Taking back control of Black Friday?

This Retail Consigliere writer has a well-deserved day off tomorrow to exploit the Black Friday bargains (from a laptop – no grappling over TVs in shops will be involved!).

I am part of a growing league of consumers who simply stop purchasing items (but stealthily plan) for at least a month in advance of Black Friday, in anticipation of the bargains to be had at the end of November. Retailers must hate us – with discounting and voucher codes being offered so frequently (and not just on Black Friday and traditional sale periods), we only buy when products are on sale. A price struck out in red, or the word “sale” or “discount”, makes our eyes light up and our wallets come out.

Retail is a tough industry, with increasingly narrow margins, and the lower value of the pound is making things all the more challenging. Operationally, Black Friday also creates an incredible pressure on retailers to keep the ball rolling. Without the right IT systems, logistics operations and sufficient personnel, a retailer will not do well out of Black Friday: if I have waited a month to make my purchase, I expect it to be in stock and want it to get delivered quickly! The public and press are quick to criticise retailers for any issues which do occur, whether it’s a website going down due to high demand or delivery delays. Delivery delays are likely to be an issue this year, especially given the reported shortage of lorry drivers.

Unsurprisingly some UK retailers do not welcome Black Friday, although they face little choice but to go along with it. In January 2015, the then managing director of John Lewis, Andy Street, bemoaned that Black Friday was “more challenging profitability-wise” and questioned whether it is right to concentrate trade in such a short period of time. He accepted nevertheless that it is too late to put the Black Friday “genie back in the bottle”. Andy is not alone – Retail Week reported this week that two thirds of retailers see Black Friday as “unprofitable and unsustainable”.

Over time I think retailers will wrestle back control – surreptitiously – and make Black Friday work for them. Deals are now being spread over a longer period of time – in recent years, Black Friday has been accompanied by Cyber Monday and the weekend days in between, and this year many retailers are offering deals over even longer periods. Amazon, for example, has a two week “Black Friday” period. This approach could be win-win, as it helps to ease the impact on a retailer’s supply chain, and gives customers like me longer to take advantage of offers.

The “regular” price of many goods must also take into account the existence of consumers like me, with retailers knowing that a significant percentage of people will not pay the regular price. So perhaps the “sale” price is the same as the price we would pay if this regular discounting trend did not exist, and means that retailers have the potential to make a greater win when someone does pay the regular price. Equally, successful retailers will be the ones who work hard at encouraging the likes of me to purchase regular priced items at the same time as the sale items.

I also suspect that encouraging consumers to buy their Christmas presents in November works well for many retailers. If I buy most of my Christmas presents on 25 November, the retailers I buy from still have a month to convince me to buy more things. This opportunity does not arise if (with no Black Friday encouragement) I leave my shopping to the week before Christmas. Indeed, statistics from last year’s sales indicate a positive year-on-year increase in November retail sales. It will be interesting to see this year’s results now that we are in a different economic climate, and whether this year’s sales will translate into a healthy profit for the retail industry.

Finally, some recent findings from Which? indicated that some of last year’s Black Friday deals were misleading. These findings were relatively well publicised (for example, on BBC News) so could serve to undermine consumer confidence in the deals on offer. It is certainly making me think that I need to evaluate tomorrow’s “bargains” carefully before proceeding. I can’t help feeling that this may all be part of the retail industry’s plan…

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