Back to Black Friday
It’s that time of year again! Black Friday has become an annual frenzy in the UK, as retailers up and down the country compete to offer consumers the best deals on everything from beauty products to wearable tech.
What is Black Friday?
Black Friday began its roots in America, where it is the name used for the day after Thanksgiving and is traditionally regarded as the start of the Christmas shopping season. It is so called ‘Black Friday’ as it is supposedly the day shopkeepers balance sheets turn from red (loss) to black (profit).
The concept was then imported to the UK in 2013 by Asda (a subsidiary of the American shop Walmart) and has since grown year on year as more retailers began to take part in the event.
A big deal?
In 2016, total online retail spend on Black Friday was £1.23bn. But forecasts this year are expecting shoppers to part with double that (£2.5bn) in the next 24 hours with £10.1bn predicted to be spent during the whole ‘Black Week’.
“On balance we think that the power has swung back in favour of shoppers this year and we expect record online purchases over the next few days,” comments Keith Richardson, managing director of the retail sector at Lloyds’ commercial banking.
However, many businesses are finding it more difficult this year to offer as many big price cuts. Strong inflation, caused by the fall in the pound, along with rising business rates are thought to be impacting the reduced prices on offer compared to last year.
“Increased cost prices will mean retailers are unable to offer the level of discounts advertised in 2016, meaning demand may waver as consumers feel less inclined to make bargain purchases on impulse,” said Eleanor Parr at GlobalData. Electricals are thought to be the most impacted by inflation, along with fashion and homeware items.
Will it spread Christmas cheer?
High street shops in particular have seen sales slowdown in recent months, caused by a squeeze on consumers’ disposable income. But with sales recovering in November, retailers are hopeful that Black Friday will provide an increase in consumer spending in time for the crucial festive period. Meanwhile, online retailers have also invested in their IT infrastructure in order to cope with expected demand after as many as one in five websites crashed in 2015.
With consumers becoming savvier about Black Friday, those retailers who join the fray should seize the opportunity to boost customer engagement in the run up to Christmas.
If you need advice for your retail business, please get in touch with our team on 01903 234094.