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EDITORIAL Black Friday predictions show how retail may look in 2023

With Black Friday almost upon us – well, officially… for many its been running for days now – retailers are keenly watching what shoppers are doing, not just to see how their fortunes may fare across the Peak weekend, but also to get an insight into what might lie ahead beyond Christmas.

Current predictions, while far from uniform, suggest that as might be expected spending will be down, across Black Friday, but with shoppers looking for bargains and value for money, it may not be as suppressed as most feared.

Estimates vary, but it seems that more people are set to shop this Black Friday than did last year, 54% versus 42% in one study. However, there may be more people shopping, as many as three quarters say that they will be spending less this year and buying fewer goods. 

This comes as no surprise, given the economic environment. What is more interesting is their shopping behaviour itself, however. This not only marks out how Black Friday will play out, but offers a good insight into how shoppers will be behaving for the rest of Christmas, how the January sales will go and even what the first chunk of 2023 might look like.

Currently, shoppers are in bargain hunting mode. According to YouGov/Publicis Sapient, 60% of consumers shop with an item in mind, and 85% only purchase items they know they want or need. It also suggests that most consumers (78%) are researching specific deals and retailers (67%) before they go shopping, compared to only 58% that said the same last year. 

Footfall figure attest that digital is still a force to be reckoned with. UK high street footfall plummeted 28% in October from the previous month. Footfall on Oxford Street in London suffered an even more dramatic decline, down 37% in the same period.

However, this is  likely driven by an overall decline in shopping, rather than just turning away from the High Street. Shoppers are becoming more omnichannel, which is going to be played out in spades across Black Friday.

On average, consumers say they’ll do half of their shopping online (53%) and half of their shopping in-store (47%), according to YouGov/Publicis Sapient. However, data from GWI suggest that 69% are looking for an omnichannel experience this Black Friday, with plans to shop both in physical stores and online to some extent – typically researching in one channel and buying in another.

This change in behaviour has already impacted retailers even before the build up to Black Friday began. 

Pets At Home, for example, seeing omnichannel revenues growing at an impressive 16.2% and now making up 16.5% of group revenues. It has invested heavily in tech, specifically to bridge the physical-digital divide and it seems to be paying off. Pets At Home reported total group revenue growth of 7.3% to £727.2m, with the final period of H1 its strongest to date.

Conversely, Halfords, which has relied on physical retail has seen sales grow 31%, but profits are slowly falling and the company warns of more headwinds ahead.

But this is ‘old’ data. This shows us what was happening. A lot has changed since the end of September and a lot more is set to change across November and December. We’ll soon know what Christmas might looking like, but first we have to get through the Peak weekend. Good luck everyone.

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