Unsurprisingly, Black Friday 2016 broke the record set the previous year for the amount spent by shoppers looking to snap up a bargain. Retail analysts IMRG estimate that a staggering £1.23bn was spent online on Friday 25th November 2016 alone, 12% up on 2015. Many retailers echoed this success, with John Lewis reporting their strongest ever week of sales over the Black Friday period, taking just under £200m in sales over seven days.
At Ecrebo, we watched Black Friday’s events unfold with anticipation, and have identified five key takeaways from the discount day.
1.Black Friday is no longer just a one-day event
Black Friday has grown from a one-day event into a period spanning several weeks. This year, many retailers opted to offer their Black Friday deals a week before the event, keen to ease the pressure on supply chains and warehouses, following the chaos experienced in previous years. This extended period of trading saw retailers spread their promotions over several days, enticing shoppers to part with their cash over a longer period.
Amazon launched Black Friday week, dubbed ‘Cyber Week’ a full seven days before 25th November, with Argos, amongst others, making a similar move. Across the pond, both Wal-Mart and JCPenney also brought their holiday discounts forward to earlier in the month to compete with their online rivals and grab market share.
The retailers’ tactics to increase sales by extending the event across several days certainly appears to have paid off: according to IMRG’s figures, £1.23bn was spent on the Friday alone, with total sales totalling £6.5bn across the whole week.
2. Online beats bricks and mortar. Again.
Online sales won the battle versus physical stores for the second year in a row, despite retailers opening their doors early in anticipation of eager bargain-hunters. Online sales beat all previous records, with Argos’ chief executive saying their website received 500,000 visits in the first hour of online trading. Currys PC World also saw similar spikes with 500,000 visitors to their website before 6am(!) and orders up by 40% compared to 2015.
The Daily Mail’s leading online story mocked swathes of empty shops and car parks across the UK, in contrast to scenes of customers fighting in the aisles during the infamous Black Friday of 2014. However, although many shoppers preferred to shop from the comfort of their own home, we were encouraged to see that the high street did still see a boost in footfall.
3. Shoppers embrace mobile
This year, we really saw mobile come into its own with global ecommerce consultancy Salmon reporting that between midnight and 9am on Black Friday, 75% of shopper traffic came via mobile devices, averaging 57% over the course of the day. John Lewis reported that its busiest period was between 8am and 8.30am as people shopped on their way to work, and sales through mobile phones were up by more than fifth between 8am and 9am.
Sales through mobile devices were even more pronounced in the US, where Black Friday originated. Adobe reported that Black Friday online spending over the Thanksgiving weekend hit a record-breaking $3.34 billion this year, with over $1.2 billion of that through mobile devices, a 33% increase from the previous year. This was the first time that Black Friday mobile sales had exceeded $1 billion in the US.
4. Retailers opt out of Black Friday
Asda, who ironically, helped introduce Black Friday to the UK, along with Amazon, avoided taking part in the event again this year in favour of “lower prices all year round”. Several other retailers, including Jigsaw, the British fashion chain, also refused to participate in Black Friday. Jigsaw’s CEO argued in no uncertain terms that the day was a “complete illusion…with discounts that aren’t really discounts”. He also highlighted the unfavourable economics of the day – saying that the rise in online sales meant nearly 60% of stock was returned, creating further costs for companies taking part.
5. Shoppers get savvy
This year, shoppers were more prepared for Black Friday than ever before. Ad tech company Captify observed that some shoppers were researching items online months in advance of Black Friday, with some starting their research as early as August. According to global ecommerce consultancy Salmon, many shoppers added items to their online shopping baskets in readiness to click on the ‘buy now’ button as soon as the holiday discounts came into effect. The agency saw an 86% increase in the percentage of visitors adding items to their shopping baskets over the five days before Black Friday, compared to the previous week, with conversion rates twice the normal weekly rate (+106%).
What’s in store for 2017?
Given the continued success of the day for many retailers, Black Friday looks certain to return to the UK in 2017, despite the retail industry’s begrudging and ambivalent view of the benefits of the event. Whilst some retailers agree that “Black Friday is an unprofitable and unsustainable promotion”, for many, it’s hard to ignore the significant revenue boost it brings to their business, and how attached shoppers have become to the event. But ultimately, the success of Black Friday is down to how well retailers prepare for it.