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Black Friday chaos could leave retailers in the red

As Black Friday on November 27 fast approaches, retailers already have an eye on next year’s discount day.

After the mania of Black Friday 2014, many have adopted a more strategic approach this year and, following Asda’s decision to step back altogether, there is speculation that others will follow in 2016.

This year, retailers’ tactics vary wildly: Harrods, Jigsaw and Primark are doing very little to mark the day, while etailer Shop Direct is extending the discounting period to a full two weeks. Chief executive Alex Baldock said 2014’s Black Friday was the busiest trading day on record and sales at its Very site were up 134% year on year.

At a John Lewis dinner this week (between swapping stories about previous summer jobs – fashion and beauty buying director Ed Connolly’s in a glue factory and mine running a bar in Kavos), managing director Andy Street predicted 2015’s closing months will have three peaks: Black Friday, Christmas and “Clearance”, although Black Friday will be the biggest week by far.

However, Street did speculate that in coming years this could change as retailers consider the effect of price-slashing on the last Friday in November on their overall business strategy. Pre-Christmas discounting may kick off the shopping period earlier but, rather than generating a net increase in sales, it can impact on pre- and post-Black Friday trading and eat into margins.

The BRC-KPMG Retail Sales Monitor bears this out: like-for-like sales fell 0.2% in October compared with October 2014. KPMG points out that (post-Black Friday) December 2014 sales growth was the weakest since 2008, at just 1%. It would appear crazy to have a strategy that revolves around increasing turnover at the expense of margin. The long-term future of Black Friday is bleak: eventually it will become much less prominent. But in the meantime the challenge for retailers is to balance an increase in customer footfall (or traffic) by discounting without damaging overall trade.

Beyond Black Friday, talk of course turns to Christmas, as retailers launch their seasonal advertising campaigns (see page 8). John Lewis took the lead, attracting nearly 6 million views on the day its “Man on the Moon” ad aired.

And you agree. In our drapersonline.com online poll asking “Who got it right?” with their Christmas advertising, you overwhelmingly voted for John Lewis. The campaign will be brought to life across all the retailer’s channels, including the app, and via in-store Christmas workshops, which Street says are all part of a continued investment to bring theatre to the store. Net-a-Porter is second in the poll with an ad that could not be more on-brand. Debenhams’ and Very’s simplistic approach does not appear to have had such an appeal so far.

You can see these adverts on drapersonline.com via your mobile, as this is Drapers’ first interactive issue. We have worked with augmented-reality app Blippar to bring this special edition to life. Highlights include an interactive map of Birmingham’s fashion stores and a chance to vote in our womenswear high street Hit or Miss feature, as well as plenty of extra content, such as videos and image galleries, directly to your device. And, best of all, take a selfie and become a Drapers front cover star.

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