The real cost of Black Friday discounting
26 Nov 2018
As the craze for bargains and discounted fashion drove people to the high street on the Black Friday weekend, there is a dark cloud above the rails hanging full of tantalising deals. The reality is that brands and businesses are not offering cheaper items for the good of mankind, they are sitting on excess stock that needs to be shifted. Which, if remained unsold, would eat away at profits at the end of the financial year.
At the same time, companies are producing extra goods to cope with consumer demand, stretching their supply chains to produce more, more more, knowing shoppers are easily persuaded to complete the purchase funnel when prompted with discounting. Taking a smaller margin but selling higher volumes is a very lucrative business model.
Many shoppers, in turn, are blindly buying, lured by the promise of a bargain, but will be returning unwanted items to retailers in nearly as high a volume. With online orders sharply increasing, so do returns, which have been estimated by returns management platform ReBound to cost 362 million pounds in the UK.
Environmental impact of online shopping
We all love receiving a parcel from an online purchase, but online shopping comes at a cost. How often do you ask yourself how the package got to your doorstep, and at what impact? In America, the US Postal Service anticipates making 850 million deliveries between Thanksgiving and New Year’s Day, accounting for approximately 15 percent of the entire year’s shipments in the space of six weeks. The carbon footprint of transportation emits the highest number of emissions in comparison to any other industry. There are no green trucks or zero emission vehicles delivering the packages from your online purchases.
While this time of year marks the start of the bonanza festival that is Black Friday, Cyber Monday, Christmas, Boxing Day and NYE, retailers - and the media - are constantly telling us we need to buy more stuff, that the discounts are too good to be missed. It used to be that Black Friday was all about in-store deals, but an avalanche of advertising meant shoppers stayed home as the action shifted online. Retail aggregator LovetheSales.com, which tracks prices and discounts, said there were 26 percent more deals on offer this year compared with 2017.
If you must shop, shop with a conscience
Not all companies are focused solely on Black Friday profits. Everlane partnered with the Surfrider Foundation to donate 260,000 dollars to clean up 20,000 pounds of plastic off beaches. For every online purchase, Everlane donated 13 dollars, equal to removing one pound of plastic from the ocean. Cuyana, an apparel and accessories brand best known for its leather goods and the mission of buying fewer, better things, is donating a percentage sales to the victims of the fires in California. More importantly, if your wallet hasn't been too stretched after Black Friday and Cyber Monday there is Giving Tuesday, a day to give back, be it donating unwanted clothes or supporting a charity. Check out www.givingtuesday.org.uk for ideas.
Photo credit: Everlane Facebook