recession British consumers are desperate for a bargain, but brands must not underestimate the importance of strategy when it comes to the discounts and promotions they are offering consumers.
As seen with Argos last year, retailers are at risk of cannibalising their overall December sales peaks that they would normally expect from the festive season by taking part in the one-day push that is Black Friday. Brands should take time to consider what it is they are hoping to achieve over the whole of the Christmas period and plan their campaigns accordingly in order to maximise the impact to consumers.
Another element to consider would be who exactly retailers are trying to attract during Black Friday sales. Is it seen as an opportunity to gain new customers or are you targeting existing customers? If it is the latter, then retailers should contemplate whether they are at risk of simply discounting items at a time where they are significantly more likely to be bought, regardless of price. This may link to the idea of personalising messaging, and how retailers should be using data and insight about their existing customers to create targeted and tailored offers, ensuring that the right discounts resonate with the customer.
This leads us on to our final point, brands should reflect as to whether hopping on the Black Friday bandwagon is appropriate for their brand. For brands who consider themselves to be quintessentially British, such as Marks and Spencer’s, Barbour and Waitrose, would it be suitable or even beneficial to take part in what is fundamentally an American tradition brought over to the UK by American brands. Would your loyal consumers be put off visiting stores or even the high street as a whole at risk of facing over crowded and unrecognisable stores?
In order to avoid facing any of the problems we have discussed it is vital that retailers take the time to consider IF and HOW they are going to tackle the Black Friday discount period in order to ensure they benefit the most and continue to maintain their customer experiences.