Black Friday Bonanza – But At What Cost to Premium Beauty?
In just five years, Black Friday has become the biggest retail event in UK history and is set to break the £1bn barrier this year, according to Experian IMRG. Although officially taking place this Friday, November 27, most retailers are launching offers the day before, or even at the start of the week.
It all started when Amazon used Black Friday as a way of attracting customers through massive time-sensitive “lightening deals”. Amazon’s success didn’t go unnoticed and by 2014, most major retailers including Boots, John Lewis and Marks & Spencer, were keen to get a piece of the action.
This year, many retail records will be broken, including the biggest smartphone shopping day ever, predicts Rob Fenton, UK managing director of Fifty-Five.
And for those that miss out on Black Friday, there’s always Cyber Monday, predicted to generate a further £943m this year.Rob Fenton maintains: “What really sets (Black Friday) apart from Cyber Monday is that it offers consumers both online and in-store bargains, meaning retailers can appeal to as many UK shoppers as possible and really drive sales to kick off the Christmas rush.”
But are the cracks appearing?
Earlier this month, Asda announced that it wouldn’t be repeating the retail frenzy of Black Friday last year, which led to scenes of violence as shoppers fought to get their hands on bargains in-store. Asda announced that shoppers don’t want to be held hostage to a single day of sales and that fatigue has set in around the event.
I don’t believe that to be the case. Consumers love a bargain and retailers cannot resist the opportunity to drive them into store (or online) to make a sale.
But at what cost?
Heavy discounts may bring increased sales volumes but seriously dent retailer profits.
Black Friday discounting brings forward Christmas purchasing making it harder for retailers to sell at full price in December.
Flagging retail sales in December traditionally panic retailers into rushing out more discounts (e.g. Debenhams, Marks & Spencer)
It may be too late this year, but retailers need to take a hard look at whether Black Friday makes sound commercial sense.
Discounting leads to more discounting and feeds consumers’ expectations of a bargain just around the corner.Yet, this is Christmas. Why discount stock that people are going to buy anyway?
Do you think Black Friday is good for retailing? Do share your views in the comments section below.