Whether you believe the day’s name originates from widespread “calling a sicky” or Philadelphia police force slang, the day following American Thanksgiving is notorious for huge discounts leading to shopping pandemonium.

Due to the sheer volume of sales, Black Friday has not only spread to other countries, including the UK, it has also come to span the entire weekend ending with “Cyber Monday”. Amazon has been so inspired by the event that they have launched their very own “Prime Day”, offering a multitude of deals and discounts on their online marketplace. It’s clear to see why retailers participate, as shoppers spent £2.5billion on Black Friday alone last year which was even cited by many pundits to be a ’disappointing performance’. This year, however, Black Friday will have a very different look and feel.

The image etched into the mind from 2014 showing customers clawing and clambering over each other to grab a large screen TV during one of Asda’s Black Friday store campaigns is likely to be replaced by an almost silent High Street and a surge in online expenditure. But what does a Black Friday during a pandemic really mean for customers and retailers?

Customers – Online hunting, website crashes & delivery fees

For shoppers, Black Friday 2020 is likely to be more like attempting to buy exclusive festival tickets than stampeding into Currys PC World. With the closure of non-essential shops in England, most - if not all - Black Friday bargain hunting will be done behind laptop screens rather than elaborate Christmas window displays this year.

High Street footfall was decimated during the first lockdown, with many turning instead to online shopping and home delivery as a means to avoiding potentially infectious crowds. Whilst High Street footfall has recovered to a certain extent, September 2020 footfall was still 33.7% lower than in 2019; impacting differently across the country with Central London at -55.5% while Coastal Towns were significantly better performing at -17.1%.

Shoppers should not fret, however, as many British high street retailers have announced their Black Friday participation, including Currys PC World, Argos, John Lewis, Superdrug, The Body Shop, Kurt Geiger, and Mango[1]. This new approach allows customers to nab deals from a wide range of shops at just the touch of a button – arguably a far faster, easier and safer way to shop than the crush and bustle of the high street on 29th November 2019.

As anyone who has attempted to purchase festival tickets will know, there are likely to be frustrating website crashes and delays when everyone rushes to grab bargains online on 27th November this year. Some retailers are trying to reduce the likelihood of this eventuality by starting their sales early to reduce website traffic. Some retailers, such as Currys PC World, are also offering consumers a refund on any difference in price should prices drop between the date of purchase and Black Friday itself. Still, customers should be prepared for the possibility of aggravating delays and discouraging basket losses.

Another potential downside for customers during this online Black Friday is the accrual of delivery costs. While there has been an increase in UK retailers offering free delivery in recent years, a number of high street brands continue to have a minimum spend threshold or charge a flat rate of £3.00- £4.00 for standard delivery, which may eat away at customers’ perceived savings. Of course, Click & Collect options are still available in many cases, for those shoppers who are happy to brave a trip to their local stores. Some retailers may even move towards extended fulfilment lead times, with customer choosing these over the more expensive, shorter lead times. Moving to this model will also ease the pressure on carriers who will undoubtedly see an increase in demand for home delivery.

Retailers – Empty stores, sterilisation of returns & indoor-friendly product selections

Since the new restrictions came into play in England on 5th November 2020, all non-essential retailers, such as clothing and homeware stores, have had to close their shops to the public although they are still able to offer Click & Collect and delivery. Even for those who are able to open, tight restrictions will have to be in place to reduce the amount of physical contact between customers and staff, and to maintain governmental guidelines. This means that British retailers will have to adapt their strategies massively compared to 2019, leading to a number of challenges.

Encouragingly, the latest ONS data shows that retail sales recovered to pre-pandemic levels in August, notwithstanding the reduction in high street footfall, which could be a sign that consumer confidence is recovering. For the past few years November and December have been the biggest months for Retail eCommerce, however, the pandemic has driven a significant boost in sales – June 2020 was 15% higher than December 2019 and with a Wells Fargo survey stating 70% of consumers do not plan on returning to stores this year could mean online sales are set to increase further as we head into the traditional eCommerce peak.

Not only do retailers have to implement extra precautions in their front-end of operations, but they will also need to put in extra thought into how to handle their returns. This is especially relevant for fashion retailers, as clothing returns generally hover between 30-40% and this is normally exacerbated by a surge of selling on Black Friday.

The key challenge is then how quickly that returned unit can be made available for sale again, which this year may require quarantining or additional cleaning processes to protect public health. Contrary to the historic profile of returns, the purchasing of size-dependent clothing has reduced as less workwear and more casualwear have been needed and purchased. As a result, return rates have reportedly dropped to 5-10% during lockdown. However, with the volumes of sales on Black Friday, the inability for customers to try on products in store and the uncertainty as to when restrictions will be lifted the return rates could soar back to their previous levels.

Another consideration for retailers is what items they should promote this year. The first lockdown saw increases in sales of toys, especially jigsaws, and other household entertainments to keep everyone busy during the prolonged time indoors. With lockdown number two, retailers must consider what people are likely to buy as gifts for Christmas this year and the activities people will be able to do. 2020 Christmas customer missions may look very different to previous years for a number of reasons. There will be significantly fewer winter getaways overseas, leaving more people to celebrate Christmas at home. However, depending on local tier restrictions, the rule of 6 could change the face of the traditional family Christmas significantly this year. The big question is how these factors will influence consumer behaviour and which products and services customers will want to purchase. Either way, it will require the Retail industry to be more agile and responsive to changing demand as we enter into the unknown as seasonal buying patterns emerge.

Black Friday 2020 – Unpredictable demand, habits and appetites

Black Friday 2020 is likely to be both unpredictable and drastically different to previous years. Demand patterns will be largely variable this year given the broader economic context customers find themselves in. For example, those who have unconstrained movement and have built up a surplus of cash due to restricted out-of-house activities may be looking to reward themselves by spending more than usual and may wish to order all of their Christmas gifts in one day, as all purchases are likely to be online this year anyway. Conversely, those who have restricted movement and have been negatively impacted financially will be reducing their spend significantly and focusing on core items, whilst also perhaps finding themselves forced to pay for Home Delivery.

Another key factor for clothing returns is the channel – with fewer people able to try on clothing in-store due to COVID restrictions, the rationale for visiting the high street to shop for clothing is reduced – instead, consumers are doing more clothes shopping online, where the advent of augmented reality solutions are aiming to improve the customer experience through virtual fitting rooms and consequently reduce the risk of returns once the customer has tried the clothes on at home. Whilst this technology is in its infancy, those who are using it, such as Zalando and Adidas are seeing real benefits.

Finally, the categories customers choose to shop this year will likely be different and unpredictable. As customers themselves are uncertain about what the next few months will hold, what products they will need to buy and in what quantities are an unknown for retailers and consumers alike.  

As the majority of Black Friday will be online this year, retailers need to find new and innovative ways to engage customers (i.e. new technologies), deliver on their promises and minimise downsides (i.e. returns, additional cleaning required) associated with the “new normal” in a Covid-19 world.

 

[1] Independent, “Black Friday 2020: Which stores are taking part in the UK?” - https://www.independent.co.uk/extras/indybest/black-friday/black-friday-sale-brands-stores-shops-uk-2020-b532654.html

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