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Is Black Friday more important than Christmas for retailers?

By Will Gillingham

In 2017, IMRG found that high discount rates (40-50%) were already available right throughout November in the lead up to Black Friday. The only difference on the day itself was a far higher number of retailers participated in the discounting.

The below graph illustrates this point; it shows the number of retailers, from a sample of 210 we were tracking, that had a discount campaign running throughout November. Over the Black Friday week (w/c 20 November) the number of participating retailers goes up but, as can be seen, there were already plenty offering 20-50% off well in advance of that (note: not all of these were Black Friday-specific campaigns; we included any retailer that was running a dedicated discounting campaign).

Black Friday graph

The extension of the day of discounting into a month-wide phenomenon has caused November to be a significant period in the minds of both shoppers and retailers. The flood of eager deal-hunters and semi-crazed parents grappling with the Christmas deadline appears to have pulled a volume of sales activity out of December and into the earlier month, to the extent that there was a 1.5% drop in December purchases in 2017.

Month-on-month growth data from the IMRG Capgemini e-Retail Sales Index further underlines how Black Friday has disrupted established patterns of growth between the months, with the drop moving into December declining over the past few years.

Month on month Black Friday chart

But has Black Friday become a larger event than Christmas? Are more marketing campaigns created, more deliveries made, and is more website optimisation employed with an emphasis on Black Friday, rather than on Christmas? We approached our community of solution providers for their expert insight.

The overwhelming, and perhaps surprising, sentiment is: no. Black Friday seems to be seen as an untamed beast, capable of generating a good deal of revenue, but in a haphazard, crazed kind of way which doesn’t guarantee any futureproof value.

Kevin Edwards, Global Strategy Director of Awin, had this to say: ‘Black Friday has a function that is increasingly distinct from Christmas. Given Black Friday is around one month away from Christmas, our research indicates it’s a generalist shopping opportunity: the chance to buy gifts for yourself as much as for others.

‘It also enables non-retailers to get involved, with customers using the day to change mobile contracts or mobile providers. The significant increase in traffic allows everyone to get involved, while Christmas has a narrower focus on inspirational present buying. The overall impact of Black Friday has been to make November the pre-eminent trading month.

‘Black Friday remains a pretty blunt instrument: there’s little that’s brand-led about it, as discounting is the overarching message. It often feels like a temporary interlude that interrupts a brand’s otherwise carefully orchestrated Christmas marketing campaign. That said, many embrace it and make a success of it.’

Pile of presents

From the technical side of things, the story remains much the same. Coeo, who are called on prior to the peak period to provide services specifically to IT departments of businesses (rather than the business as a whole), rarely receive requests to reform for Black Friday: Christmas is still the primary influencer.

James Boother, Sales and Marketing Director, Coeo: We look at it from quite a technical perspective because we’re delivering solutions and services into the IT department as opposed to the wider business. We haven’t seen a lot of demand for work to be done ahead of Black Friday, however we’ve had a lot of enquiry about work in preparation for peak at Christmas.

‘This might be due to traditions and expectations from the IT departments that we’re dealing with, and that might change in the future as UK retailers start seeing a profile change in trade and see Black Friday as important during the peak period as Christmas.

‘Over the last few years Black Friday has certainly become an important event for all retailers and has really landed on the calendar in the UK, after coming over from America. I wouldn’t say that it’s more important than Christmas here yet, although, as we have seen in the last few years, online retailers are again running lots of events around it. We still have strong traditions in the UK around the Christmas period for retailers, and I expect that will continue.’

Coffee and tech

Nevertheless, IMRG’s figures show an inflating Black Friday. As if in acknowledgement of that fact, each of our contributing solution providers issued warnings to prepare for the probable swell.

Ciaran Bollard, CEO of Kooomo, states that retailers need to be wary of getting lost in one half of the peak season: ‘The statistics around the importance of Black Friday for retailers are both undeniable, and unavoidable. And because there is so much emphasis being put on Black Friday for retailers, what you’ll often find is that they are pumping all of their resources into that one day/weekend, rather than taking advantage of a much bigger opportunity that drives sales for the entire holiday gifting season.

‘Think about consumer behaviour around the holiday season. There are two distinct types of people – the early birds, who do the bulk of their Christmas shopping weeks (or even months) ahead of time, and the adrenaline-junkie shoppers who procrastinate until the clock runs down to closing time on Christmas Eve.

‘The smartest thing that retailers can do when it comes to Black Friday and Christmas promotions is firstly to stop viewing them as isolated days, but rather as one overall shopping season.’

Christmas tree

Boother takes this further, identifying that the broadening seasonal promotions and discounts could extend into a pressurised environment of year-wide deals: ‘Probably the bigger concern is around the downward pressure on price for all retailers, all year round. We’ve seen over the last five or ten years how the pressure to discount has increased and many retailers are running much more regular promotions now than they were in the past, where we had much more seasonality around promotional activity.’

And seasonality itself is worthy of note, particularly for those retailers working on an international scale. Where Christmas, for now, seems to still take pride of place for British retailers, Black Friday may tell a different story in America, its home turf.

And a new day of discounts is also broaching international waters: the Chinese Singles’ Day. However, while expected to boom over the coming years, its effect in the UK and Europe is up for question, owing to it sharing its date with Armistice Day.

Edwards: ‘With the growing internationalisation of ecommerce, we have witnessed a crosspollination of ideas and campaigns in November. With brands keen to seek out additional promotional opportunities, Singles’ Day is viewed as a further chance to push their products, especially for companies with an increasingly international focus. With its intriguing mix of entertainment, branding and shopping, Singles’ Day offers a fascinating window on how future Western retail events could look.’

So, while Black Friday is expanding, Christmas is still front-and-centre for the British population, at least as far as estimates and speculation can tell.

But will peak period throw another operational curveball this year, just as it did with Black Friday in 2014 when it really exploded into the public consciousness? Only time will tell.

By Will Gillingham, Content Executive, IMRG

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