Black Friday: a snapshot of modern retail?
It’s that time again. Retailers have geared up for this weekend for months – the busiest shopping period of the year. And it starts today with Black Friday. What began as a US post-Thanksgiving tradition has mutated into a global phenomenon where retailers dangle heavily reduced goods in front of baying consumers who will do almost anything to secure the best deals in time for Christmas.
It’s all quite grotesque, isn’t it?
OK, I’m being dramatic. But Black Friday (not to mention the proceeding weekend of shopping and “Cyber Monday”) has become quite the spectacle. This period is circled in red pen on many a merchant's calendar – and it serves as a fascinating snapshot of modern retail. But for all my earlier exaggerations, the picture is becoming increasingly uncomfortable.
It’s not all bad…
Let’s start with the positives: Black Friday generates a lot of sales. In the US, where the day was born, consumers spent $9 billion in stores and a further $1.5 billion online. That’s more than three percent of the $3.19 trillion US consumers spent during the whole of 2014. Not bad for one day. When you factor in the Thanksgiving weekend and Cyber Monday, consumer spend came in at $27.8 billion – nearly seven percent of the annual total.
The other positive? Consumers get great deals. Electronics are typically the most sought-after products, and carry the heaviest reductions. With hundreds of dollars off TVs and laptops for less than $100, it’s no surprise everyone’s champing at the bit to complete their Christmas shopping.
In the early days of Black Friday, retailers would open their doors as early as 4am to let in the horde of deal-hungry shoppers, many of whom had camped out all night. But now we have access to shops 24/7 via our PCs and mobiles. And that doesn’t bode well for the future of the high street.
While in-store sales outnumbered digital by nearly nine to one in the US, it doesn’t tell the whole story. In-store spend was down seven percent year on year, while online spend increased by 26%. It illustrates the shift in our shopping habits – and it’s set to quicken. The introduction of Cyber Monday in 2005 is fuel to the fire. Last year, US consumers spent $2 billion online during the Monday after Thanksgiving – putting Black Friday in the shade.
The Thanksgiving shopping period is becoming an increasingly online affair – the convenience, speed and comparable offers to those available in-store make it a no-brainer for consumers. Mobile commerce will accelerate the shift. Mobile devices accounted for 27% of Black Friday’s online sales. You can expect that to rise as consumers become more comfortable with spending on their smartphones. The long-term impact this has on footfall in stores remains to be seen, but the trend doesn’t look set to stop any time soon.
This bumper retail weekend started in America as a productive way to spend the lull (and time off) after Thanksgiving, when all the pecan pie had been eaten and all the football watched. But after spreading to Canada and Mexico, it’s now a craze in Europe and beyond. It’s a truly global weekend of spending. But while in its homeland, the tradition has endured for nearly two decades (despite a dip in overall spend last year), there are signs that it’s popularity is not quite as everlasting overseas, particularly here in the UK.
After unsavoury scenes of customers fighting in its stores last year flooded social media, Asda announced it wouldn't be participating in Black Friday this year. The supermarket chain, credited as a driving force behind the introduction of the day to UK consumers, cites customer fatigue as the reason behind its decision.
It’s not just shoppers that are becoming weary. John Lewis has also expressed concerns about Black Friday and the impact its heavy reductions will have on the company’s bottom line in the long term. However, the retailer conceded it “has no choice” but to participate now consumers have had a taste of the savings.
If large retail brands like John Lewis and Asda (the latter owned by US giant and Black Friday heavy-hitter Walmart) are expressing weariness about Black Friday after just a couple of years, it doesn't look like the trend will last as long as it has in the US. There are also questions about the potential damage it can do to a brand’s reputation. While Asda prides itself on everyday deals and value, John Lewis is seen as a high-end department store, albeit one known for fair pricing. Participating in a discount free-for-all like Black Friday already appears at odds with its brand identity. Aurelia explored the concept of luxury brands earlier this year – and heavily discounting products for a short-term gain can dent a brand's hard-earned premium status.
Retailer scepticism is compounded by claims from UK e-commerce body IMRG that Black Friday didn't boost overall spend beyond expectations last year, despite contributing £810 million to the £3.7 billion total holiday sales. Instead, the organisation described it as a “tsunami”, with sales dipping significantly both before and after the day.
So, are Black Friday and its merry band of gimmicky shopping days a natural disaster for retailers? Maybe not right now, but they could be in the future. From strained resources and long-term financial risks to camped-out shoppers and in-store brawls, you’ve got to ask: is it worth it? If this is retail, then I’m checking out.
Drew no longer works at The Frameworks