Christmas Promotions: 2019

Should retailers prepare for a late shopping surge?

Retailers wising up to Christmas promotions, but will they hold their nerve?

This year’s Golden Quarter was always going to be tough for retailers. With consumer sentiment at its lowest Autumn figure for five years and a late Black Friday leaving fewer days between the Black Friday weekend and Christmas, customers were braced to tighten belts and reduce spending. The additional difficulties of three Brexit deadlines have encouraged retailer stockpiling throughout the year, the December election distracted consumers and poor weather in Autumn impacted footfall.

Retailers were going to struggle to tailor promotional calendars for this Golden Quarter, particularly with the need to balance polarised consumer interest in Black Friday. However, only the strongest of brands (or bravest of retailers) can avoid Black Friday or Christmas promotions entirely and wait for the Boxing Day sales. Retailers needed to embrace promotional activity but protect margins by returning to full price for the two critical weekends between Black Friday and Christmas.

So, how did they do?

Significant and successful promotions over Black Friday and Cyber Monday

The timing of Black Friday this year led to record sales online, impressive figures on the high street and increased footfall in shopping centres. 

Despite its late timing - and stock and trading challenges we described - most retailers were restrained in the run-up to Black Friday weekend. Many were not on promotion two weeks before, with only 29% of store retailers on promotion and 40% online. Promotions then ramped up at the start of the Black Friday week and peaked on the day (75% stores and 88% online).

Fashion retailers promoted more heavily than others, with 87% in-store (vs 75% average) and 91% online (vs 88% average). This likely reflected the need to dispose of high stock levels remaining from weaker Autumn trading.

Black Friday Weekend Highlights

Blanket promotions unexpectedly common over Black Friday

We saw many retailers offer “blanket promotions” (e.g. 25% off the whole store), particularly in fashion. These are margin-eroding and often a sign of wide overstocks or a rapid need for cash. With 56% of online fashion retailers offering blanket promotions, it shows the tough trading conditions they’ve endured this Autumn. Several fashion retailers have since gone on to announce profit warnings, showing that blanket promotions are not necessarily the answer to wider product and stock issues.

Retailers differentiate between in-store and online promotions

Black Friday shopping is more online than Christmas (77% vs 53%), so having promotions online is more important for retailers. We saw significantly more promotions online than in-store over the Black Friday weekend itself.

Notably, retailers were more restrained in-store this year, with some promoting online but not in stores. In fact, over the whole of November and December so far, 63% of retailers in our survey promoted for more weeks online than in their physical stores. This allowed true Black Friday bargain hunters to find a deal online but captured passing high-street shoppers at full price and full margin.

Learning from previous Black Friday promotions

This year, we saw retailers come off promotion rapidly after the Black Friday weekend, just as we recommended in our Black Friday and Cyber Monday research.

Almost half of retailers on promotion over Black Friday and Cyber Monday went back to full price the following week. With only 46% of online and 36% in-store on promotion from 9 December, many retailers were back to full price for the critical first full weekend of December when Christmas shopping properly began. These genuine, time-limited deals convinced consumers to purchase while they could and helped preserve retailers’ margins. Retailers have wised up from the early years of Black Friday, when they maintained promotions throughout early December, giving away margin at a time when many consumers would pay full price. 

We believe this “twin peaks” pattern of promotions is here to stay.

Looking ahead to Christmas

Despite a lull in promotional activity, retailers still have a lot of stock after a disappointing Autumn. This week will be a waiting game between retailers and shoppers as to whether that stock will be discounted before or after Christmas. As in previous years, we’re seeing the number of retailers on promotion starting to creep up after the restraint following the Black Friday weekend.

But will consumers spend?

With the election over, last weekend should have had fewer distractions for consumers. However, the unsettled weather would have put a dent into footfall for many high streets.

Promotional levels two weeks after Black Friday are almost identical to 2018, in-store (43% in both 2018 and 2019) and online (53% in 2018, 56% in 2019), and significantly lower than in previous years. With one less trading week before Christmas this year, retailers have less time to clear seasonal stock and will be under pressure to discount more widely this week.

With that in mind, we expect to see even higher promotional levels this weekend compared to previous years. We’re also expecting a bumper Boxing Day sale, with significant discounts for patient consumers. This is unusual compared to recent years when the pick of the bargains might have been snapped up before Christmas.

“We’re seeing retailers wise up in their promotional activity, particularly after Black Friday where a number went back to full price and introduced newness to entice shoppers, which has helped protect margins. It’ll be interesting to see whether retailers hold their nerve and remain at full price until the Boxing Day sales, although we are expecting more pre-Christmas promotions to creep in.”

Lisa Hooker, Leader of Industry for Consumer Markets, PwC UK

PwC Promotions Survey Methodology

  • Surveyed every Monday in November and December

  • Sample of 118 stores on Oxford Street and 167 retailers online, undertaken by PwC teams in London and Northern Ireland respectively

  • ‘Promotions’ defined as a discount off some or all products in the store, and advertised on the storefront or internet landing page

  • Excludes ‘everyday’ promotions such as student/club discounts, newsletter sign-up discount, free delivery, year-round clearance rail not advertised on storefront, etc

  • Also excludes email, newsletter, voucher code and member-only promotions

  • We have been tracking in-store promotions every Monday since 2010, predating Black Friday in the UK

  • We have been tracking online promotions by this methodology since 2016

  • This year, we have added an additional survey on Black Friday (Friday 29 November 2019)

  • For consistency, historical year-on-year comparisons for 'Black Friday' have been made using Cyber Monday (2 December 2019). In practice, there is little difference in promotional levels between Black Friday and Cyber Monday, although a small number of physical stores only promoted on Black Friday and not Cyber Monday

Contact us

Lisa Hooker

Lisa Hooker

Leader of Industry for Consumer Markets, PwC United Kingdom

Tel: +44 (0)7802 882562

Kien Tan

Kien Tan

Director, Retail Strategy, PwC United Kingdom

Tel: +44 (0)20 721 23910

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