What’s in store for Black Friday this year?

First popularised in the UK just five short years ago, Black Friday has firmly marked itself into the UK retail calendar. Last year, we found over three quarters of retailers offering promotions of some kind either in store or online, and the trend suggests that more will follow suit this year.

Black Friday has also become an increasingly important indicator for retailers’ sales performance over the whole Christmas period. Based on the resilience of consumer sentiment in our latest survey, we believe retail sales will hold up this year, despite less positive indicators for the wider economy. But, after lacklustre sales and footfall in October, Black Friday will be the first true test for retailers this peak trading season.

1. Love it or loathe it, more than half of us plan to shop this Black Friday…

There’s been much debate amongst retailers about whether to participate at all in Black Friday promotions. When it was first popularised in the UK, there were reports of crowds storming stores and websites crashing under the weight of traffic as shoppers rushed to bag the best deals. But some retailers were concerned that this cannibalised higher margin, full priced sales in the run up to Christmas.

While opinion is polarised between those who will and won’t look for deals, what is clear from consumers is that just over 50% are interested in Black Friday, and either intend to buy or would consider doing so if the price is right. This rises to 70% of under 25 year olds, and 65% of 25-34 year olds; in fact, almost one in three under 35s definitely intend to buy something. Only one in ten shoppers deliberately plan to avoid Black Friday, and most of these people are over 45.

Can retailers afford to ignore all these potential customers?

One unknown about Black Friday in 2017 is its timing on 24 November, the earliest it has fallen in recent years, and, for many consumers, before payday at the end of the month. Will that limit enthusiasm for retailer promotions over Black Friday weekend, or will retailers, as we expect, find a way of extending the sale into the following week?

How do you feel about Black Friday?

2. …and those of us who plan to shop, intend to spend more this year

How much did you-will you spend on Black Friday

Those 50% of shoppers who are planning to shop on Black Friday, whether on the high street or online, are also planning to spend more this year; from an average of £170 last year, to almost £200 this year. That could be worth over £5 billion in retail sales over that one weekend alone.

What’s interesting is that, while this amount didn’t vary much by age group, men told us that they planned to outspend women for the first time and by £50 each on average.

The regional variations were also stark, with Londoners the keenest to hit Black Friday sales, and the most spendthrift, at almost £300 per head. By comparison, while shoppers in the North of England are typically planning to spend just over £200 each, those in the Midlands and Wales are the least interested.

3. The big money will be spent online or by mobile

Retailers concerned about a repeat of the crowds of shoppers outside their stores on previous Black Fridays can rest easy. When we asked consumers where they’d be doing the lion’s share of their shopping, the answer was predominantly online, either by desktop/laptop or by mobile either through retailer websites or apps.

While we might have expected older shoppers to prefer shopping in store, even amongst over 65s, 60% of their Black Friday spend is expected to be done online. Conversely, while under 25s are unsurprisingly keener on using their mobile phones than desktops or laptops, they plan to do as much as a quarter of their spending in stores.

What proportion of your Black Friday spending will be through...

4. Black Friday shopping won’t affect Christmas shopping plans…

What do you intend to buy for over the Black Friday period?

If retailers’ key concern about Black Friday is that promotions will cannibalise full priced Christmas present purchases, that doesn’t seem to be the case. On average, those who said they would be shopping over Black Friday thought they’d only be doing 20% of their Christmas shopping over this period.

In fact, anyone hoping that an increase in Black Friday spending might mean they’ll receive more presents might be disappointed: 55% of women and 71% of men said that they would be buying things for themselves. Buying for themselves is traditionally what shoppers might have waited for the post-Christmas sales to do, but Black Friday seems to have eaten more into consumers’ Boxing Day sales spending, rather than their Christmas shopping.

While we’ve argued that that retailers are better prepared than ever for Black Friday, this trend presents a number of challenges, particularly around stock and working capital. Buy too little, and there won’t be enough left to take advantage of last minute shoppers paying full price; buy too much, and shoppers will already have bought everything they want for themselves, meaning deeper discounting will be required to clear stock in January.

5. …and electronics, clothing and stocking fillers are top of our shopping lists

So, if consumers plan to spend more money this Black Friday, spend more on themselves, and spend mainly online, what sorts of bargains are they hoping to bag?

By far and away the most popular Black Friday purchase is expected to be electronics and technology. Catching consumers’ enthusiasm for high-tech shopping over the Black Friday period will be particularly important this year, when consumers have already told us that they’ll be spending less on electronics and technology for Christmas itself. Not surprisingly then, the major electricals retailers were the first to kick off their Black Friday sales earlier this November.

And, to underline the fact that this retail event is about buying for oneself rather than buying for others, categories like children’s clothing and toys, which are much more important for Christmas itself, are not considered to be priorities for Black Friday.

What will you spend most on this Black Friday?

6. Retailers respond by turning Black Friday into Black Fortnight

What’s clear from our research is that, while Black Friday isn’t for all consumers, there’s a significant proportion of shoppers who are both interested and keen to spend. So it’s a brave retailer that does not have any promotions planned at all for this period.

Indeed, we believe that 2016 was a turning point for Black Friday in the UK. According to our own research on the high street and online (see chart), more retailers than ever participated in some form of promotional activity over the Black Friday period, but a third of these reverted to full price during the key early December trading period (the time when 46% of consumers say they will do their Christmas shopping).

Last year, we also saw more planned and targeted promotions – for example, on specially chosen products – rather than blanket storewide sales. And in more promotionally driven sectors, these were sustained over a whole week, rather than just the weekend of Black Friday and Cyber Monday.

Following the success of this strategy, this year looks likely to be the same: more noise from more retailers, but with products carefully selected to manage margin, rather than the blanket promotions of earlier years.

Given the benefits to retailers of a more prolonged promotional period to reduce pressure on logistics and stores, and to help clear excess stock from a weaker-than-expected October, we’re already seeing more of a ‘Black Fortnight’ with many retailers already offering promotions over a week before Black Friday.

Proportion of retailers on promotion

Contact us

Lisa Hooker
UK Leader of Industry for Retail & Consumer
Tel: +44 (0)7802 882562
Email

Kien Tan
Director, Retail Strategy
Tel: +44 (0) 20 721 23910
Email

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