The flurry of holiday shopping is upon us. In the U.S, Thanksgiving marks the starting line for America’s most prominent annual holiday shopping hysteria, known as “Black Friday.” The holiday often serves as a make-or-break episode for retailers. In fact, Black Friday is when retailers look to carve out a massive chunk of the business’s annual profits, while employing such tactics as predatory pricing and offer of freebies. From a single day to a more structured weeklong shopping season, the event has efficaciously evolved, thanks to the growing number of retailers and consumers participating in Black Friday.
The discount day, which usually heralds the start of the Christmas shopping phase, has triggered a change in the consumer shopping habits. Not only do shoppers indulge in a lot more online shopping now, but they also spend far more cash at brick-and-mortar outlets.
As per the National Retail Federation (NRF), the total consumer spending during the holiday season is expected to reach $682 billion in 2017, which is 4 percent more than last year’s sales, with over 137 million people visiting online and physical stores. Consequently, retailers have sought to take advantage of this by slashing prices to attract more bargain hunters.
E-commerce: increasing role of online platforms
While the world at large is accustomed to getting wind of perilous shopping scenarios, such as Black Friday mega sale stampedes, the fact is that more consumers are doing their holiday shopping online rather than at brick-and-mortar retailers. Over the past few years, Black Friday e-commerce sales have grown immensely. For the first time in charted history, the online platform is the most common shopping destination this year, favored by 59 percent of consumers, according to the annual survey conducted by the National Retail Federation.
Black Friday has emerged as a major facilitator of online shopping in the US- helping consumers explore the ease of shopping from home, without losing out on the best deals
The holiday season has proven to be just as profitable for small businesses using e-commerce solutions as it has for larger retail chains. However, this season, success for many online retailers comes down to proper planning and leveraging promotions well before the holiday season. Several retailers including Amazon unveil their Black Friday offers and deals early, surpassing Black Friday itself, as the competition this year will undoubtedly be fierce.
2017: The best year for toys and gaming?
Within the past decade, shopping patterns of consumers have shifted radically, which has eventually coincided with a period of strength for the toy industry. The industry has faced significant pressure from the technology world, as mobile devices and video games have captured the children’s imagination. However, two mega franchises have re-triggered the interest in this category in the past two years. The industry’s sales jumped to an incredibly high number, bolstered by sustained demand for ‘Star Wars’ and Walt Disney’s ‘Frozen’ themed toys and games.
This holiday season is anticipated to be an epic conclusion for what is shaping up to be the toy industry’s most excellent year in over a decade. On Black Friday, customers will be out in droves to make sure that they pounce early on the must-have toys and gadgets, while being concerned that in-demand products might sell out if they wait any longer to buy them.
Although Black Friday is still a significant sales driver for the industry, it has lost some of its shine in the recent years. Toy retailers, like the other industry leaders, have learned that they must change their marketing tactics and strategies to keep up with the new shopping patterns. A senior analyst at Technavio emphasizes that ‘retailers cannot stick to a traditional script to compete satisfactorily in 2017”.
Consumer electronics is an ever-green sector
Black Friday is now the single most significant sales week of the year for consumer electronics. Plausibly, the excitement and hype of Cyber Monday and Black Friday are primarily centered around finding the best TV, camera and laptop deals and research indicates that Black Friday 2017 is no different.
It is fair to view 2016 as mostly a transition year, in which consumers and industries were introduced to the potential of new technologies, new business models and new categories. With that said, 2017 is shaping up to be a tipping point year wherein new products will either be popularly integrated into the mainstream or completely miss their mark; a year where breakthrough technologies will prove their worth or begin to fade away. From a technology standpoint, the positive view is that 2017 seems to be the repeat of what happened in 2009-2011, where new technologies and their use cases offered a burst of opportunity and enthusiasm for the market.
