At some point over the last few weeks you will have heard the expression Black Friday but what is it and how is it impacting on the way we shop?
Black Friday originated in the USA and is the day following Thanksgiving Day (which is the 4th Thursday of November). This is identified as the day that Christmas shopping really gets underway so to prompt shoppers to start shopping promotional sales were offered. This moved to in-store and online offers and has been the busiest shopping day of the year in the USA since 2005.
It is called Black Friday because it refers to retailers going out of the red and into the black, red indicated a loss and black a profit.
Black Friday 2013 was the first time that UK shoppers had the promotional discounts and offers given to them from retailers all on one day. Amazon, John Lewis and Asda (owned by Walmart) offered flash sales and offered their customers bargains at very low prices. This continued to grow with £6,000 per second being spent in 2014 in the UK. In 2015 UK online sales on Black Friday were £1.1 billion (up 35% year on year) with the whole Cyber weekend bringing in over £3 billion.
As retailers realised by offering discounted prices they could get existing and potential customers to spend their money with them rather than their competitors more and more retailers offered Black Friday deals and discounts. Some retailers even offered loss leaders – this is when a product is sold so low that they cannot make a profit on it but if the customer makes other purchases they would get profit from the other items.
In the UK most of the revenue for retailers is generated online because in the USA a lot of employers allow the day after Thanksgiving to be a day's holiday for their employees so they have the opportunity to go in-store to shop.
The impact this has had on the way the UK do their shopping is in previous years December has been one of the busiest trading months for retailers but in 2015 spending dropped for the first time since 2009. In addition we are shopping more online to ensure we grab those bargains and if retailers do not have fully functioning online platforms or the relevant mobile applications for their customers their customers could go elsewhere.
Black Friday is here in the UK and Black Friday 2016 (25th November 2016) is expected to top 2015 with even more retailers offering Black Friday deals.
Happy shopping and I hope you bag a few bargains.