Black Friday is embedded in the retail calendar across Europe. It continues to grow strongly across many of our monitored countries, with only Great Britain, one of the earliest European adopters of the event, showing negative value growth in 2018, this coming after several years of growth.
In both volume and value Black Friday has become bigger than the traditional peak trading periods - including Christmas, the January sales, or Russia’s Gender holidays. Even in Poland, where Black Friday only recently became more mainstream, it is now snapping at the heels of Christmas week for sales.
This year, Black Friday could well be a whopper thanks to the timing of the event. It falls on the latest possible date, 29th November – aligning it with pay days and being only three and a half weeks before 25th December. But consumers are not jumping at just any so-called offer. Across Europe, shoppers are focused on value for money and are prepared to look around to find it.
Price and value for money are the no.1 factor for many people
Source: GfK Consumer Life 2019
Source: GfK Consumer Life 2019
In fact, across Europe, 45% say they are comparing prices from different stores more often than they were a year ago – rising to 51% in Poland and 60% in Russia. The battle for price doesn’t end after the purchase is made; interestingly 6% of people across Europe say they have increased the number of times they have returned a product after purchase because they found it cheaper elsewhere.
Given the media focus last year on how ‘genuine’ some Black Friday deals really are, we foresee an increasing trend of consumers researching and checking deals this year. So how can manufacturers and retailers meet this consumer demand and still keep the event profitable?
Black Friday started with the perception of a bargain-basement event, with manufacturers and retailers in some cases risking their profit margins due to sweeping discounts. The pain of this intensified thanks to Black Friday falling in the final, ‘golden quarter’ of the year when businesses are pushing to make their year-end figures and historically rely on high levels of profitable consumer spending.
As Black Friday grew in terms of sales volume and value, it was quickly realized this early approach was not sustainable. In markets where Black Friday rivals, or has overtaken, Christmas spending, manufacturers and retailers are unable to sustain discounts across their range and still deliver a profitable ‘golden quarter’. Instead, we are seeing a change in approach in ‘mature’ Black Friday markets, with manufacturers and retailers curating their offers more strategically.
We now see fewer items on offer, and many promotions aimed at encouraging consumers to ‘trade up’ to buying a higher specification or more aspirational model than they may have purchased otherwise.
And this isn’t only a profit-driven strategy. A major challenge of Black Friday for shoppers is the bewildering array of offers. It’s like walking through a market with traders screaming every offer they have at you, without any regard to your needs or purchase intentions. By focusing offers on a smaller number of products, manufacturers and retailers are trying to reduce some of that noise, thereby helping consumers to navigate a crowded environment.
The big question is how well does this strategy cater to consumer needs? Do people approach Black Friday with a fixed shopping list, or are they open to the feel-good factor of upgrading their intended purchase, or indulging in impulse buying when they see a deal?
Without question, consumers across Europe love the feeling of getting a bargain. Added to this, significant proportions of shoppers say it’s “important to indulge or pamper myself on a regular basis” or that they “prefer to own fewer but higher quality items” or “only buy from trusted brands”. Combine these, and you’re on ideal ground to attract consumers who are ready to be tempted to use the sales to indulge in higher-end products.
We should bear in mind there are some circumstances where consumers will trade down. These numbers are more prevalent in Poland and Russia – most likely driven by the trend for immediate gratification and getting a deal while an event is on, with choice perhaps more limited by lack of supply or availability. In sharp contrast to this, consumers in Germany show a clear decline in willingness to accept an inferior product or service, while the UK holds steady at just 15%.
When it comes to impulse buying, there is clearly scope to encourage this. Already, a third of people in Europe say they bought more than they originally planned during the last purchase they made in the Tech & Durables sector. The top three areas for this impulse buying are wearable technology (19%), virtual or augmented reality gear (16%) and smart speakers (14%).
There are some interesting country peaks within this too… Germany is particularly open to impulse buying when shopping for virtual or augmented reality gear – with 31% buying more than originally planned. In Poland, there is more temptation for small home appliances (23% buying more than originally planned), and in the UK it’s wearables (20%).
Clearly, then, the opportunity is there in terms of consumers’ overarching attitudes towards shopping - but what about the hard sales data for Black Friday itself?
Our data shows how the strategy of premiumization for Black Friday offers is working across many categories. In 2018, average selling price increases were evident across Europe, with sale value growth outstripping volume. Put simply, consumers bought more premium products during Black Friday week when compared to an average week. This was particularly evident in Great Britain and France. Even in countries such as Russia, with high inflation rates, the price growth for Black Friday outstrips inflation.
Click the flag to see the country analysis
Stirred up by media stories around the validity of Black Friday deals, consumers are becoming more skeptical than in previous years. However, with the pressure to buy gifts and the observed increase in consumer wanting fast gratification, this is unlikely to prevent significant numbers of people taking up some of the deals on offer.
More important is the sheer volume of “noise” fired at consumers in the build up to, and on, Black Friday. With different retailers and manufacturers offering different deals on different days, it becomes near impossible for consumers to robustly search the full selection and know they are getting the best offer. People are crying out for a bit less choice!
Source: GfK Consumer Life 2019
Source: GfK Future Buy 2019
This is no bad thing, in that the calendar had been pretty fixed for a number of years. We can see from the success of these events that consumers do respond strongly to them, and are hungry for a deal. There will always be a cannibalization effect, and this is what we’ve seen with Black Friday in terms of the impact on traditional Christmas shopping.
The future success of Black Friday will increasingly depend on delivering reassurance and clarity to consumers; turning the current bombardment into something trusted and beneficial to them. The holy grail of any retailing is offering the right product at the right price in the right place at the right time. This is equally applicable during Black Friday with the amount of activity in the market. The more retailers can offer personalized and curated ranges, tailored to the specific consumers’ needs at that time, the more they will succeed. Combine this with trust around pricing and promotional management, and it’s a winning formula.
To successfully do all of this, manufacturers and retailers alike need data combining market sales trends, insights on consumer shopping attitudes and demographic differences, geographical hotspots of potential spending, and more.
**The thinking in this article is based on our combined Consumer Insights data (Consumer Life and Future Buy) and Point of Sales Tracking.
↓ Get all the data with the Black Friday infographic
↓ Download this article (PDF)
Share the article: