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Starting already? How the shape of Black Friday and pre-Christmas spending may be changing

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The latest predictions suggest almost £5bn will be spent on retail goods during the course of Black Friday in the UK. But the effect of peak spending may be already being felt in lower September ecommerce sales, suggests the IMRG. We consider the evidence.

Black Friday spending forecasts

Almost £5bn is expected to change hands on Black Friday – which this year falls on November 23. Close to half of that will be spent online, according to ecommerce agency Salmon. Its analysis included a survey of 2,000 UK consumers and it predicts Black Friday spending will come in at £4.75bn, with £2.23bn – or 47% of the total – spent through ecommerce. 

The average Black Friday spend is set to come in at £90, although those aged between 25 and 34 are set to spend more, at £154. Men are expected to spend 34% more than woman, on average, and women are more likely to shop online – at 49%, compared to 46% among men.

James Webster, head of managed services and peak trading expert at Salmon. “Black Friday is now a highlight in many consumers’ calendars – but in an increasingly online and competitive retail world, it’s not only the deal that gets consumers through the door – it’s the experience and service they receive through the entire sales process.”

He added: “With record online sales last year and a continued shift to mobile, it’s important for ecommerce companies of all types to ensure they’re offering a sophisticated yet easy customer experience that spans all channels and platforms.”

The Christmas shopping season is starting still earlier

There’s already evidence of discounting well ahead of Black Friday, according to the latest IMRG-Capgemini eRetail Sales Index for September 2018. It suggests that the lowest September ecommerce growth rate since 2014 – at 7.5% – may be related to conversion rates depressed by the knowledge of upcoming discounting. Andy Mulcahy, strategy and insight director at IMRG, said: “Several retailers have spoken publicly about the scale of discounting that has been active across various retail sites, meaning that the industry is already heavily involved in discounting before we even get near to Black Friday. The conversion rate was markedly down in September; could it possibly be that people are already browsing for ideas, in the knowledge that Black Friday will inevitably bring heavier discounts?” 

Overall, said the IMRG report, third quarter online retail sales grew by 10.1% – down from the second quarter, when the World Cup and spending boosted online sales to 17.1%. The report also found that smartphone sales grew by 16.1% in September – less than the 55.8% recorded last September, and suggesting an increasingly mature market. Sales via tablets, meanwhile, seem to have peaked: they fell by 22.5%, contrasting with growth of 8.1% last September.

Forrester’s Online Holiday Retail Sales Forecast, 2018 (Western Europe) forecasts ecommerce sales in Western Europe reaching €61.49bn (£53.97bn) in November and December 2018. That’s 12.1% ahead of the same time last year, when sales of £54.85bn (£48.1bn) were 12.6% up on the previous year. It sees evidence that retailers such as Marks & Spencer are turning their back on specific Black Friday or Cyber Monday holiday dates because they are unprofitable and unsustainable. Rather, they offer deals and discounts throughout the holiday season. Across Europe, it says one of the most popular promotional events in 2017 was the day before Black Friday, while in the UK, online transaction volumes increased by 11% in the week leading up to Black Friday as traders cut prices early. 

Managing peak sales

It’s important for retailers to manage closely the product lines and categories that go on sale on Black Friday and Cyber Monday, says the Forrester report, if the events are to be profitable, while also minimising the risk of on-the-day stock outages and margin erosions.

Salmon’s Webster also has a warning. “The Black Friday steam train looks set to pick up even more speed this year, with many consumers even looking to do their Christmas shopping during the November sales period. It’s all well and good for retailers to start their Black Friday deals early, but if they don’t have the proper peak operations system in place to cope with demand, they’ll likely be left in the wake of bigger fish like Amazon, who have historically focused heavily on the Black Friday sales period.”

Salmon’s findings accompany its Black Friday 2018 Playbook.

Image: Fotolia

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