Black Friday 2016 to be the biggest yet - but will it deliver on all its promises?
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Business |IN-DEPTH
London - Black Friday - the day which usually comes after Thanksgiving in the United States and sees retailers kick-off their promotional offers in the run up to Christmas - is either a hated or beloved event.
As awareness for the borrowed shopping event continues to grow, conflicting reports concerning the big day emerge from retail research firms, casting a cloud over the retailers big day. Some are predicting this year's Black Friday, which falls on November 25, to be the biggest yet, while other warn retailers to be aware of consumers jaded views on the discounting day. FashionUnited takes a closer look what has been forecast for the shopping bonanza.
Will Black Friday 2016 become the biggest shopping day to date?
Retail consultancy firm Salmon previously predicted that UK consumers would spend 5 billion pounds during the 'Black Fiveday' week, which runs from November 24 to 28, expecting the big day itself to bring in 2.55 billion pounds via mobile purchases alone. Although this amount pales in comparison to its Asian counterpart Singles Day, a shopping event launched by Chinese giant Alibaba which sold 17.8 billion dollars (14.2 billion pounds) worth of goods in 24 hours this year, it would still be a record sales amount within the UK.
"This year, we expect to see the greatest participation in Black Friday yet, kick-starting the Christmas-buying season"
However, e-commerce analysis firm IMRG foresees UK shoppers spending even more online during the Black Friday frenzy, predicting consumers to shell out 6.77 billion pounds on UK online retail sites from November 21 to November 28. 51 percent of the total transactions are also predicted to be made via mobile devices, a move which see Black Friday become the largest mobile shopping event in the country. IMRG also predicts a 16 percent increase in spend on retail sites on the main day itself, Black Friday, in comparison to last year, reaching a total of 1.27 billion pounds.
Additional research from Webloyalty, conducted by retail research agency and consulting firm Conlumino, foresees Black Friday spend rising modestly to 1.69 billion pounds, a 5.4 percent increase on last year. Verdict Retail expects this year's Black Friday to be the largest ever, with 62.8 percent of the 2,000 UK consumers surveyed using the shopping day as opportunity to treat themselves. What's more, more than a quarter of UK consumers plan on making a purchase this Black Friday or Cyber Monday, accordig to a recent survey from PwC, who predict to spend an average of 203 pounds.
Or will Black Friday fail to live up to both the retailers and consumers expecations?
But not every report is as positive about the future of Black Friday. "This year, we expect to see the greatest participation in Black Friday yet, kick-starting the Christmas-buying season," commented Zoe Mills, analyst at Verdict Retail. "However, the event’s future success is unknown, as consumers become more price sensitive and retailers struggle to drive incremental spend." A study from Periscope by McKinsey found that 48 percent of UK consumers have no plans what so ever to participate in Black Friday this year, with 42 percent perceiving the day as nothing more than a marketing trick.
"[Black Friday's] future success is unknown, as consumers become more price sensitive and retailers struggle to drive incremental spend"
Research from Webloyalty supports this viewpoint, with 60 percent of the 2,000 UK shoppers surveyed saying the shopping event fails to live up to the hype. What's more, 55 percent of the UK shoppers questioned said they felt Black Friday has become too commercialised and 61 percent said it was too busy and frantic. Only 16 percent of the shoppers questioned expected to get savings on Black Friday deals of 50 percent or more, compared to the 18 percent last year.
And it is not just UK shoppers who are less keen to enjoy Black Friday this year - research from LCP Consulting discovered that nearly two-thirds (61 percent) of the UK's leading retailers see the promotional shopping holiday as unprofitable and unsustainable, up from 32 percent in 2015, as it leads to additional operating costs and a erosive sales margin. "The Black Friday shopping craze has stormed the UK and up to this point had been growing year on year. Our research suggests a slight slowdown and this may be the inevitable fallout as consumer expectations settle down," commented Guy Chiswick, Managing Director of Webloyalty, Northern Europe.
"There have been a number of stories in the media of dissatisfied customers, queues and tussles in store and it is therefore unsurprising that nearly a third of those interviewed don’t think they will get value for money by bringing their purchases forward," he added. "Against this backdrop, it is vital that retailers who are hoping to capitalise on Black Friday and drive footfall communicate clearly with consumers that there are real bargains to be found."
"In addition, retailers need to have a robust sales strategy in place for the whole Christmas shopping period as it seems likely that this year consumers will spread their spending much more evenly."
Homepage photo: Oxford Street, FashionUnited
Photo 1 & 2: Flickr, by m01229 and Diariocritico de Venezuela