Black Friday UK – One American holiday too far?

Enjoy Digital
By Enjoy Digital
5 minutes to read

We all know that Black Friday is a fairly new phenomenon in the UK, an import from our colonial cousins across the pond. But where does it come from?

Many will recount that the term ‘Black Friday’ links to retailers and how after an entire year of operating at a loss they finally turn a profit and go from being ‘in the red’ to being ‘in the black’.

The true story behind Black Friday however, refers to chaotic scenes in Philadelphia in the 1950s after Thanksgiving, when thousands of people would descend on the city for the annual army-navy football match. Due to the sheer number of people in the city all police had to work to manage traffic and additional crowds; scenes of bedlam ensued which shoplifters took full advantage of. Savvy marketers seized the day in the mid-80s to cash in on the crowds and reinvent Black Friday as a ‘positive holiday, which offers great savings, boosts retailers and in turn the economy’.

The American craze was widely introduced to the UK by Asda, owned by US Walmart, in 2013 with other retailers following suit in 2014. Interesting then that Asda have since pulled out of Black Friday 2015. The reason…they don’t want to hold their customers “hostage” to a single day of sales. This could also be due to the sheer amount of bad press they received for scenes of madness and violence and in their stores last year.

Regardless, the UK has been exposed to this event now and so almost every other major retailer is taking part in order to ensure that they get their piece of the spending action. But will they really gain anything from the frenzy?

According to Experian, the UK spent £810m on Black Friday last year; this year’s predicted spend is upwards of £1bn online – a rise of 32% from last year and almost £2bn in total sales across digital and physical sales. That’s £21,990 every second. (Source: BBC)

The question is…are shoppers delaying their spending in the hopes of getting a bargain on Black Friday?

The Confederation of British Industry announced on Tuesday that retailers’ sales volume has fallen in November 2015 to just 7%, substantially below the 24% expectation.(Source: FT)

Understandably, retailers are hoping as a result that there will be some big spending instore and online on Black Friday but how much more do they need to sell, at a discount, to make up for the loss of sales for the start of the month and the period directly after Black Friday?

Significantly, some retailers are shunning the ‘holiday’. Annabel Kilner, Head of UK at Made.com has said:

Black Friday discounts highlight the huge mark-ups consumers pay on products at other times of the year.

Surely, if your prices are low/competitive all year round then Black Friday is a crippling day in the run up to Christmas, traditionally retailers busiest period, where losses are made on products that are still worthy of their RRP.

Aaron Shields, EMEA strategy director at Fitch, global retail and brand consultancy, explained:

One by one, big British retailers are driving nails into the Black Friday coffin.

Retailers such as Argos, Primark, John Lewis and Mothercare are joining Asda in either cancelling or dramatically scaling back their Black Friday offering.

To avoid the heavily reported chaos in stores, many shoppers will buy online and so pressure will transfer to technical and logistical aspects of the business. Arranging and fulfilling delivery and returns will be more difficult with the increase in online traffic. But before shoppers even get to requesting delivery, retailer websites need to be able to handle the increase in traffic so that they don’t crash and lose out on mass sales. John Lewis reported +307% in online traffic in 2014, as a result around 7% of their customers were unable to access the site first time due to the level of demand (Source:BBC). Tesco, PC World, Argos, Boots and GAME’s sites all crashed last year so if these retail giants can’t cope online how can SMEs? Due to such technical issues it means only Amazon-like retailers will gain any real success.

History shows that Black Friday doesn’t increase the amount shoppers spend leading up to Christmas, it just concentrates the spending into one day. It is well known that big retailers start planning for Christmas as early as July, if not sooner, so why are these businesses adding further stress and discounts in their busiest period?

Many retailers have taken advantage of the frenzy of last year.

Missguided, one of the UK’s biggest online fashion retailers, with £51m worth of sales in 2014, have created a campaign around the luxury of shopping with them online and avoiding the bedlam and queues.

On the other side of the coin Made.com have created a fun and fresh campaign to boycott Black Friday this year, focusing not just on all the good and bad trends from America but how they are “passing savings onto you, all year round”.

 

Whether you believe Black Friday is positive or negative addition to the UK market there is certainly the opportunity to cash in on the ‘holiday’ through clever marketing and PR – what will your strategy be for next year?

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