The latest figures from the IMRG Capgemini eRetail Sales Index have revealed the extent to which retailers slashed prices on Black Friday weekend, with the Index recording tumbling average basket values* for numerous online retail sectors. No more acutely was this felt than in electricals, a key sector for bargain-hunting Black Friday shoppers due to the high cost of some product categories, with the average basket value in the sector falling to £119 in November – a decrease of 18.5% on October 2016 and a staggering 22.7% on November 2015, its lowest value since the Index started tracking the sector in 2006.
Indeed, across all the sectors (excluding Home & Garden) basket values fell compared with the month before. Further to this, five sectors – electricals, footwear, gifts, menswear and womenswear – witnessed decreased average basket values on November 2015.
The heavy discounting helped attract shoppers online, with the Index recording an impressive year-on-year (YoY) growth rate of 22.9% in November, spurred by Black Friday and Cyber Monday**. Across the sectors, accessories soared 60.5%, gifts were up 47.2%, lingerie was up 35.8% and clothing was up 24.0%. The only sector that failed to grow was health & beauty, which was down 4.2%.
Interestingly, when comparing the growth rates in online sales of multichannel retailers with their online-only counterparts, the former performed more strongly. For only the second time this year, the growth in online retail sales made through multichannel retailers exceeded those of the pure plays, by an astonishing difference of 9.9 percentage points.
Across mobile channels, tablets’ resurgence continued with sales completed on the device up 12.5% YoY***. Sales on smartphones continued to perform impressively in 2016, showing no signs of letting up, growing 89.2%***.
Justin Opie, managing director, at IMRG: “Black Friday has become cemented in the retail calendar, but it continues to challenge retailers on profitability. Its image has become heavily linked to discounting and many feel under pressure to slash prices in order to attract shopper attention. One trick is to try to use discounting to pull shoppers in, but restrict it to a selection of products in the hope that they will buy other products either at lower discounted rates or even full price, to help balance out any hit to margins overall. It may be that this approach was more successful in some sectors than others.”
Bhavesh Unadkat, management consultant in retail customer engagement Design, Capgemini: “Given that Black Friday has peaked year-on-year in the last three years, perhaps it’s no surprise that the Index registered such a strong result in November. What we’re seeing however, is that this surge is actually cannibalising purchases across the peak period. Online sales the week before Black Friday fell an average 7%, while Boxing Day sales have dipped consistently over the last three years. This has even impacted Cyber Monday, with the bulk of shoppers making purchases between Thursday and Saturday, with sales then trailing off on the Sunday and Monday. In terms of what this means for retailers, maintaining momentum across the whole peak period has never been more important.”
*Average basket values represent the average value of online purchases in a particular sector
**Note that for all growth values, November 2016 values include Cyber Monday, whereas November 2015 figures did not include CyberMonday due to the way the weeks fell this year
***Excluding travel retailers