Liam McElroy, managing director of retail at Wincanton, considers the implications for Black Friday in the UK
Black Friday is back. And this time everyone knows what’s coming. Launched in the UK just five years ago, it is thought the one day only flash sale will in 2015 be the biggest event of the retail year.
Why has the day proved so popular with consumers? In the US it is the national holiday associated with Thanksgiving, so naturally people are feeling festive. Over here, as the darker nights draw in, and with Christmas just around the corner, it offers a good opportunity to tick some items off the gift list.
Having managed the logistics supply chain of some of the UK’s largest retailers, we know that Black Friday has prompted a shift in the calendar year. Now, Christmas starts even earlier, and we have to make sure our warehouse and delivery teams are ready to cope with the peak in demand.
Being ahead of time is deeply ingrained in our business and in the British psyche – as is bagging a bargain, another reason Black Friday has been a hit this side of the Atlantic.
But there’s one side of Black Friday that British consumers are not so fond of: the mad rush. Newspapers were quick to cover off the scenes of madness and disorder during last year’s event, and while it did mean some retailers got their name in the papers, it might have been for all the wrong reasons.
This is perhaps why Asda and Primark have decided to officially opt out of Black Friday 2015. Despite being the one of the earliest to promote Black Friday in Britain, Asda has decided to instead promote offers throughout the run-up to Christmas while Primark says it is always good value.
It will be interesting to see what happens in 2016. As the event is not connected to a holiday here in the UK, there isn’t the same sense of tradition to it, which means there is greater opportunity for flexibility.
In the US, Black Friday is closely associated with Cyber Monday, the Monday following Thanksgiving when retailers concentrate on online deals. The event – this year on 30 November – has had some success in the past, but has not been so highly subscribed as Black Friday. Analysts predict it will be the UK’s first £1bn online sales day.
It might be that Cyber Monday is something altogether more British, and is therefore more likely to stand the test of time. It involves far less fuss, but still rewards those who are patient and wait in line. People can still fight over high spec goods, but from the comfort of their own home.
If Cyber Monday were to overtake Black Friday, however, it would place even greater strain on the delivery network. Last year, some shoppers had to wait weeks for their orders to be delivered, with some Christmas gifts barely through the door.
In the UK we have a number of options for getting our hands on stuff we’ve bought online. Home delivery, in-store Click & Collect and community collection points outside train stations, for example. Each comes with its own set of constraints for retailers, in terms of easy – and affordable – fulfilment, but nevertheless consumers are becoming less and less patient with lengthy waits and long delivery windows.
And here we have the crux of the matter. In retail, consumer choice is everything. With competition for each and every pound spent getting fiercer every year, retailers can little afford to let the side down when it comes to customer service, and delivery is a vital part of that.
These days, the mode of delivery is an extension of the brand, as important as the packaging and the quality of the goods. A delivery person can come into contact with a customer multiple times, as shoppers buy multiple options to look at in the comfort of their own home, only to keep one and return the rest.
Whichever way it goes, what we do know is that Black Friday is a game changer. Retailers’ logistics supply chain has to work harder than ever. A lost delivery can mean a lost customer, something they can little afford. The delivery chain must be resilient to the peaks in demand that events like Black Friday inevitably bring.
The good news is that with improvements in supply chain technology allowing greater visibility of what is in stock, and where, there are opportunities to improve. And with businesses like Wincanton entirely focused on working in partnership with suppliers to build these developments into the business, retailers who choose to tackle Black Friday head on have every chance of hitting the jackpot.