Now Black Friday is behind us, those retailers who embraced it in a big way need to persuade their customers to buy at full price again. The more you teach your customers to buy into promotions the less they like buying at full price. We have seen this in action over many years: Debenhams and Gap use very frequent price promotions and find it difficult to generate sales in the periods in between.
With just over three weeks to Christmas, the temptation for the industry to go on sale will increase. Black Friday this year will leave many retailers needing to repair their margins, after record sales brought forward purchases that would otherwise have been made in the coming weeks. In fashion, this need was already intense after the unseasonably warm weather in September and October left retailers with huge volumes of unsold stock.
I expect discounting pre-Christmas to hit record levels this year with an inevitable hit to the bottom line. For retailers employing discounting as a central element of their model, lower prices are built into the economic model. For the rest, there is almost invariably a heavy price to pay and we will be seeing the true fall out in the Spring 2015 results season.