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What did we learn from Black Friday 2017 (so far)?

By: Andy Mulcahy

The Black Friday period has come and not quite gone yet, but what have we learnt so far from the busiest period in the run-up to Christmas? How has it evolved this year and what does it mean for online retail moving into 2018?

Black Friday is five times bigger than an average day, but that’s only half the story

Our forecast for online retail sales growth for Black Friday (as in the day itself, as opposed to the extended period it covers) was £1.35bn, which would represent a year-on-year uplift of +9% for the day.

Should that prove to be an accurate result, it would mean that sales volumes are roughly five-times higher on Black Friday compared with an average online retail day. However, Fridays are typically not the busiest days of the week for online retail sales, so compared to the average Friday, the percentage difference is even higher.  

But – that’s only part of the story. Our forecast relates specifically to sales revenue – and Black Friday is, by definition, a day when shoppers are geared up for making purchases that are carrying discounts, in some instances very heavy ones. So, the actual activity that goes on during Black Friday is far greater than the sales revenue uplift suggests.

It’s different from other discounting / clearance events

Black Friday has no cultural significance in the UK; in the US it is anchored to Thanksgiving, but in the UK we have found ourselves with a post-celebration clearance-type event without actually having had the celebration.

If we compare it to something like the Boxing Day sales, that is a more traditional model of clearance where the items on offer are largely the ones that didn’t sell in the lead-up to Christmas, hence are marked down to make room for new stock in warehouses.

The items that didn’t sell are, for the most part, likely to have not shifted because they weren’t among the most desirable ranges available (or they were perhaps perceived to be too expensive etc).

Black Friday is an enforced retail event, where shoppers are primed to expect huge discounts and great deals. Retailers are pressured to respond, as they don’t want to risk competitors mopping up their share of potential sales. Consequently, there is a burning need to stand out and not just use it as an opportunity to shift old stock, so desirable products – sometimes including the latest technologies – are marketed front and centre at discounted prices to grab shopper attention.

Of particular note this year were voice assistants, such as Google Home and Amazon’s Echo and Fire TV Stick. These are likely to have shifted in considerable volumes, which suggests that 2018 could well be the year that voice becomes a major factor in our use of the web.

Blacktober / Blackvember?

Black Friday (the day, not the extended period) is when people shop in their largest numbers, but actually there are plenty of deals and discounts to be had before that, many of which compare favourably with those available on Black Friday.

Those who are keen / regular shoppers will be well aware of that, but there are plenty who aren’t particularly interested in shopping and just dip in on Black Friday because they are familiar with the term and expect to get access to big discounts.

Data from Love the Sales (see graph below) showed that the number of products on sale in October was up substantially on previous years, up 50% toward the end of the month even.

Retailers may not always explicitly label these discounting campaigns ‘Black Friday’, but heavy deals were available throughout October and November – raising an interesting question around where the ‘Black Friday period’ can actually be said to begin.

Threat to retail spend from other sectors

Since Black Friday 2014, when it reached a high level of critical mass in terms of shopper awareness, businesses in other sectors have launched their own Black Friday campaigns to try to capture shopper attention and secure some of the spend for themselves.

This includes magazine subscriptions, mobile phone contracts, car rental, gym memberships – even letting agencies. For something that is characterised as being primarily about retail, this poses a threat as it could divert spend away from retailers at their busiest time of the year. Realistically though, this doesn’t appear to have been a significant enough diversion to impact retail too deeply –yet.

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Travel companies, for example, have put heavy discounts on holiday packages under the Black Friday moniker – and holidays are amongst the biggest expenditures that the average UK citizen will make annually. Looking at growth trends for the travel sector in the IMRG Capgemini e-Retail Sales Index however, there was little change in 2015 but there was a more notable shift in the typical month-on-month growth rates between October and November in 2016; not strong enough to suggest a wholesale migration of spend over to travel away from retail, but certainly one for retailers to monitor.

What are others seeing?

There are lots of sources of data on Black Friday, below are four trends that some of our members have picked up so far this year:

  • Smartphones were the primary source of new visitors, with 51% coming through those devices, 40% through desktop and 10% through tablet (Qubit)
  • Selling high volumes of products on Black Friday can mask actual performance –  in 2016, 54% of the total number of returns from Black Friday were made by mid-December and 70% by Christmas Eve; meaning they were unavailable for purchase during peak trading (Ingenico)
  • Between midnight and 6am, smartphones were the device of choice (most probably because people were shopping from their beds) – 74% of transactions came from a mobile device during this time, though it would likely decrease as people arrive at work (Salmon)
  • Black Friday continues to grow in importance around the world, with Sweden (+70%),  France (+42%) and Benelux (+39%) securing the highest year-on-year growth as of midday today (Awin)

Further updates

Our update on Black Friday sales performance will be available on Monday (27 Nov) afternoon.

By: Andy Mulcahy, Strategy and Insight Director, IMRG

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