It's hard to believe that Black Friday is a relatively new import to the British retail calendar such is its importance on the “golden quarter”. For many, the image that comes to mind first when thinking of Black Friday is hordes of people clamouring for discounted TVs, and whilst that may have been true for some of the formative Black Fridays it’s fair to say that the way in which both retailers and consumers approach this period of seasonal discounting has evolved. This article looks at four ways in which retailers and consumers will approach Black Friday 2018.
One of the main ways in which Black Friday has evolved has been to remove the emphasis on a single day of trading and to spread deals and discounts over a period of around two weeks. For retailers, the benefit of doing this is clear; for store-based retailing it removes the need for consumers to queue and clamour on one particular day and instead, stagger footfall over a longer period of time. Whilst for online, the channel which has undoubtedly seen most growth on Black Friday, it negates any bottlenecks around logistics and allows for more seamless fulfilment strategies.
For consumers, the ability to have a longer period of discounts and offers means that they can properly plan where and how they spend their money. This plays into two consumer behaviours, which have slowly evolved from the 2008 recession. The first is the need for pricing transparency, allowing consumers to plan their expenditure, especially when household budgets are tight or there is economic uncertainty. The second is that the growth of smartphones means that consumers can very quickly hunt down the best deals on particular items at the touch of a button and I’m sure I’m not the only one who is currently scoping out these deals on the morning commute. In extending the period of Black Friday deals, retailers allow consumers to assess the offers and discounts available and to make informed decisions about their purchases.
With these factors in mind, it is perhaps unsurprising that the strategist approach favours big-ticket items such as consumer electronics, such as TVs, Tablets and Computers, all of which are a popular choice on Black Friday, and 2018 will be no exception. It’s no secret who the retailers are that follow this approach, largely because they’ve already started their Black Friday promotions, but certainly those with a strong consumer electronics offering and omni-channel capabilities, such as John Lewis, Currys PC World and the grocers should do well.
The “me-conomy” represents the growing sense of self within retail as consumer purchases are increasingly informed by their sense of individuality and beliefs and expect retailers and the products they sell to reflect that too.
This is a trend is heavily driven by lifestyle and, consequently, the retailers that will do well in relation to this are those that have a strong identity and a dedicated following. Social media engagement is a fundamental driver of this and therefore brands such as Glossier and Gymshark, both of which have a strong, lifestyle driven social media following are amongst those brands that will do well.
From a consumer perspective, this trend runs deeper than it may at first seem but one thing is clear; there is nothing superficial about it. For the "me-conomists" amongst us, this is about making your money go further either through buying from brands you are already invested in and making a saving on something you’d be buying anyway or through trading up and buying something that is normally out of your price range.
As a result of the trading up effect, luxury beauty is likely to do very well. This could mean good news for specialists such as Charlotte Tillbury and retailers like John Lewis as well as support to Debenhams and House of Fraser both of which have strong beauty lines. The psychology of the “affordable treat” also comes into play with this trend. Since the early 2000s and reflects the fact that lipstick sales go up in times of economic crisis as an affordable way to brighten up and change your appearance without a new wardrobe. Following the 2008 recession, this mentality was also extended to things like take-out coffee and represents a small purchase that has a big impact. It may well be that given their connection to the economy and instability “affordable treats” may do exceptionally well this year, because if 2018 has delivered one thing, it’s uncertainty!
Patagonia and REI are the most well-known examples of retailers eschewing Black Friday and instead using it as an opportunity to highlight their corporate culture. In recent years REI has closed all of its stores on both Thanksgiving and Black Friday in a bid to practice what it preaches and encourage its employees to spend time with their loved ones in the great outdoors. Patagonia on the other hand has remained open but in 2016 hit the headlines for donating 100% of proceeds from the day to grassroots organisations working on environmental causes.
For British retailers and consumers the oft-cited reason to not participate in Black Friday is the fact that it’s not a British tradition. However, it is telling that retailers who have previously not participated, such as Next and Jigsaw, for fear of diluting their brands have started to join the fray, such is the transformative nature of Black Friday on the British retail industry.
It is fair to say that amongst consumers there is some scepticism over the nature of Black Friday deals which comes with a reluctance to participate. A recent survey of Black Friday deals by Which? found that 90% of items promoted as part of a Black Friday deal had actually been cheaper at other times of the year. As with The Strategist approach mentioned above, the need for retailers to engender trust through transparency is fundamental to modern retailing. Consumers will vote with their feet and wallets if it’s not.
This year is the first year I’ve noticed non-retailers participating in Black Friday at scale, from my local beauty salon to EasyJet taking out full page ads in the Metro. On a day where consumerism is rife, the irony of these particular deals is that they tie is so well with the growing experience economy and consumers having less but doing more. Given that many retailers and high streets are experiencing challenging times the ability to attract consumer footfall and spend through offering experiences, whether free treatments or discounts off a meal at a local restaurant, is a fantastic way to tap into this trend.
Only time will tell which products and retailers do well on Black Friday but it is safe to say that it is a day that is here to stay.