Lockdown has put the dampeners on a Black Friday sales surge with consumers expected to spend 20% less during the discounting event this year, according to PwC.
This is a dramatic about-turn compared with forecasts made before the announcement of a second lockdown, when the accountancy giant expected sales to rise by 8%.
The results of a PwC consumer survey carried out on November 5 and 6 show that consumer interest in Black Friday has waned since Boris Johnson revealed England would face a second lockdown.
More than half (51%) of consumers said they were interested in making Black Friday purchases when polled in mid-October, but this has declined to just 38%.
“Everything seemed hunky-dory in October and people were prepared to dig in on Black Friday but interest has fallen off dramatically,” says PwC director of retail strategy Kien Tan.
“It’s not a lack of access to stuff that has diminished demand – Black Friday was predominantly online in the UK anyway – it’s the uncertainty that’s been created.”
There is hope yet
Despite the impact on sales, Tan points out that this second lockdown will be nowhere near as bad as the first, when non-grocery sales fell by 40% from January to April.
The fact that Christmas gives us an impetus to spend now contributes to this, but so does the fact that Black Friday – the big shopping event held during November’s lockdown – is largely an online event. Last year, 77% of shoppers said they would do all their shopping online, compared with 88% this year.
And those who are interested in Black Friday say the closure of shops will actually drive them to spend more during the event.
There are a couple of possible reasons behind this. Consumers making savings during this period as leisure and hospitality is closed and holidays have been cancelled, and people bringing forward Christmas shopping.
In fact, almost a third (31%) of shoppers say they plan to get more of their Christmas shopping done over Black Friday this year, which perhaps reflects consumer concerns over delivery delays as we approach Christmas and also their desire to avoid crowds when stores reopen.
PwC consumer markets leader Lisa Hooker believes some shoppers have pulled forward their Black Friday spend. Retailers such as John Lewis and Liberty launched their Christmas shops earlier than ever before to cater for organised shoppers while Amazon’s delayed Prime Day in October encouraged some to bring festive purchases forward.
Hooker also points out that when lockdown was announced, it led to a surge of shoppers hitting the high street early last week.
Young shoppers put off
The biggest fall in interest has come from young shoppers, with just 44% of 18- to 25-year-olds saying they are interested in making purchases on Black Friday compared with 82% before lockdown. In fact, 25- to 44-year-olds are more likely to make purchases over Black Friday now than their younger counterparts.
The bad news for the hard-hit fashion sector is that before lockdown 18- to 25-year-olds were the most likely to buy clothes during Black Friday.
However, Hooker points out that while consumer sentiment fell the fastest in this younger demographic during the first lockdown in March, this group rebounded quicker than any other. In fact, both Boohoo and Asos sales and profits have surged post-lockdown.
Hooker says if external factors ease – such as lockdown lifting in early December and unemployment stabilising – young people could start shopping again and fashion will be a priority.
What will people buy this Black Friday?
The shift to Christmas shopping is evident in what categories people plan to buy during Black Friday Sales. Christmas stocking fillers and treats is the third most popular category with 31% of shoppers planning to make purchases in this area, up from 28% last year.
Unsurprisingly, electricals is the most popular category for Black Friday purchases, however there is a marked decrease – from 59% in 2019 to 47% this year – in the number of shoppers who plan to buy this year. This comes despite high-profile technology releases such as the iPhone 12 and Playstation 5.
PwC noted an increase in more practical Black Friday purchases with 21% of shoppers planning to buy kids clothing, compared with just 13% last year.
Hooker says this is a trend that has been gaining momentum for a while. “Last year the trend was towards practical gifting, whether that was children’s clothing or practical toys or homewares. Covid has accelerated this trend of practical, safe buys rather than frivolous purchases.”
Interestingly, health and beauty has overtaken fashion to make the top three categories in which women plan to spend, indicating that people plan to pamper themselves during a period when other pleasures such as going out have been taken away.
Homewares is an area where people plan to spend less. This comes despite a bumper year for the category as stay-at-home consumers have invested in improving their home. However, Tan says the prospect of slimmed-down Christmas gatherings means people are foregoing buying things to impress guests.
What can retailers do?
Clearly retailers with a great online offer, particularly those that offer inspiration and easy navigation, will fare better during Black Friday.
Social media will be a more important discovery channel with stores closed and housebound shoppers spending more time on social networks during lockdown. Retailers should invest in social and try to inspire customers with product ideas via this channel.
Having a true multichannel offer could also help win spend – with 12% of consumers planning to use click-and-collect during Black Friday, retailers should heavily promote their offer in this field.
With 12% of consumers planning to use click-and-collect during Black Friday, retailers should heavily promote their offer in this field
Maximising margin will also be crucial. Hooker urges retailers to avoid the blanket promotions – which more than half of fashion retailers adopted last year – and be more selective with the deals they offer.
The PwC survey highlighted that less than a quarter of Black Friday shoppers know the exact item they want in the Sales so retailers should focus promotions on higher-margin SKUs or products that were specifically bought to discount during the Sale.
This can make sure retailers make the most of the Black Friday opportunity and preservie as much margin as possible, which will be vital to get through not just lockdown but an uncertain Golden Quarter.