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Was Black Friday 2016 everything retailers hoped for?

By Vivian Hendriksz


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Business |IN-DEPTH

London - Now that the dust has begun to settle following Black Fiveday, the 5 day discounting frenzy starting just before Black Friday, November 25 and ending November 28 with Cyber Monday, FashionUnited takes a moment to reflect on whether the borrowed US holiday has managed to deliver on all its promises.

Fashion retailers ranging from Asos to Mango and Zara all offered discounts and special offers during Black Friday, as early figures show that Britons appeared to have spent 4 percent more money nabbing Black Friday deals this year than last year. However the shopping phenomenon failed to become the big online shopping event analysts predicted, as even though the majority of spending took place online, Black Friday failed to lead to the double-digit increase in online sales that IMRG previously predicted.

Online sales fail to reach analysts predictions during Black Friday 2016

Online sales are said to have only grown 6.7 percent this Black Friday against last year's discounting day, according to data from Springboard and PCA Predict. This is a rather disappointing result against the previously forecast increase of 25 percent and the 31 percent growth in online sales reported in 2015. Across the Black Friday Weekend, online sales increased a mere 2.3 percent, indicating that consumer interest in the discounting day seems to have peaked, notes Springboard.

On the other hand, visitor footfall increased 2 percent during Black Friday this year, with footfall on the UK's high street up 2.8 percent. This shift in shoppers visiting brick and mortar stores comes as Springboard previously predicted footfall would drop by as much as 5 percent this Black Friday. Footfall at retail parks was up 0.8 percent and footfall at shopping centres was up 1.4 percent this year compared to the same day in 2015.

“The results from Black Friday itself were very surprising,” said Diane Wehrle, insights director at Springboard. “Highlighting the fact that Black Friday is still an evolving shopping day in the UK.”

The day after Black Friday, Saturday November 26, revealed a small dip in footfall across the UK's shopping areas which was down 0.8 percent compared with the same day last year. Across the weekend however, footfall across the UK as a whole declined marginally, down 0.5 percent. The high street was the main shopping destination to report an increase in footfall across the weekend, up 1.4 percent this Black Friday weekend compared to last year.

Retail analysts previously predicted UK consumers would spend a record amount of 2 billion pounds during Black Friday alone, with the majority of it, 1.1 billion pounds being spent online. At the moment, it remains unclear if shoppers have broken this record as some retailers still have to publish their results. Department store group John Lewis reported strong online sales on Black Friday, but did disclose exact sales results for the event.

However, data from Barclaycard, which processes close to half of the UK's card transactions, reported total spend for Black Friday 2016 was up 4 percent on last year by 5 pm, with the number of transaction increasing 6 percent. However this figure includes all payments made on November 25, not those just made at retailers.

The lack of mayhem on the UK's high streets and shopping centres could be a strong indicator that this year's Black Friday was not as big as predicted, which can be linked to a number of factors. For example, a number of retailers chose to offer discounts in the run up to Black Friday, such Amazon UK, which offered 12 days of promotional offers before the big day itself, and Tesco's, who kicked off its Black Friday event with deals on November 21.

By the time the big day came around, many shoppers could have already scored the bargain they were looking for. On the other hand, other key retailers, such as Next, Asda, and Ikea did not participate in Black Friday this year, which could have led to a thinner offer of promotions than customers are used. Data from Edited revealed UK retailers were in fact pulling back on Black Friday by reducing the number of discounted products by 9.5 percent for first time.

Other initiatives launched by Patagonia, Berghaus and Greenpeace also suggests that retail and consumer appetite for extreme discounting is waning. However, despite that UK market still witnessed a 0.4 percent increase in the number of products which sold out across the holiday, most likely driven by the fact most products were already discounted by Thursday, November 24. Online product sell outs peaked on the Saturday after Black Friday.

"The concept of ‘Black Friday' and ‘Cyber Monday’ being the best days for discounts is officially gone - today, they refer to a near week-long incremental discounting event," commented Katie Smith, Senior Retail and Fashion Analyst at Edited. "Following a lackluster retail season thanks in part to uncertainty around the US election, retailers took an aggressive discounting approach to make up for sluggish sales."

"However, the danger of Black Friday and Cyber Monday seeping into a longer timeframe is that ongoing discounting will discredit the full price on retailers' wares, leading to discount fatigue and an even greater reluctance by consumers to pay anything but the biggest price drop."

Photos: Pexel

Black Friday