With 19 days of postal strikes likely to cause disruption to Black Friday sales, it would appear that everything is looking a bit shaky for peak season – at a time when it really needs to go well. But perhaps the festival of discounting may not be all it’s cracked up to be.
On the face of it, there is an overwhelming case for discounting in the run up to Christmas: it attracts shoppers in, you shift more stock and there is a pretty good chance that while they are there bargain hunting they will buy something else. This is what underpins Black Friday.
In a normal year.
But we aren’t in a normal place right now. The economy is in turmoil and the uncertainty that precipitates from that is already seeing shoppers reigning in their spending. More worryingly, they are pledging that they are not going to splurge this Christmas.
News that consumers are going to look for bargains this year – in fact they have already started – should be good news for Black Friday. It should mean that shoppers are bargain-ready and retailers can sate that with all those Black Friday offers.
However, research shows that currently almost a quarter of all things for sale online globally are being discounted – before Black Friday and as an attempt to drive sales as shoppers tighten their belts and wait to see what happens in the world.
This presents a problem for retailers: if they are already heavily discounting the stock they can discount, what are they going to do across Black Friday and in the run up to Christmas? Do retailers have to discount more? Do they have to add more inventory to the discounting? How is that going to help them?
According to experts, retailers may not be able to actually afford Black Friday this year. Having discounted already, there is no wiggle room for more – they simply won’t see the sales to justify it.
With costs rising – energy, staff, wholesale, distribution and staffing to name but a few – retailers are already being squeezed. Dropping prices on more items and by larger amounts in the coming months will reach a point where margin evaporates.
But there are strategies that retailers are starting to adopt. Rental, resale and subscriptions are growing – especially in fashion – with five of the top six winners of eBay’s Business Awards being resales based, sustainable models.
Others are turning to everything from using marketplaces to leveraging new forms of payments to cut costs, find new customers and expand and grow. Tapping into all this – and more – is going to be more vital than ever in the months ahead.
One place to get the inside track on how all this can be leveraged by smaller retailers is at the first ChannelX World takes place on October 13 in London. It offers retailers, brands and marketplaces a timely chance to explore the vital new channels that customers today want to buy through – from marketplaces, to social media and, looking to the future, the metaverse.
Speakers hail from an array of brands including M&S, LK Bennett, Amazon, Debenhams, Boohoo, eBay, TikTok and many more. Click here to find out more and to register for the event.