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Reluctant retailers rein in Black Friday discounts

UK retailers are likely to rein in the Black Friday discounts they offer this year as they try to claw back margin in the face of tough trading. 

Despite a widespread reluctance to participate in the promotional event, many retailers have admitted they are unable to kick the habit under pressure of customer expectations. However, many Drapers spoke to this week are opting to run smaller Sales on 24 November compared with previous years.

“In an ideal world we wouldn’t have to participate, but the market is so competitive at the moment,” said Daniel Najar, director and co-founder at womenswear brand Chi Chi London.

“It’s like a domino effect: everyone’s got to do it or they’ll fall behind. It used [to be] a profitable time for retailers but now it feels like we’re cutting off our noses to spite our faces.”

Chi Chi London will offer Black Friday promotions on its direct-to-consumer website. However, Najar said it does not plan to discount heavily.

Likewise the chief commercial officer at one young fashion multiple said it will offer Black Friday promotions in stores and online, but with lighter discounts:

“We’ve participated in previous years and it’s been very successful for us,” he said. “It’s changed the shape of trade during November and December. In our sector, it’s important to be included.

“For Black Friday we’ll offer additional promotions but we won’t go crazy on our offers. We’ll continue to drive full-margin product at the same time, so our core ranges and bestsellers will continue to perform as they do, at full margin. We’re not interested in selling and discounting at a loss.”

Instead of running additional discounts on Black Friday, CEO of Kilver Court Freddie Saul said the outlet will run an “antidote” instead: “We haven’t participated in Black Friday for the past few years but it’s a missed opportunity if you don’t do anything,” he said. “We’ll do something different and run a sample Sale with Hugo Boss a week before.”

The CEO of one multiple said many need to run Black Friday Sales as UK shoppers expect it: “We don’t usually discount outside of end-of-season Sales, and even then it is minimal, as we prefer to clear stock through our outlet stores.

“That said, you need to do something around Black Friday as the shopper in the UK now expects it. I think online will be the big winner – I don’t see it driving a lot of traffic in store.”

For Luca Marini, COO at Finery, Black Friday is not a “major event”, but unavoidable.

“We chose to focus on branding, website performance, driving repeat custom and loyalty over short-term gains but can you live without doing anything on Black Friday? Probably not. It’s a good way to clear stock.”

However, the chief executive of one etailer has chosen to take part “fully” despite tough competition: “We will be fully participating in the season – last year’s event was a record for us, so we need to make sure we up our game and do even better this year,” she said.

“We now have better-targeted emails and more effective promotions, as we’re able to apply more data. It will help us to get the most out of the season but the comparatives are tough, so it will be a big hill to climb.”

One analyst agreed that, regardless of retailer enthusiasm, Black Friday shows no sign of disappearing: “Most retailers have figured out it’s a bad thing now, and would rather not do it – although that view can apply to most promotional activity,” he said. “Retailers haven’t succeeded in kicking the habit, and I can’t see it being any less of an event given current economic headwinds.”

The Drapers verdict

Black Friday will leave a sour taste in the mouth of retailers across the UK as they choose to run Sales rather than risk being left behind by their competitors. Under the shadow of Brexit uncertainty, this is no time to risk losing margin, and Drapers expects to see shallow discounting across the board for this year’s event. Whether it will be a stronger year for bricks-and-mortar stores or online is harder to predict: after a largely online event in 2015, Black Friday made a surprise return to the high street as in 2016 footfall increased by 2.8% year on year. However, discounting is not going anywhere, as retailers remain caught in a promotional epidemic but it is important to consider the risks of devaluing product and weakening demand as consumer confidence wavers.

Readers' comments (2)

  • darren hoggett

    Wholly disagree with comments that you 'have to do something' regarding Black Friday. You don't have to do anything.

    We've never entertained the financial own goal that is Black Friday. It has to be the single most ridiculous thing the trade has ever invented. Giving margin away just as people get paid can be attributed to a industry that is woefully lacking in common sense and is self defeating.

    Certainly from an independent point of view, if you keep playing the Black Friday/Sale card, you will devalue your store to the extent that all you will attract are skinners and cheapskates - where will you go then? It is a very dangerous strategy, however tempting it might be.

    The sooner the Black Friday nonsense stops and retailers go back to post Xmas and/or January sales the better, as that would benefit everyone, but will that happen? No.

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  • Invented by Amazon. To cause this chaos.

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