It’s back! For better or worse, love it or loathe it, the annual jamboree is returning to the UK this weekend, to delight some and to haunt others. Around £5 billion will be spent over a four-day period.
Are retailers becoming wiser or are they now the victims of this ‘fake news’ fest imported from the US in the last decade? Has it reached the stage where they can’t not be involved, in case they create a bad impression with customers in the vitally important run up to Christmas? ‘Bah humbug’ (often smaller, independent) non-participant retailers live in fear of a loss of customer footfall.
Some retailers have been likened (by Michael Ward, MD of Harrods) to turkeys voting for Christmas. Certainly, hugely discounted prices in the peak trading season are bound to have a short-term detrimental effect on profits, with no guarantee of further sales to make up the reduced margins. That’s even before counting the cost of goods bought In haste by over eager shoppers that are caught up in the returns system and won’t be sold before the new year, if at all.
Customer data from 2016 indicated a highest ever level of expenditure. Double digit percentage increases have been noted year on year for several years, demonstrating no lack of appetite for the event, despite the concerns voiced by many. 2017 is unlikely to buck the trend.
Impulse buying is still the principal feature, but as shoppers come to anticipate deals, with the retail festival now a known date in the calendar, more purchases are planned. The peak time for spending is apparently 1.30 pm, coinciding with lunch hour searches or an organised day at the shops.
The biggest impact is noted in clothing, (home) entertainment and household/electrical items. Higher ticket items are where the greatest savings are likely to be achieved. Supermarkets take a substantial share of total spend, but other retailers stand to gain more in percentage terms.
Predictions relating to the proportion of online purchases vary. Some say it will be as much as three quarters. Others suggest that two thirds will take place on the High Street, or more accurately in malls and (out of town) shopping centres. At least it should be enough, as retailers also become better able to control any excesses and websites become more resilient, to avoid the chaotic scenes witnessed in 2014. Some consumers however, apparently still believe that it is worth being bumped and jostled, pushing and shoving, so that they may benefit from that once in a lifetime deal on a flat screen TV!
With 25th December falling on a Sunday this year, Black Friday spending is small fry compared to what is anticipated during Christmas week, starting on Monday 18th December and building to a peak on Christmas Eve. Last minute purchases of gifts and food are unlikely to go out of fashion any time soon. The post-Christmas sales are also enshrined in our culture, with many now beginning on Christmas Day itself.
Every weekend between now and the midwinter holiday is vital to the retail trade. For consumers who plan well however, and wish to maximise limited resources, this presents the opportunity to buy more for less and reduce the rising cost of the festive season.
Bring it on!
Andrew Turnbull, Senior Lecturer In Retail Marketing