Black Friday 2016 – Don’t Believe the Hype

Black Friday” is an American import into the UK retailing scene. Its origins date back to 1932, when the day after Thanksgiving Day, (the fourth Thursday of November), was regarded as the beginning of the Christmas shopping season. So most stores opened early – and in recent years, overnight – and they started to offer promotional friday

Opinions vary as to exactly when and where the term “Black Friday” originated. Some say it dates back 1961, when the city of Philadelphia used the term to describe the excessively heavy traffic on that Friday; while others maintain there is a more recent explanation, namely the day when retailers turn their results from being “in the red” to “being in the black”.

Black Friday in the UK?

The first Black Friday in the UK took place in 2013 when the giant American retail company, Walmart, announced that its UK subsidiary, Asda, would be promoting the American concept of a Black Friday. The announcement received mixed reactions. Some online and in store retailers followed suit, while others called it an “Americanism” that would never work across the pond.

In 2014, many more UK-based retailers, including Amazon, John Lewis, Tesco and Argos, decided to join in the Black Friday marketing promotion and all of them offered huge discounts to tempt the pre-Christmas shoppers.

However, many participating stores were totally unprepared for the chaotic crowds of mass shoppers who packed their stores – which led a number of unsavoury incidents. Online, the demands were so great, that many major retail websites crashed.

What happened in 2015?

Asda, the chief originators of Black Friday in the UK, decided not to participate in 2015, citing their need to provide a better shopping experience for their customers. Other stores, such as Mothercare, New Look and Oasis, followed Asda and declined to partake – citing damage to brand reputation, the high rates of returns and a skewing of sales during the Christmas period.

But more retailers decided to join in this new marketing phenomenon.

Major brands, such as Apple, Very, Currys PC World, M&S, John Lewis, Game, and many more all increased their Black Friday discounting activities.

The withdrawal of some retailers didn’t stop the 2015 Black Friday being an enormous success, and the massive discounts offered helped to drive a surprising jump in retail sales.

Official figures showed retail sales volumes were up 1.7% from the month before, beating forecasts of 0.5%, and the “year on the year” sales volumes were up 5%, beating the 3% growth forecast. Although discounting accounted for much of the increased sales volume, Black Friday sales in 2015 helped the UK to end the year on a positive note.

Amazon claimed that 2015 Black Friday was its biggest sales day in the UK ever, with 7.4 million items being ordered, and overall, shoppers in the UK spent £3.3 billion during the weekend, with £1.1 billion on the Friday itself, up from £810 million in 2014.

The major retail stores had learned from their mistakes in the 2014 fiascos. They developed more sophisticated ways to offer discounts on selected products – rather than just slapping discounts on everything. They also had a better command over their stock control. Some stores hired extra staff to provide customers with a more orderly service, and as a result, there were few of the unpleasant incidents of the previous year. This was also helped by the fact that more shoppers opted to shop online, rather than visit the stores.

Black Friday And Online Retailers

Online retailers had also learned from their mistakes and had upgraded their systems to make them more robust. They knew when to expect peak demand – after midnight and early in the morning – and they upgraded their software so that customers would be held in queues, rather than suffering annoying system crashes.

The Future of Black Friday in the UK?

There is little doubt that Black Friday is here to stay, as the figures speak for themselves. In 2014 there was a 62% sales increase over 2013, and in 2015, the sales increase was a whopping 223% over 2014. Although there may be some sales ‘balancing effects’ over the entire Christmas sales period – particularly from the traditional Boxing Day sales which continue to decline – the overall results for Black Friday are expected to be a resounding success.

There is no sign that the retailers who led the Black Friday charge last year won’t be back with bigger and better bargains in 2016. Discounts will be negotiated in advance with suppliers, and store customers will be even better served. For the online retailers, their systems will be more robust to handle peak demand.

Analysts are predicting total sales for the 2016 Black Friday weekend to be around £5 billion, as compared to £3.3 billion for 2015. So it is vital that all retailers ensure that if they are going to participate, their systems and processes are optimised to cope with demand.

Online merchants who wish to capitalise on this pre-Christmas bonanza should address these key issues first:

  • Website Performance: speak to your web team now about how they can ensure your website can cope with increased demand,
  • Third Party Resources: all parties that support your online shop (such as payment gateway providers) must also be aware that you expect peak visits and sales on Black Friday and should work with you to make this a success,
  • Customer Payment Experience: an excellent payment experience is more important than ever when you want to capitalise on sales during a limited period of time. If your payment journey has too many obstacles along the way, now is the time to resolve these and remove friction,
  • Conversion Rates: similarly the customer journey needs to be optimised for conversion. If there is room for improvement, get it sorted now,
  • Cyber Fraud: as well as genuine Christmas shoppers expect cyber criminals and fraudsters to also be more active at this time of year. Are your systems and fraud prevention tools robust enough to cope with an increased level of attack?
  • Pre-Christmas Returns: also expect an increase in returns before Christmas if you have participated in Black Friday. You will need to handle refunds within the statutory timeframe (14 days) as consumers will want to get their hands on their money to spend it on alternative gifts.

Black Friday is on 25th November this year.