Has Black Friday lost its gloss?
When Black Friday first emerged onto the scene just over a decade ago, retailers could expect queues out the doors, and on some occasions even fighting in the aisles as consumers sought bargain deals. When Cyber Monday entered the fray, retailers’ websites regularly crashed under the strain of excited bargain hunters.
While these events used to provide a boost across the board, there are now clear winners and losers as Black Friday discounting loses its shape and starts to merge into the Christmas shopping. With marketing and sales events starting earlier each year, is now the time for a re-think?
Pressure on retailers
It has been a tough year for retailers. Again, we have seen big names disappear from the high street, and for those that remain the environment is challenging. Increases in production and supply chain costs muddled with competition from big online retailers are reducing profit margins, leaving leaders with tough decisions to make.
Many larger retailers can afford to discount their products as brands support margins and economies of scale apply. However, it is not the case for smaller independents who have to take the hit. They feel they need to take part in Black Friday to compete, and unfortunately, this is adding to the strain they face in keeping their doors open.
Poor deals result in underwhelming sales
Those retailers who can afford to offer site or store-wide discounts are still doing well, but the deals available on Black Friday are not what they once were. Many offers are only applied to end-of-line items or overstock that were heading to the sales anyway.
As a result, many consumers are left underwhelmed. With the cost-of-living crisis, consumers have been spending more carefully than before too. While Nationwide announced a 2 per cent increase in transactions, Barclaycard transactions were down 0.6 per cent year-on-year, suggesting that consumers were happy to spend, but less comfortable with borrowing than they have been in previous years. This hesitation to spend means that consumers are often only prepared to spend on items they were already planning to buy.
The offers created are typically determined by scale and buying power of the retailer, so while large retailers can offer bigger discounts on more products, small retailers are forced to be more selective, leaving them with a smaller piece of the pie, or with severely cannibalised margins.
Lack of differentiation makes Black Friday pointless
We started out with just Black Friday – just one day of epic discounting – and over the years this has expanded to include the weekend, and the following Monday (which is, of course, now known as Cyber Monday), then the weeks before and after, and now the entirety of November, it seems.
Not only has the Black Friday discounting period expanded, but Christmas promotions, supported by seasonal adverts, also seem to start earlier and earlier. It is tough to see any differentiation or even a gap between when one event ends and another begins. Diluting Black Friday only serves to make it disappear into the ether.
The expansion of the sales window means retailers can take a chunk of the seasonal revenue in November as there’s no longer the frenzied buying for Christmas in December. And for consumers, there’s no panic to buy over black Friday weekend as they know there will be other sales, which is understandable and makes commercial sense.
Do consumers care if Black Friday dies?
Recent research from PwC reveals that online interest in Black Friday has dropped from 61 per cent in 2022 to 44 per cent this year. This is mirrored by Google Trends data, which reveals that ‘Black Friday’ as a search is less than half as popular as it was four years ago. With waning consumer interest, it’s clear that Black Friday just doesn’t hold the same intrigue it used to.
Rather than thinking about what we could do to rejuvenate Black Friday, perhaps it’s time to think about whether we should. Black Friday certainly isn’t working for all retailers, in particular independent retail, and it is starting to lose consumers too. It no longer delivers the same benefits for consumers: excitement, buzz and big bargains, or the same, sizeable sales uplift for brands. In some cases, it is coming at the expense of the customer experience, which threatens the long-term performance of brands.
Is it actually worth retailers’ time and effort? My hunch is that it has detracted from the millions invested in Christmas advertising campaigns that now seem almost irrelevant, and blend in as white noise as we skip through the ads to go make a brew.
Daniel Todaro is a founding partner and Managing Director of Gekko Group, a UK & Ireland based agency group, which specialises in Shopper Marketing & Customer Experience for the Consumer Electronics, IT and Leisure sectors.
This was posted in Bdaily's Members' News section by Gekko .
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