Black Friday: A Race to the Bottom?
Forget Black Friday. It seems to be Black Monday, Tuesday, Wednesday, Thursday, Saturday and Sunday on the high street right now….
So, is the constant discounting the reason retailers are scaling back their Black Friday promotions this year? We find out. And (spoiler), it’s not that simple…
Black Friday 2018
Black Friday last year was a discounting bloodbath. 2018 saw more retailers jumping on the bandwagon than ever before.
UK consumers were reported to have spent £7 billion over the Black Friday weekend, with most shopping online, with time-limited discounts typically of between 20 and 30%.
Black Friday 2019
The ‘Kiss of Death’ for the Christmas Season
Consumers increasing expect Black Friday discounts to continue through Christmas and into the New Year. The danger of planting the ‘sales’ mindset too soon in the year is that it’s difficult to get consumers to pay full price again for something that’s been discounted.
Earlier this year, MPs asked the government to introduce moves to force fast fashion retailers to do more to tackle issues like environmental damage and excessive waste. Consumers too are increasingly valuing sustainability, and pushing people to buy products they don’t really need it strongly at odds with this.
Indeed, clothes account for half a million tons of non-biodegradable microfibers reaching the oceans every year, the equivalent of more than 50 billion plastic bottles.
Economic Uncertainty – Profit Over Sales
With Brexit making people nervous, high street sales are struggling. By the time the end of November comes around - typically Black Friday territory – we’ll (fingers crossed) finally have some certainty on how Brexit will play out. And, if you believe the experts, it won’t be favourable.
Mark Carney recently observed that under a no-deal Brexit:
“The change in trading relationship means that consumers real incomes will be lower".
British Retail Consortium CEO Helen Dickinson has also said:
“Our own research suggests that currency depreciation, additional documentation checks and requirements, tariffs on some goods, as well as delays at the border, would all contribute to higher prices and a reduced selection”.
So, if discounting is the only weapon in a brand’s arsenal, Black Friday essentially becomes a race to the bottom for retailers.
Unprofitable and Unsustainable
In order to lessen the financial pain of such large discounts, some stores partaking in Black Friday this year, are likely to repeat their tactic of increasing retail prices immediately prior to the event. This makes it seem as if consumers are getting a better deal than they actually are. So really, is it just a pointless marketing ploy that consumers are wising up to?
For brands that can’t afford or choose not to participate in Black Friday this year, they’ll join an increasingly long line of brands. Last year, Asda chose not to take part in Black Friday at all, despite being one of the first to jump on board.
This was apparently in response to feedback from consumers who told the company they would prefer savings throughout Christmas, instead of being “held hostage” by a 24-hour flash sale.
Is your brand taking part in Black Friday this year? Why? Why not? We’d love to hear from you.
Email us your thoughts.
Photo by Claudio Schwarz on Unsplash.