We are in the final run-down to Christmas 2021. Black Friday deals are over and Cyber Monday deals have passed. Or have they? Looking at a broad selection of retailer websites, the term Black Friday Offers seems to have disappeared. Although one notable retailer did maintain Black Friday offers for a full week after the event…
In physical retail, it’s obvious that retail footfall and consumer demand has been lower than expected this year. Judging by the high volume of continuing offer messaging and ‘red tickets’ on display, should this be a concerning sight? Is it ok for a retailer to extend Black Friday offers to prompt consumer urgency and secure much needed sales?
Managing Black Friday Offers at store and head office level is a challenging objective. Aside from the legalities of price establishing a product to be able to quote an official saving, which is a complicated and highly regulated process. The biggest challenge is trying to estimate retail footfall on a store by store basis and match the volume of promotional stock to an approximate level of consumer demand. Get it right and you achieve 100% sell-out of planned promotions, get it wrong and you are left with a high volume of unsold stock in your stores.
Two of the UK’s biggest retailers decided to ‘opt-out’ of Black Friday offers this year (Next & M&S) due to the cost and complexity of sourcing and serving the offers – not to mention the hit on margin. This year, PWC projected an increase in Black Friday spending, with sales expected to hit £8.7 billion +11% on last year.
In reality. The results have been poor. It’s been reported that retail footfall in the month of November dropped 14.5% versus comparable 2019 levels – 15.8% in high streets, 22% in shopping centres and 3.6% in retail parks. Most concerningly, total retail footfall this year during Black Friday week, despite being up versus LY (86%) was actually down week on week (-11.9% to -19.3%), a concerning trend.
What’s caused the consumer switch off? Have they become jaded by Black Friday offers? Have recent concerns about the Omicron Covid variant quelled consumer appetite for physical retail? The next 3 weeks are crucial for the health and prosperity of physical retail stores. We predict further aggressive price offers, as retailers attempt to counteract a decline in footfall, by creating offers in store to clear stock, increase basket size and drive ATV.
What will retail learn from the Golden Quarter of 2021 and how will it influence plans for 2022? Could we see more retailers move away from Black Friday offers next year and instead deliver a more measured response, protecting margin in the run-up to Christmas. Will the importance of Black Friday in the retail calendar fade away and we see the traditional ‘big’ Boxing Day sales make a return? Consumers are in control of retail in many ways, how they shop and where they shop – will retailers take back control for the benefit of their bottom line?
Read our thoughts on the topic of The Golden Quarter 2021 in the link below.