Black Friday was first widely adopted in 2013 and has quickly established itself as a firm fixture in the British retail calendar.
This year alone it’s expected to generate £5bn in sales.
But one downside that is too often overlooked is how the day undercuts the brand loyalty that retailers have worked so hard to build up over the rest of the year.
So why do retailers take part in Black Friday when it serves as a major distraction in the run-up to the crucial Christmas trading period?
Not only does the event place huge pressure on logistics and supply chains, but also impacts long-term loyalty by instead tempting consumers with short-term low prices.
This has prompted some to opt out of the day completely.
Even Asda, one of the early proponents of Black Friday, declared themselves out of the event in 2015, choosing instead to introduce a three-day price cut on fuel.
Sustainable options
While retailers will find it difficult to ignore Black Friday now that it is so entrenched, they should continue to look at alternative ways of engaging their customers in ways that are more sustainable in the longer term.
One way of doing so, that we predict we’ll see more of in the future, is by making discount days more brand-focused.
As we’ve already seen with the Amazon Prime Day or (to a lesser degree) Asda’s petrol price-cut, individual brands can reward their loyal customers with exclusive offers.
This can be a win-win situation: shoppers get the discounts they crave, while retailers benefit from increased brand loyalty from price-conscious consumers.
“The best strategy for retailers is always keeping the most loyal – and most profitable – customers happy”
As the popularity of events like Black Friday soar, bargain-conscious consumers seem to have become loyal to discount days themselves, rather than the retail brands they buy from.
Much of this stems back to the recession which forced consumers to become savvier with their spending habits.
Finding a balance
Black Friday’s timing and proximity to the festive period, when people are usually at their most stretched financially, has been one of the drivers in getting shoppers to part with their cash weeks earlier than they would usually do their Christmas shopping.
But the smartest retailers will find a balance between discount days – particularly if they can drive brand engagement as with Prime Day – and other ways to reward customers such as exclusive experiences, early access to offers and events and personalised rewards.
Amazon’s and Asda’s moves could be seen as an attempt to reinforce those brands rather than simply attracting customers with one-off low prices.
The best strategy for retailers is always keeping the most loyal – and most profitable – customers happy, rather than chasing the most price-sensitive shoppers whose loyalty will change as quickly as prices on discount day.
After all, customer loyalty should last a lifetime, not just a day.
- Phil Smith is vice president of sales and marketing at Ecrebo
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