By Dr Emma Gardner, Lecturer in Strategy and International Business, Department of Strategy and International Business
The retail industry has been struggling for some time, with online retailers such as Amazon often blamed for the struggles of the traditional high street. The American export of Black Friday, during which retailers offer discounted products in a post-Thanksgiving sale, puts these struggles into perspective, and highlights the evolving dynamics of the retail industry.
The day after Thanksgiving has long been a day of shopping in the US, with department store Macy’s being the first to advertise it as such in 1924. Only in more recent decades has it evolved into the retail event we now currently recognise it to be. On Black Friday 2018, a huge $6.2bn was spent at 80 of the US’s largest retailers, a promising figure for an industry that has witnessed more store closures than openings in recent years.
Similarly, in the UK, Black Friday promises a well-needed boost to sales. Since its introduction by Amazon in 2010, the UK has embraced Black Friday as shoppers seize the opportunity to purchase sale merchandise. However, the majority of Black Friday purchases are made online. In fact, online Black Friday sales reached £1.49bn last year, which reflects the ongoing growth of internet retail; as of October 2019, internet sales accounted for 19% of total retail sales in the UK.
Interestingly, Office for National Statistics (ONS) data demonstrates that the proportion of online sales as a percentage of total retail sales peaks each November, signalling the importance of Black Friday sales, and those made on the following Cyber Monday (which this year will take place on 2nd December), for UK retailers. The decline in sales in October could be attributed to consumers delaying purchases in the hope of Black Friday bargains.
The ease and accessibility of online shopping can go part way to explaining the impact of Black Friday. The ability to quickly compare offerings between different retailers means that this form of shopping dominates Black Friday, with PwC reporting that 77% of UK Black Friday transactions are completed online.
However, research by Which? has uncovered that Black Friday deals are not always as good as they seem. In fact, a notable 61% of the products they investigated were offered at the same or a lower price before the Black Friday period. You also don’t need to worry if you miss out on Black Friday, as Which? found that 95% of the products they researched were available to buy at the Black Friday price, or at a lower price, in the six months following Black Friday. Thus while there may be some bargains up for grabs, they may not always be as good as they seem.