The early results of Black Friday might be intoxicating but the long-term impact remains unknown, as US history demonstrates.
US import Black Friday cemented its position on the UK retail calendar last year, a major shopping day kicking off the holiday season.
The early results might be intoxicating; the long term impact remains unknown, as US history demonstrates.
While there are arguments over the origins of Black Friday, the name itself dates back nearly half a century and is generally associated with two major components: it follows on the day after US Thanksgiving, which is on the fourth Thursday of November, and “Black” Friday suggests that this was the day that retailers began to make a profit.
Practically, this Friday is a holiday in the US with consumers off work and readily available to shop.
Combine that with special offers and extended store hours and Black Friday has become a major shopping holiday in itself. It frames the season and pulls shopping forward to create a longer (and hopefully, more profitable) season.
A great idea, in principle. In practice, two things have happened in the US:
- Retailers being retailers, the inevitable one-upmanship has begun to occur. Hours became extended – opening at 8am, then 7am, then 6am, etc. And, the deals themselves began to become more spectacular, with more limited time offers and door busters to encourage earlier shopping. Retailers lately have begun to open on Thursday, Thanksgiving Day itself. This has pulled the concept from a one-day event to a long weekend and diluted Friday’s impact.
- The ecommerce revolution has fully kicked in, diminishing the power and need for a single shopping day. Consumers shop 24/7/365 with no limitations. Physical stores will necessarily need to adopt to these new shopping patterns. John Lewis’s How we Shop, Live and Look report is a great example of these new patterns (ie sleep deprived parents buying nursery products at 4am).
So, in aggregate, what have been the learnings from the US?
- The day itself will become less important as retailers adapt to new realities. Extended hours and extended days are a bit like a drug – intoxicating at first but difficult to break the addiction. 2014 was the first year in the US of a Friday decline, mostly driven by retailers starting on the Thursday itself. We see no turning back from this trend and inevitable dilution as well as wear and tear on the employees themselves.
- There is little evidence that “pulling sales forward” actually creates more revenue over the course of the season. Consumers have limited dollars to spend; allowing more days to spend them doesn’t really help in the long run and creates a trough between Black Friday and the serious shopping that occurs the last weekend before Christmas.
That said, it is extremely difficult to avoid the temptation of Black Friday. If retailing is a zero sum game, the winners will be the ones that maximise their selling opportunities.
Black Friday becomes Black Thursday, extended hours become 24 hours a day and many retailers stay opened for every hour of the days before Christmas. Right or wrong, we don’t see any change in this direction.
The Black Friday genie is out of the bottle – sit now needs to be very carefully managed.
- Neil Stern is a senior partner at retail consultancy McMillan Doolittle.