However, technological shifts are always more stimulating and offer the most long-term opportunities for business. Among the latest technology developments, ‘Smart Home’ seems to be poised for an explosion in 2017. With ever-increasing consumer spending and burgeoning demand for innovative electronic products, this year’s holiday season is sure to spike up the sales of consumer electronics.
Apparel and textile industry at a crossroad
Over the past few years, the apparel industry has been ‘under pressure’ during the holiday season. This is not only because of decreasing consumer spending on clothes and accessories, but is also due to the sector becoming extremely promotional. Given the proliferation of fashion brands and private labels, price pressure is already intense within the apparel industry, often resulting in companies offering drastic Black Friday discounts, only adding to the problem and underpinning consumers’ expectations for more concessions.
As we witnessed last year, steep discounting is not a very productive technique to drive sales and profits. In today’s merchandising environment, retailers and brands that use price as their only competitive edge are setting themselves up for failure. It is time for the apparel and footwear industry to get back to the basics, prioritizing innovation, quality and exclusivity, which have always been the industry’s cornerstones.
As per our analysts, 2017 may be an anomaly, as less in-store foot traffic, weather and extreme discounting will factor into and threaten the holiday performance. However, with so many consequences, there are but a few positive sides of the story that can help brands to grab the undivided attention of their target audience. Retailers in the apparel industry that offer products by way of fashion benefits or even components of personalization will be the ultimate survivors in this battle of attrition.
Moving beyond the Americas: Black Friday is now a global event
A few years ago, not many countries would have heard of the phenomenon that is Black Friday. However, this massive shopping event, which initially started in the US, has now made its way into a number of other countries, as people look to snap up bargains in preparation for Christmas. Here are some of the emerging markets that could play a defining role through Black Friday 2017.
European market
Black Friday made its mark in the European market when Amazon introduced a huge shopping weekend for European customers back in 2010. It’s no surprise that many local retailers followed this trend and started offering the best Black Friday deals on electronics, gadgets, apparels and many other products.
Although continental Europe is lagging behind the UK, it is slowly picking up with rapidly increasing awareness about this event. With the growing adoption of retailers running Black Friday sales in markets such as Germany, Spain, and France, our analysts predict that this awareness will continue to grow at an unprecedented pace in European markets through the 2017 holiday cycle and beyond.
With the rapid digitalization of the world, an online phenomenon like Black Friday was sure to have a global impact, sooner than later
UK market
Black Friday is big news in Great Britain and the 2017 edition is promising to match upto the American version in terms of popularity, retailing and floating of exclusive Black Friday deals. Despite not finding favour initially, alongside Cyber Monday, the pioneering work of e-commerce giant Amazon marked a starting point for steep discounts on a wide range of products during Black Friday, thereby officially kicking off this trend in the UK.
The idea proved to be popular. As a result, other retailers started to offer Black Friday discounts, both in stores and online. However, it wasn’t until 2013 that this shopping day achieved a similar status in Britain that is relished in the US. As per our analyst, Black Friday is analogous to Boxing Day sales traditionally held in the Great Britain. In fact, Black Friday has now essentially replaced Boxing Day in terms of sales volume and popularity.
South African market
In the last few years, the tradition of Black Friday sales has cropped up in some of Africa’s major cities, prompting local online players and retail outlets to take note. From radio to television and social media, retailers in South Africa have been increasingly advertising Black Friday specials. Infact, South Africa’s largest e-commerce site adopted Black Friday for its brand by introducing the “Blue Dot Sale”. Over 10,000 products ranging from toys to fragrances are annually marked down by up to 50%, with sales usually beginning at midnight on Nov. 25 and winding up by Nov. 28.
Black Friday is on the rise in South Africa and is set to contribute massively to the country’s 900 billion retailing sectors. Apart from retailing, this trend is set to be adopted in other industries such as foodservice- wherein outlets like Wimpy are offering discounts on their meals. Black Friday is here to stay in South Africa, and looks to expand into the rest of the continent.
