The annual shopping fest ahead of Christmas is returning to the UK this weekend, to the delight of many customers and some retailers. More than £8.5 billion is forecast to be spent in 2019 over a four-day period.
An estimated £30 billion can be expected over 14 days, as many retailers stretch out their offer periods to extend the reach.
Arguably, it is at the stage where retailers can’t not be involved, in case they create a bad impression with customers in the vitally important run up to Christmas. The multiples, especially the electrical retailers, are now the victims of customer expectations, but conversely, they show no signs of losing appetite for the occasion.
The consumer group, Which? suggests, however, that there are fewer bargains than the retailers would have us believe, although the retailers refute this. Nevertheless, Which? found that only four of 83 items in 2018 could not have been purchased for less within 6 months, either side of the date.
Non-participant retailers fear a loss of customer footfall and expenditure, but if they can offer smaller discounts, focused on ‘low’ sales periods, backed up by customisation and personal service, then revenues should be protected. Smaller retailers are more agile and flexible and should be able to adjust faster to changing customer behaviour.
Hugely discounted prices in the peak trading season can be harmful to profit levels, with no guarantee of further sales to make up the reduced margins. Even before counting the cost of goods bought in haste by over eager shoppers that are caught up in the returns system and won’t be sold before the new year, if at all. Online retailers like Amazon, however, take this in their stride and alone, they are said to be responsible for over a quarter of all goods sold on Black Friday deals.
Customer data from 2018 indicated a highest ever level of expenditure. Significant sales increases have been noted year-on-year for several years, demonstrating no lack of appetite for the event, but the chaos ensuing in many retail outlets, most significantly five years ago in 2014, is much less likely now to be a phenomenon, as retailers are better prepared and more importantly, sales are moving online.
Predictions relating to the proportion of online purchases vary, with some estimations as high as 75%. More likely, it will be around one third – still higher than the figure for the year to date, which is around 20% – with the rest taking place on the High Street, or more accurately in malls and (out of town) shopping centres. Some consumers apparently still believe that it is worth being bumped and jostled, in order to benefit from that once in a lifetime deal on a flat screen TV!
Impulse buying remains a principal feature, but as shoppers come to anticipate deals, with the retail festival now a known date in the calendar, more purchases are planned. The peak time for spending is apparently 1.30 pm, coinciding with lunch hour searches or an organised day at the shops.
The biggest impact is noted in clothing, (home) entertainment and household/electrical items. Higher ticket items are where the greatest savings are likely to be achieved, even if in 2018, consumers were buying more, but focusing on lower ticket items.
Black Friday spending is small fry compared to what is anticipated during the last week and a half before Christmas. Starting on Monday 16th December and building to a peak on Christmas Eve. Last minute purchases of gifts and food are unlikely to go out of fashion any time soon. The post-Christmas sales are also enshrined in our culture, even if some of the spend is now diverted to the Black Friday period.
Every weekend until the midwinter holiday is vital to the retail trade. For wise consumers who plan well, shop around and wish to maximise limited resources, there is the opportunity to buy more for less and reduce the rising cost of the festive season.
This Christmas season, however, is the most unpredictable in years. With the uncertainty associated with Brexit still a feature and a general election looming, who knows what the short-term future holds?