As the dust settles on Black Friday and the Christmas shopping period gets into full swing, I ask whether the relatively new UK ‘tradition’ of Black Friday is a blessing or a curse for consumers and retailers alike.
This Black Friday saw record numbers of online sales, with retail group IMRG estimating that transactions online passed £1bn for the first time, with a further £1bn spent in-store. Fortunately, many chose to stay at home this year for the sales, turning to retailers’ websites, meaning that fights over discounted items were, for the most part, avoided. Footfall for high-street stores was down almost 10% on last year, and many will be hoping this will be made up by today’s ‘Cyber Monday’ sales.
Since its introduction by Walmart-owned ASDA in 2013, Black Friday has become the busiest shopping day of the year, with the marketing scheme being adopted by supermarkets, online retailers and department stores alike.
On the part of the consumer, the Black Friday and Cyber Monday sales can be a very good thing, with popular goods, such as electronics, being heavily discounted in time for Christmas. As well as this, sales often continue well into December, meaning customers continue to benefit from a lot of the sales on offer by various retailers.
However, it is not uncommon for stores to use Black Friday as an opportunity to get rid of old stock, meaning some may be tricked into thinking they are getting a good deal. As well as this, in Amazon’s case in particular, some have been disappointed in the past by the lack of discounts on high-end products, such as popular electronic goods. Also, the worrying images on television of shoppers fighting over products on sale almost certainly has put off some from taking to the high street on Black Friday.
For companies, Black Friday is not as beneficial as it is for their customers. Although takings for retailers participating in the sales can increase dramatically, profit can in fact drop at the most important part of the year, due to reduced margins. This is worsened by the decision by many to spread sales out over the weekend and into Cyber Monday.
Moreover, some, including ASDA themselves, have chosen to shun the shopping spree after ‘flash sales’ caused crowds to rush into stores, with police being called in last year to deal with scuffles between shoppers vying to get the best deal.
Shoppers have a relatively easy choice when it comes to Black Friday; those that choose to spend can find good bargains on offer, whilst those that don’t know that retailers will continue to discount products throughout the Christmas shopping period. However, for retailers, it is far from an easy decision to make, as it eats into profits in a vital quarter, with concerns over the safety of shoppers and diminished profit margins having to be balanced with the significant boost to sales.
Time will tell whether Black Friday will have a positive boost to profits for retailers this year, but regardless, it is evident that this new ‘tradition’ is the biggest shake-up to British shopping habits since the introduction of Sunday shopping hours over two decades ago.
thoughtsfromdan.com 