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Black Friday always falls the day after Thanksgiving Day in the US, with a lot of workers choosing to take the day off to spend a long weekend with their families. Retailers have sought to take advantage of this by slashing prices in order to attract bargain hunters, but consumers don’t need to wait until Friday to find deals.
Tim Barrett, Retailing Analyst, Euromonitor International:
“In an age where everyone is too busy and all our actions are data points to learn from, retailers that release holiday sales information earlier than their competitors increase their exposure to customers and in doing so, gain more time to gather information on how to best prepare for the coming months.
Generating demand for the ‘hottest’ toys of the season is both an art and a science, and by releasing this information to the public sooner, retailers and their supplier partners get more data upon which to limit customer frustration from crucial out-of-stocks. By extending timelines, shoppers have more time to shop while helpfully narrowing the decisions needed to enact a successful merchandising strategy for retailers.”
|Many retailers are starting Black Friday early (on Thanksgiving Day). Online sales reached $4.5billion in 2015 for Thanksgiving/Black Friday, and Cyber Monday reached US$3billion in 2015.||According to Amazon, Prime Day 2016 was the company’s largest sales day ever. This year, customers worldwide placed 60% more orders compared to Prime Day 2015. There aren’t figures released by Amazon, but estimates are around US$2-3 billion for Prime Day 2016.||In 2016, sales reached $1B in the first five minutes and easily broke its own record of $14.3 billion from 2015. Most recently, the company announced that the event generated $17.8billion in 2016.|
Michelle Malison, Retailing Analyst at Euromonitor International:
“As Prime Day was created to drive Prime memberships, Singles’ Day seeks to get people to buy online for the first time. Both share the ‘made-up’ holiday element—it was really created to drive brand awareness more than anything. Alibaba rebranded Singles’ Day to “The 11 Global Shopping Festival”. The way it is rebranding the event and how it’s attracting more international brands as well as how it is integrating technology for the event shows how the company is envisioning the future of retail.
The oldest of the three events, Black Friday, was created in response to consumer shopping habits in the US because a lot of people have the Friday after Thanksgiving off. The day was created to capitalize on natural, already existing consumer behavior. Retailers made the event into a discount-driven, promotional environment. The amount of goods sold on Black Friday is certainly much smaller than the amount sold on Singles’ Day.”
Matthew Hudak, Toys and Games Analyst, Euromonitor International
“Every year there are the usual suspects that shoppers are interested in—consumer electronics, video game consoles and toys. This year toys will likely take up more of the gift giving budget. Tablet sales are expected to decline by 12% for the year. Television sales will fall by 1%. Smartphones, the ever popular electronic device of choice, will only grow by 3%. And video game consoles, a direct competitor to toys, are expected to decline by 1.5 %. Traditional toys, the exception, are expected to see sales grow by 5% throughout 2015, making them a prime category to get right when it comes to merchandising this holiday season.”
Bernadette Kissane, apparel and footwear analyst, Euromonitor International
“Although Black Friday is typically known for the discounting of electronics, gadgets and tech, fashion retailers are increasingly getting in on the action, with many leading brands such as Marks and Spencer, Gap and Topshop all slashing prices by up to 50% in 2015. While this high profile sales event can certainly provide a much needed boost to the initial holiday season, it doesn’t come without consequences, namely profit margin. Price pressure is already intense within the apparel industry given the proliferation of fast fashion brands and private label, such drastic discounting only adds to the issue and reinforces consumers’ expectations for discounts.
Mobile retailing is set to lead the way this season, a trend that will only intensify on Black Friday, as the chaos of stores and urgency to capture deals drives consumers to adopt the convenience of tracking and purchasing items at anytime from anywhere. Although Black Friday is set to be as popular as ever this year, the benefits from participating in the discounting frenzy may not outweigh the costs for some.”
Karissa Chua, consumer electronics analyst at Euromonitor International
“The holiday season is always a bumper quarter for electronics retailers and manufacturers.
Smaller products like wearables and wireless speakers are expected to lead sales during Black Friday. Fashion-focused wearables from brands like Fossil and Michael Kors are likely to do well. These wearables will appeal to consumers who want to look trendy without spending a fortune on premium watches.
Speakers from brands like JBL and Ultimate Ears are also popular gift options particularly for the millennials as sales of wireless speakers is projected to grow by 21% to reach 58 million units in 2016.”
Talking about the success of black Friday in Europe, Derya Lawrence, Senior Analyst, Euromonitor International comments: “Continental Europe is lagging behind the UK but picking up. Black Friday was still a relatively low awareness event in many European markets in 2015, however, despite this, this awareness is increasing rapidly. And with the increasing adoption of retailers running Black Friday sales in markets such as France, Germany, and Spain, we expect that this awareness will continue to grow further in European markets in the 2016 holiday period and beyond.”
Despite the UK not celebrating Thanksgiving, Black Friday arrived in 2010 when US online retailer Amazon offered up to 300 ‘Black Friday’ deals to bargain-hungry consumers on its website.
Derya Lawrence, Senior Analyst, Euromonitor International comments:
“Black Friday is akin to the Boxing Day sales traditionally held in the UK. In fact Black Friday is increasingly replacing Boxing Day sales, according to Lawrence.”
He continues: “Shoppers are used to seeing heavy discounts throughout the year. UK retailers are now seeking to take back the initiative in order to attract consumers early in the Christmas shopping period. Retailers want to avoid the uncertainty of shoppers making their purchases in the last few days before Christmas, and risk them having unsold stock. Seems to be working.
The advent of promotional days like Black Friday and Cyber Monday gives retailers more opportunities to increase their advertising to cement their low price positioning. These promotional tools make discounting ever more pervasive, however, and encourage even more bargain hunting among shoppers. For retailers, it makes it more difficult to communicate the other attributes of their products or brands, thereby legitimising shoppers’ “poker game” attitude. Ultimately, it can weaken their ability to control their pricing strategies and may even undermine margins, not only for themselves but more crucially for their suppliers. So there are associated risks.”
Lawrence concludes: “A major trend last year was for retailers to start their Black Friday sales at the beginning of the week. This is partly because Black Friday is becoming an online phenomenon here, and if retailers can spread the online demand it will avoid the risk of systems crashing and distribution becoming overwhelmed.”
Christy Tawii, Senior Research Analyst at Euromonitor International
“In South Africa, Black Friday has been gaining some momentum over the past few years, particularly this year with big chain stores such as Checkers, Massmart and a number of online stores. Unlike in true American fashion though, the discounts vary from 10% to 50%, with a few big brands like Samsung offering “crazy” discounts of up to 80%. Shopping malls are expected to be open a bit later than usual so as to cater for all shoppers on the day. In as much as South Africans do not celebrate Thanksgiving, Black Friday is on the rise and is set to contribute immensely to the country’s 900 billion rand retailing industry. Apart from retailing, this trend is also being adopted in other industries such as Consumer Foodservice, where food outlets such as Wimpy are also offering Black Friday discounts on their meals.
As a result of constraints stemming from factors such as rising inflation, volatility in the labour market, extended periods of drought, the falling exchange value of the South African rand and rising utility costs, retailers are continuously reviewing their strategies in order to remain competitive and accommodate cash-strapped consumers.”
For more information, please visit: https://blog.euromonitor.com/2016/11/big-box-retailers-releasing-black-friday-deals-earlier-each-year.html