Black Friday and increased online trading made 2014 a tumultuous year in retail – and the pace of change looks set to continue into 2015.
As the retail Christmas updates roll in, the varied performances being reported underscore the signs across November and December that this would be a festive period of dramatic change.
For good or for bad, Black Friday has shifted the pattern of Christmas trading. The concentrated discounts around the weekend of November 28 added sparkle to kick off the festive season but even some of those that leveraged the power of the weekend to best effect, most notably John Lewis, have questioned how far the industry should keep pushing the promotion.
John Lewis boss Andy Street said this is the first year that Black Friday was the retailer’s peak week – bigger even than the pre-Christmas week. John Lewis suffered none of the fulfilment outages other retailers were hit by, a testament to the huge investments it has made in its supply chain.
Nonetheless, Street still warned this week that it is not in the sector’s interests to focus so much trade into one day, a challenge exacerbated by the margin eroding discounts on offer.
However, Street’s hopes that 2014’s Black Friday discounting reached a “high water mark”, combining as it did with Sales in fashion driven by the warm autumn may be wishful thinking. Other retail giants, from Asda to Amazon, may be less likely to apply the brakes to the momentum that has built up around this discounting frenzy.
House of Fraser has already countered Street’s comments. Its chiefs believe Black Friday is likely to get “bigger and bigger” and has shrugged off concerns about the event.
By far the most notable detail in House of Fraser’s update was the fact that online sales soared 31.2% over the five-week period and this year is the first that the retailer’s online business will have a higher profit margin than the store business.
Black Friday not only changed the shape of trading, it has also pushed consumers online in volumes not seen before. And retailers’ performance has been as varied as the financials being reported. Clearly there is work to be done by some retailers in order to meet changed expectations of ecommerce.
The pace and scale of change is evident too in grocery as the established giants fight to fend off the rise of new challengers and trends such as a shift towards convenience shopping.
As 2015 gets under way, perhaps the only certainty is that when we look back in a year’s time the landscape will have shifted again and those retailers best able to innovate will be the winners again.
All of us at Retail Week wish you a happy and profitable new year.
- Chris Brook-Carter, Editor-in-chief