The Black Friday dilemma continues

In our first post on this subject, in 2015, we reported how the preceding 2 years had seen this American Thanksgiving-related phenomenon grab a strong foothold in the UK, initially being driven by Amazon and Asda’s American parent Walmart.

With pressure to participate, we had seen more and more retailers being dragged into the Black Friday mayhem, at the very time that they wanted to hold prices - and margin - on the eve of their key trading period of the year.

We also reported that some retailers had been holding their nerve, in the challenge of "Blink & You're Out" as they had chosen not to participate in the discounting ahead of peak trading.  Primark and Mothercare, in particular, had not offered discounts, but equally had seen footfall and sales increase in the customer feeding frenzy of Black Friday.

So where are we now, two years on?

The last two years have seen even more disruption to the market, largely led by rising inflation thanks to currency issues and the uncertainty of Brexit curbing consumer spending.

In response to this, both retailers and consumers alike have adopted a more targeted and calculated approach to Black Friday and the days surrounding it.  In fact, Asda who were at the forefront of Black Friday, with those chaotic scenes with in store fighting in 2014, is no longer participating, instead backing its strategy of “lower prices all year round”.

Even more retailers have opted out, including IKEA, Next, Marks and Spencer and Fat Face. Some online even shuttered their online sites for the day in protest. In fact, in an interview with the BBC, Fat Face CEO, Anthony Thompson, described it as “bonkers … bad for retail, bad for business with make believe promotions and fake offers”. Some of his comments seem to be supported by a recent Which? report revealing that monitoring of tech and personal care products over a 12-month period had shown that 60% of Black Friday deals were at the same price or lower, just weeks or even days later.

By contrast other retailers, such as Sainsbury’s Argos, are continuing to embrace Black Friday, so much so that for them it’s no longer Black Friday, but a Black Fortnight as their offers run from mid-November.  Why is it proving so successful for Sainsbury’s Argos?  They attribute this to their strategy of working closely with their suppliers to identify the right products with the right price for the period.  John Lewis is another retailer with a targeted approach, underpinned by their “never knowingly undersold” policy with an approach of updating prices during the day to reflect the market.

Equally, a number of participating retailers, though offering the range of discounted products, have limited their availability so reducing their exposure to reduced margin goods.

Just as many retailers have become more targeted in their approach, so too have customers become more sophisticated.  In the past, peer pressure and retailer promotions have dragged customers online and into stores and many spent more than they had intended to.  There is clear evidence this time around that tech-savvy consumers are monitoring and analysing the published prices on specific products, not just on Black Friday but in the weeks and months in advance, using smart phones to store and track data.

With information at the touch of a button, it’s more akin to traders on the stock market.  In many ways, what is growing is “reverse retailing”, no longer is tracking behaviour solely the retailers’ domain; so, the consumer is now tracking retailers’ behaviour.  This whole approach is being driven by data, with sites like and providing price tracking data on demand.

So, who has got it right? 

Early estimates are that Black Friday 2017 in the UK has generated £8 billion in sales to date but the true picture won't be known until we see the impact on Christmas trading and January result. That said, the feeding frenzy seems to be a thing of the past with online sales continuing to grow but with the anticipated queues outside stores simply not materialising. Analysts Springboard noted that High Street footfall was down by 4.2% on the day itself. So perhaps many shoppers have bargain fatigue – after all, the hashtag #buynothingday was also trending on Friday’s social media.

(Above) Mike Parkes, Partner Momentum Results LLP and Programme Director for OSS Masters and Dr Jonathan Reynolds, Deputy Dean and Director of Graduate Studies, Academic Director, Oxford Institute of Retail Management, Said Business School

If you want to learn more about the latest retail thinking and future retailing trends join Mike Parkes and Dr Jonathan Reynolds at the OSS Masters, Said Business School, 26th February – 1st March 2018)

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