If there’s one tradition that retailers often look forward to then its Black Friday. The American marketing ploy designed for the retail industry to sell as much as it can at a discounted rate to consumers was imported from the US in 2010. For ecommerce and bricks and mortar stores alike, it’s a weekend that draws in consumers from online purchasing to huge crowds of shoppers in stores around the UK.
This year Black Friday commences on November 24 – falling as always, the day after the US Thanksgiving tradition. Initially lasting for one day only, retail giant Amazon, which introduced the concept back in 2010, and larger retailers often extend this period over a week, sometimes longer.
The retailing event has now become the biggest shopping day in Britain, with an estimated £5.76bn spent last year, according VoucherCodes.co.uk and the Centre for Retail Research.
Online Black Friday
For some the thought of getting up before the crack of dawn and heading over to the local shopping centre to queue endlessly and fighting off crowds to find the best bargain just isn’t appealing. Which leaves no surprise that 2016 saw a 12 per cent rise in online spending on that day alone according to IMRG retail analysts. Apart from being able to shop from the comfort of your own home without the chaos that often Black Friday brings, it also gives you access to a range of products and sizes that retailers offer. Hitting the online sales early means that the limited quantity sizes associated with stores acts as a real attraction to sitting in with a cup of tea and your laptop over venturing out into a day of disorder.
Besides having the comfort of your own home and a range of sizes, the availability of products offered online is staggering. According to ExportX, Black Friday leaders Amazon sells over 261 million products online to the UK – with nearly every item having some kind of discount associated to it for Black Friday.
There is also an endless supply of online stores which opens possibilities to research and gage which is the best product for you to purchase at the best price. Moreover, the thousands of stores at your disposal with one click of a mouse allows you to find the best deals and bargains with very little preparation, turning it into the most convenient way to shop. That said, Visa’s 2016 Digital Payment Study identified a larger increase is people using mobile payments, increasing to 44 per cent from 38 per cent the year prior. Their results showed that nearly half of people surveyed (46 per cent) agreed that having the option of paying using their mobile made it easier for them to purchase items needed, showing the continuous growth of consumers moving away from instore shopping to online purchasing.
In-store Black Friday
Although the online shopping trend seems to be growing year-on-year, Black Friday acts as a fundamental pull into getting consumers back into bricks and mortar stores. ‘Doorbusting’ deals and discounts are often the reason for consumers to head out and purchase items in the traditional way. This form of sales often only occurs once a year and quantities tend to be extremely limited, which makes a good reason for consumers to get out of bed and queue early.
For retailers to get rid of their old stock within their stores often they will create ‘instore only deals’. This acts as a strong incentive for consumers to visit the brick and mortar store so that they don’t miss out on any special in store only deals or hidden gems from the past that may have been lingering around.
A driver that has been contributing to get consumers back into bricks and mortar is the convenience that contactless payment has provided. Contactless payments have become a growing trend since being introduced in 2007 and increased YoY since. Visa’s 2016 Digital Payments Study identified growth from 36 per cent in 2015 to 52 per cent in 2016, increasing across all age demographics, with the greatest increase with the 55-64 age bracket which has seen 64 per cent growth since 2015.
Omni-Channel: Black Friday For The Future
It’s fair to say the that ongoing growth of ecommerce along with the facts and figures to support claims that online purchasing is leading to the suggestion that ecommerce is the way forward for retailers to turn their attention solely to an online presence. On-the-contrary, in an age of global giant retailers Amazon building ground and gaining meaningful influence, retail technology innovation and a shift in consumer behaviours into customer experiences means that retailers should be prioritising their omni-channel in-store and online experience.
Black Friday has provoked a price war throughout the industry of who can sell the most at a discounted price to consumers. It marks the start of Christmas shopping, the busiest period for retailers in the year, yet research suggests that 31 per cent of UK shoppers believe Black Friday deals are no better than other sales throughout the year. A further study by market research consultancy Future Thinking also found that 50 per cent of consumers think the deals “aren’t particularly good and seems to be more of a marketing gimmick.”
Nevertheless, it’s still hard to stand out today when there are so many flash sales, promotions and new and engaging advertisements to tell consumers they are the cheapest around, so even with a killer pro-motional strategy standing out from the crowd seems unlikely.
Retailers however have an opening to do something different and focus on their omni-channel. Black Fri-day can be an opportunity for retailers to compete on the customer experience – not the price to achieve the best long-term results for Black Friday. The shift in consumer behaviour has started to see consumers opt for experiences over spending money on items. 2017 figures from Barclaycard show that consumers are continuing to spend less money on buying things, and more on doing things – and then telling the world about it online afterwards. Creating a shopping experience online and offline during black Friday’s drives traffic and could be a retailer’s opportunity to stand out from online giants. This could act an as enabler to entice consumers back into brick and mortar stores away from heavily discounted brands whilst building on essential brand and customer loyalty.
Therefore, building on the omni-channel and driving shopper loyalty can be more profitable for retailers in the long-term as loyal customers buy more and are often willing to pay more. Increasing customer retention has the potential to boost bottom-line profits from 25 per cent to 100 per cent, whilst acting as a marketing agent by getting consumers to talk about their experiences and share on social media.
Ian Tomlinson is CEO of Retail Store. For more information, visit www.retailstore.co.uk.