Black Friday was a damp squib last year.

According to the BRC-KPMG Retail Sales Monitor, like-for-like sales dipped 0.5% last November compared to the year beforehand.

Black Friday is now viewed as an increasingly digital event. The BRC said one in every three pounds spent last November was spent online, an all-time high.

However, even online sales were a let-down. Sales rose 6.8% over Black Friday, according to IMRG, however, the trade body had expected it to be “in the mid-teens”, according to its director of data and retail Matthew Walsh.

Despite the lukewarm Black Friday last year, retailers are still committed to the discounting event.

Shop Direct boss Henry Birch told Retail Week: “Black Friday is important to us; it is also profitable for us and an important time of year for us in terms of existing valued customers and new customers.

“We will be sustaining a similar level of activity compared to last year. Black Friday will remain a very important time of year for us.”

Practicology senior consultant Joanne Phan believes online is likely to be the growth channel again this year: “Last year’s results showed that spend was down in retail stores and consumers were more inclined to search online. Consumers were able to purchase their goods online immediately rather than wait until stores are open. There may not necessarily be growth overall but online sales will likely grow slightly.”

‘Blackvember’

Despite fears over the margin damage that Black Friday creates, IMRG data shows that more retailers partook in the discounting extravaganza last year. 

A big finding from IMRG is that Black Friday events started earlier in 2018 than in previous years. In fact, Walsh termed the event “Blackvember” as some retailers began their promotions at the start of the month.

However, it was the Monday of Black Friday week when promotions really took off, with more than 100 of the 260 sample retailers analysed by IMRG offering deals then, which steadily rose throughout the week, peaking at 214 on the day itself.

The earlier launch of Black Friday did not alter spending patterns. IMRG strategy and insight director Andy Mulcahy says 35% of the spend made in November fell in Black Friday week, exactly the same as the previous year.

However, retailers risk losing out to rivals if they hold off starting the gun on promotions.

Phan warns: “If you are planning to hold off until Black Friday be prepared that you may have to launch promotions earlier if competitor activity is more aggressive. Ensuring your fulfilment set-up is ready to launch early is particularly important. At the same time, retailers are also stretching their promotions out beyond Black Friday weekend, and even to the following weekend.”

Mulcahy believes that Monday, November 25 will be the optimum time to launch promotions this year, however, he predicts we will see discounting throughout the month again this year.

“From July onwards the market has been very promotional. It’s likely that this will continue through November now,” he says.

However, Mulcahy recommends that retailers segment their customers and offer VIP customers early access to Black Friday sales.

Level of discount

The level of discount offered by retailers last year “intensified”, according to Mulcahy, to the point that the most common discount offered on the big day was a whopping 50% to 59%.

Mulcahy predicts the percentage of discount offered might “creep up” a bit this year as retailers strive to get noticed in a sea of discounts across the high street.

Asos is a case in point. Last year, the online fashion retailer was forced to trigger a profit warning after Black Friday.

The etailer offered customers 20% off everything but chief executive Nick Beighton admitted this discount had not stood out compared to some rivals.

“The benefit of Black Friday is that it is a very rich moment to attract customers, but clearly the level of discounting now in place on Black Friday makes [our approach] worth reconsidering,” Beighton said last year.

Despite the pressure to up discount levels to be noticed, Mulcahy points out that six retailers it monitored opted out of Black Friday last year – and recorded positive growth year on year.

This demonstrates that people are in a shopping mindset and some businesses will benefit regardless of the level of discount offered.

However, Mulcahy says some form of offer might be necessary to entice shoppers to spend, such as ‘3 for 2’ promotions or free delivery.

Phan suggests using “member-only discounts” rather than giving discounts to everyone and making some promotions available only to loyal customers.

She says: “It’s easy to give a percentage-off discount, but also be creative in the type of discount. For example, buy one, get one free; free X with Y; spend X and save Y. These promotions will promote high average order value.”

Which sectors performed well?

Home and garden and electricals fared the best over the Black Friday period.

Scenes of shoppers fighting over cut-price tellies mean most people link Black Friday with electricals.

However, there is an argument that electricals retailers have become too dependent on the promotional event.

Black Friday is the big peak for electricals retailers with spend across the year relatively flat.

Mulcahy points out that other categories, like clothing, have several other large spikes throughout the year from summer Sales or new ranges.

He says: “Essentially Black Friday has condensed the big revenue opportunity for electricals into one single month when discounting is high – people have been trained to buy high-value electricals during the discount month of November.”

Mulcahy says the signs are not positive for electricals retailers this Black Friday as online sales in the category have declined over the past three years and are down 22% in the year to the end of August, according to its data (though it must be noted the IMRG data does not include sales from Amazon).

Gifts and health and beauty were the worst-performing sectors. Mulcahy expects that trend to be reversed in beauty this year as the sector has performed strongly in the year to date.

Superdrug commercial director Simon Comins says it has more than 100 deals going live in-store and online across Black Friday, which he says makes 2019 “the biggest ever year of savings for our customers”.

The health and beauty retailer will launch deals exclusively to its Health and Beautycard members from Wednesday, November 13 to Tuesday, November 26, before widening offers to all customers.

Marketing

The fact that Black Friday has become an increasingly digital event means that email marketing has reached fever pitch. IMRG data shows that 19% more emails were sent by retailers in 2018 than 2017, with 38% more emails sent on the day itself.

Walsh says IMRG’s sample 260 retailers sent 1,419 Black Friday-related emails throughout November, with 207 sent on Black Friday itself (one retailer sent six emails that day).

To stand out in the sea of discounts, some retailers tried new tactics last year with gamification, such as ‘spin to win’ and lucky dip discounts, being used.

However, Mulcahy questions how effective these methods are. “Retailers have to accept that email marketing is what they have to do. How can you stand out in an inbox with countless emails? You can say something in your subject line that sets you apart. Alternatively, just be blunt and announce that your Black Friday Sale is now on.”

Phan acknowledges that many retailers will increase the frequency of emails during Black Friday but believes that providing new messaging for each email is critical and advises stating a date and time for when the promotion will end to create a sense of urgency.

Post payday boost?

The timing of Black Friday last year did not help retailers. The day fell on November 23, before pay day. This year’s timing on November 29 falls after payday and Mulcahy says it could stimulate more spending.

He also suggests Cyber Monday being in December might spur shoppers to make more Christmas purchases. 

However, he says other factors at play, such as depressed consumer spending and political uncertainty, may negate these positives, meaning Black Friday 2019 will be far from a vintage year for retail.