Did Black Friday Deliver The Goods For Customers?

Black Friday

There’s been very mixed views about the experience of retailers following Black Friday last year, with retailers such as John Lewis speaking up to say they don’t feel it was good for business. To some extent, the retail landscape will always be dictated by the market itself and some would argue that if the consumers are demanding Black Friday, who are the retailers to refuse?

That said, retailers must take stock of the events and issues that surrounded the Black Friday event here in the UK and make decisions as to how to approach this to ensure that both the retailer and the customer benefit from such an initiative. Let’s first consider some of facts and figures surrounding Black Friday, a concept first introduced to the UK by Amazon in 2010, but only really widely adopted by major online and high street retailers in 2014.

According to Econsultancy.com, in 2013 UK Spend jumped 44% between Thursday to Black Friday, however in 2014 it jumped 144%. However, after retailers like John Lewis and Argos promoted Black Friday sales their sites were unable to cope with the level of traffic and crashed. On Black Friday UK shoppers spent £810 million and 404,835 orders were made online. This surpassed the estimated £555 million shoppers were expected to spend. Amazon sales were up 63% and eBay sales up 84% from 2013 which shows that Black Friday helped to increase UK sales.

Barclay Card reported a four-fold increase in electronics spending as consumers rushed to purchase discounted electrical products. Furthermore, Barclay card also announced that their customers had spent 18% more in 2014 than 2013. Retail Intelligence Experts said that the number of shoppers in the high street, shopping centres and retail parks would leap by 10% and footfall was expected to increase with the growth in popularity of ‘click and collect’ purchasing. They also predicted that footfall would spike +9.3% on Black Friday and +3.2% on Cyber Monday.

However, it’s not all such ‘good’ news. Prof Chris Edger warned that retailers were offering customers discounts which would suck out any profit from the November margin and profitability in the long term would inevitability fall. Marks & Spencer and other retailers faced unprecedented online sales and struggled to meet the demands of customers. Prior to Christmas, some deliveries faced delays of up to 2 weeks. Customers fought over discounted goods as seen on the news and websites such as John Lewis, Argos and many more crashed due to unprecedented internet traffic.

So what was the true outcome for UK retailers?

I think it’s fair to say that the majority of retailers who benefitted from Black Friday were probably those operating in the online space, despite facing issues with fulfilling deliveries. On the High Street, however I think it is likely to have been a far different story.

A surge of customers over such a short period of time, the reported fights and brawls in some stores, the strain on IT systems and customers and the natural lull in footfall following such a spike makes me think very few high street retailers would say that the promotion made a significant long term improvement to their overall trading performance. We are yet to see the figures for the New Year, but it will be interesting to see how retail sales and footfall in January 2015 fares compared to 2014 and whether any links will be made to Black Friday.

I guess the burning questions is will UK retailers partake in Black Friday 2015? Yes, the majority probably will, due to customer demand. However, I think we may well see a different approach next time around as retailers look to retain more control over their stores, systems and of course, better manage their customers expectations.

Alan Watson

Following a recent management buyout, Alan Watson is the managing director and majority shareholder of Barron McCann. Having worked within Barron McCann for over 20 years, Alan always prefers to describe himself as one of the ‘plumbers’, due to his technical background. But it is precisely this experience that ensures that Alan is always looking at the development of Barron McCann as a company from the perspective of the customer and the problems that he can address and solve. His aspirations for the future of the company place it very firmly at the forefront of retail evolution. Alan is driving forward an exciting and ambitious plan of expansion and acquisition that will continue to position Barron McCann as one of the leading IT support providers in the industry.