27/12/2015

Black Friday – is its future in online sales?

Black Friday is an American import to the UK

Black Friday is an American import to the UK

As we move into 2016 after the hectic Christmas and Boxing Day sales period, we look back at the biggest online shopping campaign of the year – Black Friday on  November 27 – and examine its origins and its future.

On Black Friday, consumers in the UK spent over £1.1 billion shopping online. Companies including Amazon, John Lewis and Dixons Carphone all saw their biggest ever-single days trade – according to Experian IMRG.

But where does the madness that is Black Friday originate? And who benefited the most?

Black Friday is an American import, whereby retailers offer large discounts the day after Thanksgiving and to mark the start of the Christmas shopping season. Even with such impressive sales figures, there seems to be a growing divide in the retail trend.

However, according to The Drum, 2015 could see the beginning of the end of in-store shopping on Black Friday as retailers switch to concentrating on their online sales and promotions.

A major change observed during 2015’s event was the increase in online sales which rose 36% on last year – according to Experian-IMRG. It was also been reported that the footfall to the high street dropped 10% during these sales claims data from the retail intelligence company Springboard.

Overcrowded stores, low stock and even scuffles breaking out amongst shoppers dominated 2014’s coverage of the event, casting many retailers in an unseemly light and it left many retailers questioning whether Black Friday is worth the hassle and decided that turning people feral for the opportunity to save a few pounds on products isn’t good for business.

Some large retailers like Asda, who originally helped to make Black Friday a mainstream event in the UK, backed out all together last year. Other stores such as furniture store Vitsoe remained closed, and Oasis reduced its involvement after as much as 50% of orders were returned last year.

Andy Clarke, Asda CEO, said: “It was one of the best decisions we’ve made based on our long term strategy to focus on boosting profits even if overall sales are lower.”

Nevertheless, this is in contrast to other stores that were happy to report record high sales over Black Friday.

The winners included:

  • Amazon UK revealed that Black Friday had “surpassed all expectations” with sales of more than 5.5 million goods (approx 64 items sold every second) compared with the four million record from 2014.
  • Shop Direct stated its clothing sales were up 73.8% year-on-year
  • John Lewis saw its biggest single day’s trade an increase of 11.9%
  • Barbour recorded growth of 61%

There’s a lucrative opportunity for those companies that successfully tailor online shopping experiences to customer preferences, according to Aimia. Nearly half (45 per cent) of the 2,011 respondents surveyed by the analytics firm say they actively share their personal details with brands to receive relevant offers and discounts.

“Black Friday is not just about the sales on the day,” said Alex Baldock, chief executive of Shop Direct. “It’s a terrific opportunity for us to profitably gain market share and loyal customers. We strongly believe that that we would be mad not to throw everything we can at it.”

It’s a confidence born from 2014’s Cyber Week when Shop Direct gained nearly 50,000 new customers, of whom almost half shopped again in the next season. “For a business that is now a 100 per cent digital, clearly for us it’s online,” added Baldock. “As a consequence we are not distracted by the issues other ‘bricks and click’s retailers face on Black Friday and as such we can concentrate our efforts and focus totally on this one channel.”

It points to how the once simple concept of Black Friday has changed with retailers offering deals in the run up to day itself. The groundswell of online activity from Shop Direct et al  will cause many to question whether this is the beginning of the end for Black Friday sales in-stores. In this age where digitally empowered consumers want more choice, why should they only get a deal on a specific day?

Black Friday may be losing its appeal as more and more retailers launch sales well before Christmas and New Year but it’s created a window for marketers to revitalise the prodigal promise of e-commerce.

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