Black Friday deals spell the death of January sales, claims London Business School retail expert

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The Black Friday weekend deals bonanza is set to leave the January sales facing a frosty reception, according to a retail expert from London Business School.

Elizabetta Camilleri founded SalesGossip in London Business School’s Incubator after studying for her MBA at the School. SalesGossip curates all fashion and beauty promotions online and on the high street, and is warning early Christmas promotions on Black Friday weekend will spell the death of January sales for many retailers.

Camilleri explains: “Instead of waiting until January, shoppers are increasingly buying their fair share of festive bargains ahead of Christmas.

“Black Friday is causing consumers to change their shopping habits. Last year, traffic to SalesGossip on Black Fridayincreased fourfold compared to the same period in 2013. Similarly, the number of online purchases increased five times.

“Year-on-year, Black Friday is growing in popularity among retailers,” Ms Camilleri continues. “At SalesGossip, we are predicting more than a quarter (27%) growth in retailers offering Black Friday deals this year, from 458 in 2014 to 580 retailers in 2015. The majority of retailers taking part are high street and premium high street brands.”

In the UK, Black Friday has become an entire weekend of both instore and online discounts. The increasing demand for Black Friday deals is having a significant knock-on effect, over-shadowing traditional January sales.

“By comparison, website traffic and online purchases via SalesGossip in the first week of January this year only increased by a steady 30% and 40% respectively on 2014 figures. While we did see growth, the figures are minimal compared to the Black Friday boom,” says Ms Camilleri.

End of January sales as we know them

This year SalesGossip predicts a mere 1% growth in retailers offering deals in the first week of January 2016.

“Most retailers don’t want to be left behind, and so many are jumping on the Black Friday bandwagon and starting their sales period early,” observes Camilleri. “This could spell the end of traditional January sales as we know them.”

Retailers need to be savvy

Retailers adopting the Black Friday trend must be savvy in how they structure their discounts to compete with other retailers and to attract a steady flow of customers up to Christmas and beyond.

Camilleri says: “It is not only about capitalising on the Black Friday weekend, it is about maintaining the momentum throughout the festive period. Many retailers are becoming much more strategic in their promotions. Following Black Friday, they are offering deals throughout the first week of December and never really switch these off right up to January – they just keep changing the type of promotions available.”

For retailers who decide not to offer promotions before Christmas, competing with retailers who do becomes a tall order come January.

“Retailers who kick-start their promotions in January typically offer 25% to 30% off deals. However, by this point, retailers who started their promotions early are already offering customers 60% to 75% off the remnants of their stock,” says Camilleri.

“Retailers late to the party are finding they have to ramp up their promotions quickly to entice customers looking for a post-Christmas bargain, or risk missing out on vital sales.”

One thing is for certain, with Black Friday seemingly here to stay, retailers are facing a decision – join the party early or be prepared for a bleak sales outlook in January.