The Christmas holidays are just around the corner… are you ready? Retailers, some of whom learnt a hard lesson last year about the cost of being unprepared, will probably be ready for you, with a stunning array of sales and special promotions. And the fun begins in late November, thanks to a shopping tradition that actually began in the United States.
A billion-pound sales day?
Although Thanksgiving is a US observance and bank holiday, and the shopping frenzy known as Black Friday – the day after Thanksgiving – was originally a US phenomenon, Britain has embraced Black Friday in a big way. Over the past few years some of the country’s largest brands have participated in Black Friday promotions, and the day has become quite a hit with UK bargain hunters. Black Friday 2015, which this year falls on 27 November, is projected to mark the first time UK shoppers spend £1bn in one day, according to retail analysts.
Amongst the big brands cutting prices for Black Friday last year were Tesco, Amazon UK, Asda, Currys, Argos, John Lewis and Boots. Unfortunately some retailers were caught off guard by the enormous demand from British shoppers, and a number of national retailers had problems with their websites going down or loading very slowly. Some brands had to resort to holding pages, prompting many would-be buyers to abandon their purchases.
The commerce consultancy firm Salmon revealed that more than 65 per cent of British shoppers surveyed said they either agreed or strongly agreed that retailers were not adequately prepared to cope with demand on Black Friday. According to Glen Burson, chief technology officer at Salmon, Black Friday’s surge in sales in November 2014 “threw traditional British pre-Christmas shopping habits into disarray.”
Salmon predicts that the Black Friday momentum that has already built up, intensified by widespread press coverage, could very well lead to the first billion-pound sales day. Let’s hope the retailers are indeed more prepared this year than they were last year.
Online sales continue to grow
Whether or not this year’s Black Friday lives up to the most optimistic predictions, it is encouraging to see that people are spending money again. Another cheering indicator is that UK online sales returned to double-digit growth in September, according to figures released by the IMRG Capgemini e-Retail Sales Index. That’s the good news.
The bad news, if you want to look at it that way, is that growth for the year is still short of expectations. IMRG and Capgemini had originally predicted that 2015 online sales would grow by 12% this year, after 2014 saw sales reach £104bn, 14% up on the previous 12 months. Now retail watchers are pinning their hopes on peak holiday season sales making up for the shortfall.
Still, the September figures were an improvement over a weak August, when online sales grew by only 5% – the most abysmal performance for that month recorded by the index since it was launched in 2000. Always look on the bright side of life, as the song goes.
Joy, or cautious optimism?
Although wages aren’t rising as quickly as many people would prefer, they are currently keeping ahead of inflation, which has given many shoppers more free cash to spend. As the Christmas holidays approach that’s definitely good news for retailers. But retailers of goods such as clothing and homewares may not see as large a slice of that pie as they had in the past, as shoppers are spending more on services. When surveyed, a quarter of retailer John Lewis’ customers said they were spending more on holidays abroad this year.
But the point is that people – at least some people – have money to spend again, and they’re spending it. Is this a cause for unfettered joy or simply for cautious optimism? Perhaps it’s better to err on the side of caution, especially since many folks are still in a bit of a financial slump and struggling to make ends meet. No doubt many are wondering how they’ll be able to deal with yet another Christmas (didn’t we just have one of those last year?), and some may even be considering creative ways to finance their holiday shopping. The best advice for these folks is to exercise impulse control and avoid going deeply into debt just because there’s a Black Friday or Cyber-Monday or other pre-Christmas sale. There are plenty of ways to have a joyful Yule without digging yourself into a financial hole.