Two years ago we were about to experience Black Friday for the first time. A handful of retailers had already dipped their toes in the water the previous year, but 2014 was when most of the industry dived in. And what a disaster it proved to be. Aside from appalling PR with National TV news coverage of fist fights and mass scrums in leading stores, it was financially damaging to most of the industry.
The idea of offering huge discounts just as most UK retailers traditionally launch their full margin Christmas offers was crazy. In 2014, Black Friday-fuelled November sales volumes soared and although the industry still managed to drive Christmas spending up, it had to discount prices (and therefore margins) to do so.
Last year the impact was much more muted. While pure plays still managed a Black Friday boost to November, mainstream non-food retailers saw only modest spend increases. And even so, Christmas was the weakest we have seen in 25 years and spending was down 2.5%.
I’m expecting last year’s trading pattern to be repeated this year. The key change over these two years is that discounting has now become a permanent feature of every retail sector. Back in 2014 Black Friday was a novelty and we were only just beginning this unprecedented cut-price market. As we approach the big day, our data show that on average, 64% of non-food retailers have been on sale so far this calendar year. Black Friday 2016 will be just yet another price promotion – the novelty value has been discounted.
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