Q4 2020 will see one of the longest and most competitive periods of discounting that British retail has ever experienced, with more deals over a longer period, vying for a share of decreasing consumer spending.
Whilst the period will get longer, the spending will be less as the impact of Covid-19 on consumers’ wallets looms large. The Black Friday period has been forecast to shrink by nearly a quarter (22%) this year, based on research by eCommerce consultancy Wunderman Thompson Commerce, yet online spending is set to surge. Overall spend during the Black Friday period is predicted to reach £5.5 billion.
With the pandemic shifting back Amazon’s Prime Day to next Tuesday 13th October, the next 10 weeks will see the biggest sales periods squeezed together like never before, as consumers look ahead to Prime Day, Black Friday and Christmas in the space of just under three months.
And after nearly six months in and out of lockdown, eCommerce businesses are best placed to capitalise on this extended shopping period. The “Welcome to the Mega Peak” report, which surveyed over 2,500 consumers in the UK, shows over two thirds (67%) of Black Friday shopping will be done online, equating to a possible £3.7bn in overall online spend.
With nearly a quarter (24%) scared to go in-store today, this is likely to impact the high street (despite the percentage falling from 48% in July this year) while bolstering the online arm of many brands and retailers. However, the pandemic isn’t the only concern: a fifth (20%) of consumers say they will spend less during Black Friday due to concerns over Brexit.
Once again, it’s likely that the digitally native retailers will profit most; as Amazon kicks off this busy peak season with Prime Day, the company looks set to take an even bigger share of the pie for the rest of 2020. On Black Friday in particular, 65% of spend will be via Amazon, up from 62% last year. A further quarter say their spending with the eCommerce giant will increase over the Black Friday period because of its performance during lockdown.
Hugh Fletcher, Global Head of Consultancy and Innovation at Wunderman Thompson Commerce, explains: “Against the backdrop of Covid-19, Brexit and an uncertain economy, 2020 looks set to remain tough for many consumers, despite the appearance of this new and elongated discounting peak. While consumers may not have as much disposable income as they did last year, what they do have, they are more likely to spend online – and could well see a record for the biggest digital spend on Black Friday ever. For businesses, this means that there has never been a more important time to get their online offering right.
“It’s also probable that Amazon, though deeply secretive about its sales performances during peak, will end up ‘owning’ Q4 – applying more pressure to those smaller businesses it is both competing against and looking to work in cooperation with. It’s important, therefore, for brands and retailers to ensure they have a balanced eCommerce approach: optimising both their own websites and social media, creating links with retailers looking to sell their products and increasing their visibility across all the important marketplaces. In one of the strangest years in online retail, businesses can ill afford to neglect this mega peak: it could be their busiest period ever.”
So, with all that in mind, how can you meet the challenges of Prime Day first and foremost and set yourself up to reap the rewards of the peak period that looms large ahead of us?
We spoke to Sara Skirboll, Shopping & Trends Expert at RetailMeNot, who has outlined her three tips for meeting the challenges that lie ahead. Here is what she said.
We can safely assume that Amazon will slash prices on its own devices and brands, such as Echo, Alexa, Kindles, Fire tablets, Amazon Newsstand and Prime Video Channels. We also wouldn’t be surprised to see sales on the Cloud Cam and Blink.
According to Amazon, the most-purchased items on 2019 Prime Day were the Instant Pot DUO60, the 23andMe DNA Test Kit, Crest 3D White Professional Effects Whitestrips Kits and LifeStraw personal water filters.
Certain categories consistently see discounts during Prime Day, so with that in mind, below are the items we’re placing bargain bets on:
Amazon Prime Day is expected to be the No. 1 shopping day in Q4, with 67% of people planning to make a purchase during the savings event this year.
The full ranking of the most popular shopping days this holiday is, in order:
According to our research, retailers are significantly more likely than they were in 2019 (46% vs. 38%) to say they will offer their deepest discounts during Amazon Prime Day rather than Black Friday/Cyber Monday weekend this year.
As a result of fulfilment and shipping related issues many consumers experienced during the pandemic, they’re planning to start their holiday shopping earlier this year. Prime Day, Cash Back Day and other early holiday sales give shoppers a great opportunity to find deals on the items they want without having to worry about whether it will arrive on time or sell out.
While there’s a possibility Black Friday will offer a slightly better deal on certain items, for many shoppers the security of knowing they got the items they needed (and still at a great price) is worth the extra spend.”
Remember, Amazon isn’t the only one offering deals on Prime Day. Yes, Prime Day is an Amazon-exclusive event, but competitors are eager to tap into the wallets of shoppers who are already online that day looking to spend. Last year, RetailMeNot noted 200 retailers getting in on the Prime Day action.
So far this year, Target has already announced a “Deal Days” event, which will take place on—you guessed it—October 13 and 14. And Walmart is hosting the “Big Save,” with Black Friday levels of savings on thousands of items starting October 11 through October 15.