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Fast Becoming One Of The Most Profitable Weekends For Retail Brands Every Year; How The American Tradition Is Taking Over In The UK Too.
Black Friday: a term that may fill some of us with excitement for the upcoming bargains or dread for the busy high streets, frantic shoppers and the sharp reminder that Christmas is coming.
Black Friday originated in the US; Police officers in Philadelphia, USA, first used the term “Black Friday” in the 1950s, when large crowds of tourists and shoppers came to the city the day after Thanksgiving, creating chaos, traffic and shoplifting opportunities. Some twenty years later, as the phrase became more popular; Black Friday began to represent the point when retailers begin to turn a profit, from being “in the red” to “in the black”.
The concept of Black Friday was first brought over to the UK in 2010, when retail giant Amazon promoted a range of discounts and deals to consumers. It wasn’t until 2013, when ASDA (owned by Walmart) took part that Black Friday really started taking off in Britain. By 2014, big retailers like John Lewis, Debenhams and Tesco jumped on the bandwagon; fast forward to 2017 and over three quarters of retailers were offering Black Friday promotions of some kind either in store or online.
While opinion is divided between those who will and won’t look for deals, PWC UK (2017) found that more than 50% of those surveyed are interested in Black Friday, and either intend to buy or would consider doing so if the price is right. This rises to 70% of under 25 year olds, and 65% of 25-34 year olds; in fact, almost one in three under 35s definitely intend to buy something. Only one in ten shoppers deliberately plan to avoid Black Friday, and most of these people are over 45.
Last year, it was estimated that consumers spent approximately £10bn over the Black Friday weekend. Argos reported that 2 million people visited its website in the four hours after it launched its Black Friday deals on Thursday night.
“These early record-breaking figures show that savvy shoppers are keen to bag themselves a bargain in the run-up to Christmas,” said John Rogers, the Argos chief executive. “People are clearly buying their big Christmas presents, as we’ve seen a real spike in sales of video games and consoles as well as iPads and TVs.” Meanwhile John Lewis admitted its online store had crashed for a short period as shoppers jammed the web for discounts, and Amazon reported a sale every 62 seconds.
Consumers were asked what retailers they were intending to shop with in 2017; among the consumers surveyed, 65 percent plan to shop at Amazon on Black Friday, making this the most popular retailer in the provided list:
Opinions over black Friday are divided; CEO of Marks and Spencer Steve Rowe stated “I bet most retailers wish it was an American import that never arrived.” CEO of Fat Face, Anthony Thompson asserted “it’s bad for business, it’s bad for UK retail […] What customers are looking for at Christmas is great value for money, not make-believe promotions and fake prices, and that’s often what they get on Black Friday.”
On the other hand, John Rogers, chief executive of Argos which is now owned by Sainsbury’s said: “It’s a year in the planning. It’s our biggest day of the year”. Electrical products are by far the most popular items that consumers purchase during the Black Friday weekend; in a survey conducted by Statista (2018), almost a quarter of those surveyed expected to buy electrical products, such as TVs, tablets and laptops, while 12 percent predicted that they would purchase fashion pieces, and just 2% said they would buy health and beauty products:
Statistics released by the National Office for Statistics showed that there has been a year on year rise in online retail sales in November. Statista (2018) released the following graph detailing the expected offline and online spend over the course of the Black Friday weekend in the United Kingdom (UK) in 2017 (in billion GBP).
The graph below shows the expected offline and online spend over the course of the Black Friday weekend in the UK in 2018. Online spending is expected to reach £1.45 billion on Black Friday, while online spending is predicted to be slightly lower at 1.15 billion, with a smaller gap between online and offline spending on Cyber Monday:
While there are very few consumer forecasts for the upcoming Black Friday this November, we can use last years’ as a baseline.
PCA Predict’s head of marketing Chris Boaz says people have realised they don’t need to brave the High Street to bag a deal; more and more purchases are occurring online rather than offline. It was this way of thinking that resulted in the evolution of Cyber Monday. Unlike Black Friday, which evolved from the US, it’s an online-only sale in the UK. Coined by Ellen Davis and Scott Silverman, and it was a deliberate move to promote online shopping back in 2005.
Traditionally, the first Monday after the final payday before Christmas was the day people headed online and started their Christmas shopping. When shops noticed this trend, they started offering promotions to try and win customers when they were likely to be shopping.
While nothing has been confirmed just yet, the following retailers took part in 2017, meaning it is likely they will offer Black Friday promotions this coming November:
- Currys PC World
- John Lewis
- Carphone Warehouse
Interest in Black Friday/Cyber Monday is varied; the graph below shows the results of a survey in which adults in the UK were asked whether they were interested in Black Friday and Cyber Monday in 2016. The largest proportion of respondents (36%) said they were not interested and a further 14% said they were purposely avoiding the shopping event. In contrast around 27% said they were interested and would be spending money over the weekend:
When UK consumers were asked why they dislike Black Friday, 33% claimed that there was too much hype, 28% cited long queues as being the main reason for dislike, and 12% reported irrelevant promotions as the reason:
Over 1 in 4 (26.8%) of Brits have purchased something on sale that they have later regretted, spending an estimated average of £245.8 each on these items, generating a total of £2.7 billion. The most regretted type of item purchased during the sales was clothing/accessories, with 29.2% of these regretful purchases falling into this category. Technology/electronics came in second at 25.8%, followed by household items at 11.4%:
On average, Brits plan to spend an estimated £304.08 each on Black Friday and Cyber Monday sales this year, coming to a huge £4.5 billion. Interestingly, males intend to spend more than women, at £381.88 compared to £215.86. Gen X plan to spend £351.15 on average, while millennials plan to spend £341.67. Baby Boomers plan to be a bit more careful with their money, spending £184.47 on average this year.
The table below indicates what consumers planned to spend in 2017 according to region. Londoners planned to spend the most (£533.53), followed by the South West (£362.54) and the East Midlands (£263.02). In contrast, those residing in the West Midlands planned to spend the least (£188.11), followed by the North East (£191.11) and Wales (£192.14).
Data compiled by price comparison site GoCompare found that last year, just 21% of respondents said they planned to physically visit the retailers offering Black Friday deals, while 9% said that they expected to shop using only their smartphones.
Last year, several retailers decided to opt out of participating in Black Friday; IKEA for example, insist that their focus is on making affordable furniture available to as many people as possible, they say: “Low price is the cornerstone of the IKEA vision […] Our ambition is to offer everyday low prices all year round, which is why we don’t take part in temporary discounting events”. Primark shares this ethos, with a spokesperson claiming that “Primark offers great value on the high street every day of the year”.
The increasing competition between UK retailers has meant sales are no longer confined to just one day, as many shops began offering deals in the days leading up to Black Friday, which saw it nicknamed ‘Black Fiveday’ in 2017. Some online retailers even start their sales as early as the start of November, continuing across the Black Friday weekend, and concluding on Cyber Monday.
This year, Black Friday falls on the 23rd November and Cyber Monday on the 26th November. If last year is anything to go by, it’s going to be a busy weekend of bargain-buying for Brits.