Black Friday: ‘no silver bullet’ for retailers

UK online retail sales were up 11.5% year-on-year in November, according to the latest figures from the IMRG Capgemini e-Retail Sales Index.

Although Black Friday (November 24) achieved a slightly higher growth of 11.7% year-on-year, November’s overall monthly figure was notably below the November growth average for the past four years of 18.3%, the Index reports. It was also lower than the 12.7% average of the preceding three month period (from September to November).

The Index notes that ‘looking specifically at Black Friday performance, it’s evident that it was the medium-sized retailers (those whose websites generate between £10-100 million a year) who tended to secure the highest share of sales growth overall, while the results from the large retailers (those whose websites generate over £100 million a year) were more mixed.

‘With retailers ever conscious of edging out their competition, monitoring of discount levels across 210 websites in November revealed that [the discounts] were widely available throughout the whole of November – not just during the Black Friday and Cyber Monday period – and this is likely to have impacted on overall revenue growth. This implies less of a focus on pricing strategy for a particular day, and more on extending the discount purchase window order to spur growth.’

The Index points out that despite the extended discount windows, many sectors saw a decrease in year-on-year growth over November. In particular, having experienced its first year-on-year growth in the six months in October, electricals suffered a -0.9% year-on-year fall.

‘While week four of November – Black Friday week – was up 22%, the rest of the month performed extremely poorly. Week One began at -17% year-on-year, week two at -3%, and worst of all was week five, at -30% year-on-year growth. This compares to year-on-year growth of almost 24% in November 2013,’ the Index claims.

IMRG managing director Justin Opie commented: “Black Friday is all about discounting in the mind of the shopper, and it’s perhaps unsurprising that, while ordering activity was high over that period, revenue growth struggled to keep pace over November as a whole, due to the long lead-in to the Black Friday period.

“It does raise a question regarding how retailers can actually assess success over that period. On the one hand, securing share of sales away from competitors is obviously always important to retailers.

“But it might be that the measurement of success over the Black Friday period is less about order volumes and more about the longer-term view: how new customers acquired can be converted into regular, loyal, higher-margin customers, through the quality of the follow-up marketing after the discounting peak is over.”

The IMRG Capgemini e-Retail Sales Index tracks online sales, defined as transactions completed fully, including payment, via interactive channels from any location, including in-store.

IMRG (Interactive Media in Retail Group) bills itself as ‘the voice of online retail in the UK’. It is a membership community comprising retail businesses of all sizes – multichannel and pureplay, SME and multinational – and solution providers to the industry. Members are supported through a range of activities including market tracking and insight, benchmarking and best practice sharing.

Capgemini is a global leader in consulting, technology and outsourcing services.

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