Retailers should drive the shopper experience around Black Friday in order to build their brands, argues Piers Guilar, executive director of strategy, EMEA at FITCH
With the US-imported shopping holiday known as Black Friday approaching, an increasing number of high street retailers are scaling back on their participation in Britain. It’s time to revisit how shoppers and retailers should really be spending their time on this day.
Black Friday is a day that benefits the shopper, with prices slashed on high-end goods such as electricals. It’s definitely a time where the bargain hunters are in their element. But what does the Black Friday weekend mean for the retailers and is the spike in sales and this year’s estimated £1bn spend just smoke and mirrors when it comes to reaping real returns?
Our research into the past four years of Britain’s Black Friday suggests the short-term sales uplift is a red herring for retailers and has no real commercial value. It simply drives shoppers to open their wallets earlier, but not deeper. A perfect case in point was Argos’ Black Friday shopping frenzy in 2014, which led to a 45% surge in sales, but was followed by a sharp drop off in demand soon after and in the lead up to Christmas.
The time has come for smart retailers to shift their focus from a tactical approach of selling reduced priced goods on Black Friday, to a long-term strategy that drives experience for the shoppers and builds their brand.
At FITCH we see a shift in shopper behavior from showrooming (a term for shoppers who explore in-store and then buy online) to webrooming (a word for shoppers who conduct research online and then carry out purchasing in-store). This is good news for bricks and mortar retailers, but reinforces the need to create continuous experiences relevant to your brand, offline and online.
A good example of a continuous experience is from H&M’s sub-brand called ‘& Other Stories’. It creates the feeling of being behind the scenes at a fashion show, both offline and online, with physical store areas bringing to life the different fashion capitals of the world.
Meanwhile Microsoft’s new flagship in Manhattan is designed to allow shoppers to experience not only the products they can buy, but products and ideas that are on the cutting edge, like the virtual reality Hololens headset and their latest fitness band.
What these retailers are doing in different ways, is shifting from selling to helping people to buy. They are delivering engaging experiences that maintain their brand equity. It is a mindset shift for retailers and highly recommended to remain relevant to shoppers going forward.
Those brands and retailers who continue to invest heavily in Black Friday run the risk of eroding their brand and becoming just another discount store. Heavy discounting, unpleasant retail experiences, disappointment, late fulfillment and high returns are a perfect storm for erosion of brand equity. Last year on Black Friday, both Curry’s PC World and Tesco experienced such an overload in web traffic that their websites were down for several hours. This does nothing for a retailers’ brand reputation. There is however opportunity for a brand to create a more positive day that is not about discounting, something more true to their brand that offers a unique and unforgettable experience. For example, imagine the right high street store launching a fun and frivolous shopping day on April 1?
In summary, the long-term winners will be the smarter, bolder brands offering a continuous experience online and in-store, affording their shoppers a seamless stream of access to physical and digital information. This will allow shoppers to make a more educated purchase decision, while simultaneously offering them a rewarding and unique experience in-store. Whether Black Friday as we know it continues in Britain, albeit with no participation from big-name retail brands, or if the one-day frenzy becomes diluted across other discounting days in the run up to Christmas, we at FITCH find Black Friday to be well past its prime.