Black Friday strikes again. The post-Thanksgiving day of shopping discounts is a recent US export and retailers are rolling them out once more. Last year saw crowds of shoppers quite literally battling for the bargains to be had.
Retailers will be hoping that the upward trend in Black Friday sales will continue. The “holiday” made a first tentative appearance in the UK in 2010 when Amazon experimented with offering discounts and last year sales took off. In 2014, UK consumers spent £810m on online purchases alone and a further £720m three days later on Cyber Monday.
What is Black Friday?
We are all probably aware of the term Black Friday (BF), this retail concept sees many of the larger high street retail chains in the UK dropping their prices on the last Friday in November (this year in the UK, it falls on November the 27th). The term Black Friday originates with our American cousins who first coined it in the 1960s, to detail the Friday after Thanksgiving, in which many retailers drop prices in an attempt to shift unsold merchandise, resulting in a large patronage of customers. Others have drawn reference with the accounting practice of recording profits in black rather than in red (a loss), either way it still amount to the same thing, lots of people trying to get a bargain, at any cost.
The ugly side of Black Friday
Whilst many have been critical of the Black Friday spectacle that last year saw hundreds if not thousands of would be bargain hunters in the UK pitting their physical dexterity and cognitive cunning in a game of cat and mouse, in an attempt to obtain a real bargain. One would be hard pressed to forget those television scenes from last year’s Black Friday with Yuletide festive shoppers scrambling, fighting and grabbing anything that had been discounted (or not) from a large plasma screen to a child’s cuddly toy.
Such scenes in a number of cases became ugly and were themselves on a par with a boxing match, with testosterone fuelled customers going to any lengths (including injuring fellow shoppers and store assistants) to get their prized gifts (clearly not Queensberry rules). That said such retail events do themselves boost the economy with tax receipts and national insurance contributions all aiding the exchequer, with an estimated £860 million sterling being spent on the same day last year (this is the equivalent of the combined annual budget of Greater Manchester Police and Merseyside Police Force).
Why is Black Friday good for business?
In terms of the motivations behind retailers selling marked down stock weeks before Christmas (as opposed to the traditional format of after Christmas, in the January / New Year sales) this probably lies in the motivations of retailers wanting to liquidise any assets into cash and to make room for new stock. Clearly such a retail strategy has some level of risk, as those retailers that choose to partake in Black Friday might see sales slump earlier in the year or at other festive celebrations, such as Easter and Eid, with customers choosing to put off any purchases in exchange for the possible bargains and rewards for waiting for Black Friday.
Entice shoppers to purchase all year round
Added to this all retailers need to manage their product portfolio over 12 months of a year and use innovative and sustainable marketing practices to entice shoppers to purchase all year round. As to whether or not Black Friday is a financial success for retailers one will have to see. In the short term many retailers continue to engage with Black Friday, but interestingly some retailers including Asda have commented that they will not be partaking in Black Friday this November, choosing to distribute customer savings throughout the year rather than just on Black Friday.
This comes on the back of a plea from Police Chiefs who have urged other retailers to follow suit with Asda and not run Black Friday related events, with the fear of riots, social insurrection and anarchy all possibly being played out in the frozen food isle at your local convenience store. Don’t worry if you miss Black Friday, Cyber Monday is just around the corner (discount sales via your favourite on-line retailers) stay calm, there are plenty of bargains out there for us for us all. Have a safe and happy Black Friday.
However, this year many of the UK’s big retailers, including Tesco, Curry’s PC World, Halfords, John Lewis, eBay and Amazon, are looking forward to an increase in sales. The forecast by the Centre for Retail Research for the 24-hour period is to reach around £1.39 billion – and online sales are estimated to be £966m, and £3.5 billion for the whole weekend.
Will BlackFriday chaos increase in 2015?
In 2014, Black Friday sales were helped by the increase of 2.3% in UK disposable income – the fastest rate of annual growth since 2010, which gave consumers the confidence to spend more. With a further rise in 2015 spending is expected to be high once again.
Asda is not participating in Black Friday this year – it’s not hard to imagine why.
Given our appetite for bargains, retailers are gearing themselves with even bigger promotions to tempt their customers. They use various tactics to encourage us to take up their deals. Asda’s “flash sales” in its stores last year led to some of Black Friday’s more dramatic scenes. And online Amazon too offers limited-time “lightning deals” which puts new deals up every ten minutes. Buyers have to act quickly to get the deals and may as a result make hasty decisions and buy things they wouldn’t otherwise.
Clearly some get excited by the buzz and the adrenalin rush of fighting their way through the temples of shopping malls or waiting impatiently biting their nails for the slow loading websites. For some, competing and getting what they want at a much reduced price – or even in some cases what they don’t want – gives a sense of achievement. It can have a positive knock-on effect for the retailers when people take pleasure in boasting to friends and family about the “trophies” they have “won”.
Black Friday is a huge planning operation.
REUTERS/Neil Hall
But some retailers have realised there are some who are less inclined to enter into the fray. Argos, for example, is running a campaign called “Red, White and Blue Fridays”. The retainer has offered deals on the three Fridays prior to November 27, Black Friday, in a bid to make its shopping experience more attractive to customers. Asda is going one step further and is no longer participating in the event this year – despite being widely credited for making Black Friday popular in the UK. Instead, it is reducing prices by a total of £26m over November and December rather than holding customers “hostage to a day or two of sales”.
Black Friday chaos lessons learned by Asda?
Perhaps Asda wants to capitalise on the bad press that Black Friday received last year. There was widespread criticism of the Black Friday spectacle which included ugly scenes of shoppers scrambling, fighting and grabbing at goods. But, despite the scenes of bargain bedlam, there’s no denying that these kinds of retail events boost the economy and the tax receipts and national insurance contributions all go towards aiding the exchequer.
As well as the huge sales they can make on Black Friday, retailers can also use the event to liquidate any assets into cash and make room for new stock. Clearly this retail strategy has some level of risk, as retailers choosing to partake in Black Friday may experience a sales slump at other times in the year as customers choose to put off any purchases in exchange for the possible rewards of waiting for Black Friday.
Added to this, all retailers need to manage their product portfolio over 12 months of a year and use innovative and sustainable marketing practices to entice shoppers to purchase all year round. So it’s a military-style operation for the retailers involved, as much as it is for shoppers looking to snap up the best deals.
Have you benefited from Black Friday?
Do you think the trend should continue or should it be stopped by retailers?
Tahir Rashid, Senior Lecturer in Digital Marketing and Strategy and Neil Robinson, Lecturer in Business and Marketing, University of Salford
This article was originally published on The Conversation. Read the original article.