Another import from the USA that, like Halloween, many people felt would just go away and retailers chose to ignore for too long, Black Friday is here and does not look like going any time soon. Despite Asda’s scaling back of the operation, somewhat ironic as they were one of the key initiators of it over the last three years, other retailers are embracing it more passionately.
So they should if you look at the numbers: it delivered the biggest shopping day of all at John Lewis in 2014, created a massive spike in both footfall in participating stores and online sales. In fact is eclipses Cyber Monday racking up 180m UK retail site visits on one day, with an estimated online spend of £810M, so when you say no to this, you have to be brave.
Inevitably it brings some issues, scuffling over cheap televisions at Asda Wembley, shots of fights outside Tesco stores in Manchester merely brings into focus the lack of preparation some retailers had put into handling the event. If you hype something to be the biggest sales day of the year then expect to have to manage some chaos, if not you turn the positive PR into very negative PR. Asda’s decision is no doubt a reflection of this negative PR, coupled with the fact that poorly managed it generates little real profit. If customers rush in to the sales items pick a low / no margin product up and rush out then unsurprisingly the retailer feels a little cheated.
Retailers have been experiencing this sort of “cherry picking” for years in promotional cycles, so they should be better prepared to handle it. If Asda or Tesco had appropriate security, limits on store entrants, displays that were easy to select from and had additional margin positive lines included, then Asda would once again be hyping the event. The fact that they have curled their tail and backed away is either due to a hand on the shoulder from Wal-Mart or a recognition of their inability to operate it successfully.
John Lewis have stated that they are ambivalent about the day, recognising the volume and traffic increase but struggling to keep it margin positive. What a great problem to have, too many customers coming in to see the products, all looking for a bargain! Please let’s not suggest that this is not something that good retailers can turn to their advantage: give a good retailer footfall and they will convert, even on bargain days like this, it just takes a little more thought on product selection, display and advance volume buying.
So what is the future for Black Friday? If retailers handle it more professionally, manage to gain additional footfall and/or clicks towards products that they can make some money on through astute buying and good merchandising, then it is here to stay. We suspect that this will be the case and that those like Asda, who have stated they will invest the £26M on products throughout the season, will regret the decision.
Having an additional sales spike before the big Christmas rush is beneficial to all who participate and leaves those who do not wondering why their stores are empty that day. One thing about retail, not just in the UK but across every country we have ever done business in, customers love a bargain; it’s up to the retailer to ensure that they always get one, and that they make money from it.