Comment: How sustainable is Black Friday as a retail event?

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Black Friday is a big date in the retail calendar. But as sales start earlier and discounting becomes normal will sales fatigue kick in?

Black Friday—the Friday after Thanksgiving, which falls on November 28th—marks the traditional start of the Christmas shopping season. Over the last decade Black Friday has extended into a weekend-long event. Even the return to work on Cyber Monday has become a key date for online shopping. These dates have also crossed the Atlantic. Thanksgiving is not celebrated in Europe but austerity hit consumers on this side of the pond are no strangers to bargain hunting, and global e-commerce firms such as Amazon have supplied a global angle.

There will no doubt be new records set this year. Pre-Black Friday sales are up 18.7% according to IBM Analytics. Meanwhile the Adobe Digital Index (ADI)—which claims to have estimated sales last year to within a margin of 1%—predicts that sales from Black Friday to Cyber Monday will reach US$6.43bn, with US$1.6bn of transactions taking place on mobile devices. However, despite the fanfare, Black Friday may be losing some of its lustre.

No longer best in show

First of all, Black Friday and Cyber Monday are no longer the biggest shopping dates on the retail calendar. Last year Singles Day overtook Cyber Monday as the biggest online shopping date in the world, with Chinese online consumers comfortably outspending their US counterparts. This year Singles Day powered further away. Alibaba, whose marketplaces provide the bulk of Singles Day sales, reported transactions of over US$9bn in a 24-hour period on November 11th. This is almost 50% higher than ADI’s prediction for the upcoming holiday weekend and more than three times the US$2.9bn sales total reported by comScore for Black Monday and Cyber Monday last year.

Another factor is that sales fatigue could begin to undermine specific sales dates. WalMart began its current Black Friday sale as early as Halloween, while Amazon has been building up to Black Friday with hourly promotions on both sides of the Atlantic for some time. There are other online shopping dates too. The UK has traditionally had Mega Monday usually a week after Cyber Monday, in which consumers go online to ensure presents arrive before Christmas.

This comes against a backdrop of falling prices generally. Kantar recently reported that the value of sales in the UK grocery market had shrunk for the first time in the 20 years it had been reporting it. Meanwhile the ONS continued to report rising volumes, meaning that discounting and price wars were responsible for the decline. Price cuts and roll backs mean that consumers are not saving their pennies for specific dates, but are increasingly rolling, almost punch drunk, from one sale to the next.

Sales fatigue?

Even as records tumble for Black Friday and Cyber Monday there are question marks over how sustainable this will be in future years. The dates will continue to be crucial, given the window of opportunity they provide for Christmas gift-buying, but it seems unlikely that sales or discounts will hold the same shine forever. More likely is the possibility that consumers will become desensitised to sales and discounts. Modern consumers can now find bargains as and when they need them, rather than waiting for specific dates to do so. For the canniest online shoppers, sales discounts from mainstream retailers will struggle to compete with standard prices from an online marketplace seller from Hong Kong, and queuing up outside a shop is less appealing than smartphone browsing on the daily commute. Sometimes sales also have stigma attached, and retailers who announce discounts are more likely to be perceived as struggling financially than replenishing stock or engaging in a time-honoured tradition.

The UK’s January sales have experienced a similar backwards creep, edging forward to Boxing Day and then to online sales on Christmas Day itself. The last few years have seen some retailers bring sales forward to December. If this creep reaches November then we could see a continuous sales season from Halloween through ‘til January. By this stage, however, consumers may barely notice. They will be well accustomed to getting what they want, when they want it, at the cheapest price possible.