Imported from the US earlier this decade, Black Friday is now a firm fixture in the UK retail calendar. Last year we found that more than three quarters of retailers participated in some promotional activity during the week, and some retailers started promoting the event as early as Halloween this year. And after lacklustre retail sales in the third quarter - essentially flat in non-food - retailers will be hoping that shoppers come out in force to kick-start the Christmas shopping season.
But, is Black Friday hitting an inflexion point? Several large British retailers have publicly stated that they will not be participating in any Black Friday promotions this year, preferring to invest in year-round lower prices. And the headline result from our own survey found that half of us are not interested in Black Friday at all, and even amongst those of us who are, we do not expect to increase our spending compared with last year.
Read on to find out our prognosis for 2018, and our recommendations for how retailers should be responding.
While just under half of us claim to be not interested in Black Friday at all (and 11% going as far as to say they’ll be purposely avoiding the shops altogether), our survey also found that 17% definitely intend to buy something over the weekend, and a further 27% are open to persuasion if the deals are good enough.
Black Friday certainly appears to have captured the imagination of younger people. More than three in five under 45s are interested in the discounting event, with over a quarter planning to buy something. For any retailer targeting young consumers or young families, this confirms that the majority of their customers will be hunting for a bargain, and they ignore this segment at their peril.
Conversely, for retailers targeting older demographics, Black Friday promotions may be falling on deaf ears, with three quarters of over 55s either not interested or avoiding the event altogether.
Northern Ireland is the top regional hotspot interested in Black Friday/Cyber Monday, closely followed by those in London. Those least interested live in the East of England - 61% there say they are not interested. Then it’s the residents of the South West at 60%.
Our survey found that the average shopper intends to spend £234 over the Black Friday and Cyber Monday weekend - interestingly the same as last year.
High rollers here are men, who plan to spend £60 per head more than the average woman. Meanwhile 25-34s are the biggest spending age group, with a £278 planned spend per head, up by 17% over the last year. 18-24 year olds may be the most interested age group, but they have the lowest budgets and have been the most squeezed this year, with their planned spend falling 20% to £181.
So, why aren’t shoppers spending more this year? Almost three quarters of those planning to spend less this year say that it’s because they’re just being more cautious about their spending, with 44% also citing Brexit-driven concern.
The shoppers of the capital are planning to spend the most this Black Friday, with almost one in ten Londoners saying they’ll spend over £1,000 this year. By contrast, the most careful shoppers are from East Anglia and Wales, both regions where consumers say they’ll spend less this year.
We predicted last year that Black Friday was fast becoming the new Christmas for electricals retailers. This year is proving to be no different, with three in five of us saying that’s what we’ll be buying over the Black Friday period.
What’s changed this year is the surge in interest in adult clothing, with double the number of consumers saying they will be looking for fashion bargains over Black Friday. This tied in with a number of well-known high street fashion retailers participating in Black Friday discounting for the first time in 2017, including Next and Ted Baker.
With stocking fillers, toys and beauty making up the rest of the top 5 categories (while childrenswear, homewares and food & drink trail behind), Black Friday is fast becoming a more indulgent and self-gifting shopping period than the traditional Christmas shopping period for many of us.
This ties in with the trend we first identified last year of ‘practical gifting’ for Christmas itself, when consumers are more likely to prioritise food & drink, children’s clothing, etc. More about this trend in our forthcoming Christmas shopping survey.
Some retailers have historically resisted discounting on Black Friday for fear that it might cannibalise full price Christmas shopping purchases traditionally made in early December. Indeed our forthcoming Christmas shopping survey identifies a hard core of one in five consumers who buys most of their Christmas presents over the Black Friday period.
However, for many more consumers, and particularly for higher spending men, it’s just an excuse to buy something for ourselves. In total, almost two thirds of men and over three quarters of under 25s plan to buy something for themselves. And this is perhaps not surprising, given the disproportionate interest in technology and clothing, which are often bought for oneself rather than as gifts.
As if to underline this fact, 42% of shoppers in general, and 47% of men in particular, say they have a specific product in mind when going shopping over Black Friday, rather than buy on impulse: they want something for themselves, and they’re waiting for promotions to buy it.
By contrast, for female shoppers, family comes first, with over two thirds planning to buy for their families. And if you’re hoping for gifts from your friends, your best chance will be from 18-24 year olds, of whom almost half intend to spend on their friends.
Any television news crews hoping for a repeat of the Black Friday crowds queueing for bargains outside stores as they did in the past are likely to be disappointed. Only a quarter of all Black Friday spending is expected to take place in physical stores this year. So the queues and disappointment are seemingly more likely to take place online, as websites, apps, warehouses and delivery drivers take the strain once seen in stores.
Perhaps not surprisingly, those least likely to be spending on the High Street are the time pressured families, particularly 35-44 year olds, who expect less than a fifth of their Black Friday spending to be in physical stores. And it is this age group, rather than under 25s, who are most likely to spend on their mobile phones: over a third of 35-44 year olds’ spend overall will be via mobile, and a third of that mobile spend is expected to be through retailer apps rather than their general web browser.
So, who will be spending on the High Street? It looks set to be a meeting of young and old, with the highest proportions of in-store spending amongst under 25s and over 55s. However, even amongst over 65s, over 60% of their spending is expected to be online, albeit overwhelmingly via desktop or laptop, rather than by mobile.
Any retailers hoping that Black Friday would be a flash in the pan will be disappointed. While consumer interest in (and spending on) Black Friday appears to have plateaued, it has clearly become an important and much anticipated event for many people. As practical gifting makes Christmas more virtuous, Black Friday becomes our one chance for fun and frivolous spending, and to treat ourselves and our families.
For some categories, Black Friday is becoming more important than Christmas; most notably electricals, but also fashion, toys and beauty. While some retailers have announced that they will not be participating in any discounting over this period, they risk their customers walking (or clicking) straight past to their competitors.
But does Black Friday discounting have to be all bad news for retailer margins?
As you can see from our own survey of high street stores in the run up to Christmas, the pattern of promotional activity has altered dramatically in the last five years. Historically retailer promotions increased steadily from mid November onwards. But, in the past two years, we’ve seen retailers launch special promotions for the Black Friday period, before returning to full price and thus preserving margin in the key Christmas present buying period of early-to-mid December, and then discounting once again in the week before Christmas and into the Boxing Day and January sales.
Some retailers have also bought in product specifically for Black Friday. This is particularly true in electricals, where Black Friday has become a planned event just like Back to School or the January sales. They have been able to both stimulate volume and manage margin with the help of their suppliers, and avoided the margin-eroding blanket store-wide promotions of the past.
As Black Friday spreads to newer categories such as fashion, we expect these retailers will learn from early adopters, such as those in electricals. But not participating in Black Friday, and not planning ahead for a profitable outcome, will only be an option for the very bravest retailers in the future.