It looks as though the research was right. 8.5 million people said they would wait for the post-Christmas Sales before buying their Christmas gifts this year, according to a study by Capital one. And John Lewis has reported that last week’s sales were down 2.4% on the year, having brought forward sales into Black Friday.
The simple truth is that the retail industry has trained the customer to expect mark downs and so they wait, they wait for their trigger price point and then they shop. The customer is confident that they can hold out longer than the retailer, and they would be right. The customer could shop elsewhere, or buy something else. The retailer is sitting on the stock, so of course his nerve will break before the stronger customer.
There is very little that a retailer can do to change the customer’s expectations single-handedly. It is an industry wide problem that has been created by a few in the industry who have the biggest margins to play with. Meanwhile the rest follow or flounder. Last year it was really only Amazon and Asda who promoted Black Friday. This year all the major retailers, and some independents, were counting down to chaos and giveaway prices.
Since then, the level of discount has been deepening by the week and the post-Christmas Sales are inching forward such that many retailer’s Sales will start online today. Those customers that waited, the customers that the retail industry fear, will be rewarded with some incredible bargains, thus encouraging them to wait again next year. Well done us.
Last year PriceWaterhouseCoopers reported 72% of the High Street running sales promotions in the week before Christmas with an average discount of 46%. It’s a pretty safe bet that those percentages will be higher this year.
Retail Remedy provides bespoke, results-focused consultancy for retailers globally, from established brands to high-growth start-ups. Get in touch.