Now that Hallowe’en has passed for another year, and we are in the penultimate month of 2015, UK retailers are ramping up their Christmas activity – a vital time of year for this sector.
Unsurprisingly, consumer spending rises as we approach the Christmas period although there has been a change in the spending pattern in recent years. This disruption has been caused by an American tradition that has taken the UK by storm – Black Friday, the day after Thanksgiving.
WHEN DID BLACK FRIDAY COME TO THE UK?
Five years ago, Amazon trialled the American tradition in the UK, at a time when most consumers weren’t aware of its existence. I’m sure even they did not expect how well such an event would go down with UK consumers! Since the first Black Friday in the UK, the scale of reductions/events put on by retailers on this day continues to grow. Last year, many larger retailers offered limited in-store and online deals, offering a range of goods at drastically cut prices.
BLACK FRIDAY CAN BE A PROVEN CHALLENGE FOR RETAILERS
Last year, the growth in scale and popularity of Black Friday meant that many retailers encountered crashed websites, stock availability issues and home delivery delays; all of which had a knock on effect for the crucial weeks that followed. This experience may have tainted the opinion of Black Friday for some consumers, however I am sure most will be back this year to get a bargain! Black Friday also proved to be a PR nightmare for some retailers, namely the supermarkets, with pictures of shoppers fighting and biting for their discount products.
A DIFFERENT APPROACH FROM RETAILERS
Despite many retailers planning to take part in Black Friday this year, after the success of the event in recent years, they are taking several different approaches this year.
Some retailers are extending Black Friday into a discount period, aiming to spread the demand across several weeks in November/December rather than the one day. I think this is certainly a wise idea as it helps retailers deal with capacity, rather than heavily investing in operations and security for the one day. For example, Argos has been offering more deals in the weeks leading up to Black Friday.
There is an assumption that offering such attention grabbing discounts will mean that consumers spend more on their Christmas shopping. However, it is argued that consumers just choose to spend their money earlier, reducing profit margins in December (which should be the time to sell at RRP!). Therefore some retailers are deciding, having tested the waters, that there is little value to participating in this year’s Black Friday event. For others they will take part, but plan to scale down their offering. Asda, one of the retailers who first attempted to bring Black Friday to the UK, has decided to withdraw from it this year.
I think that after the reporting of limited benefits to retailers last year, Black Friday may have already reached its peak engagement with UK retailers. Now that retailers have a better understanding of what to expect and how to prepare for the Black Friday madness, it will be interesting to see whether it proves to be a wise decision to participate in 2015.
We are going to be watching Black Friday this year using Reflected Life, our passive metering insight tool. Come back after Black Friday to see the results!
Becca Allen is a Senior Research Executive in the Retail team at Marketing Sciences UnlimitedSubscribe