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  • Black Friday 2015

Black Friday: Helping or Hindering Brands?

26 November 2015

Retailers across the country are manning the ramparts and bracing the barricades as Black Friday approaches, bringing with it the mobs of savings-crazed shoppers.

Or at least that’s the picture many of us have conjured about the American sales phenomenon introduced to this country by Asda and Amazon.

Scenes from previous years of shoppers resembling a zombie outbreak B-movie don’t help that image.

Whether you’re braving the front lines of the high street, or refreshing your favourite shopping site hoping its creaking servers hold up long enough for you to bag a bargain, the biggest question we have isn’t exactly: “Where are the best deals happening?”, but rather:

Is Black Friday actually worth it?

Any event that offers products like Oral B electric toothbrushes for less than half price, or £250 off a high end Dyson hoover is surely a good thing for consumers.

But is this frenzied flash sale holiday killing retailers and brands?

Asda have opted out of the promotional holiday. Sure, they brought it here in the first place, but can you blame them after last year’s events?

Chief Executive Andy Clarke revealed he wanted to scrap future Black Friday plansnot long after last year’s event, and believes that while it was novel promotion two years ago, “Black Friday in its current guise has gone.”

Asda join Aldi and Lidl in forgoing Black Friday altogether, and many other retailers are reigning it in this year.

Aldi summed up their stance on the event last year, claiming every day was Black Friday on their Twitter account.

Black Friday fever has settled down over the past 12 months, with several big retailers voicing their concerns over the longevity of such a business model, and generally asking to please, just calm down everybody.

Managing Director of John Lewis, Andy Street, is one voice of reason, calling to question the wisdom (not to mention profitability) of bottoming out prices for one weekend only, at the expense of other weeks.

That’s right, retailers, customers sometimes buy your products the other 364 days in the year too.

With many things, the question ‘does it work’ comes down to two major points: does it sell more product, and does it prove profitable?

For Black Friday, there’s no question more sales are made.

The problem comes down to profit. Or the lack of it.

Loss leader tactics always carry risks, and apparently retailers lose more than they gain from Black Friday.

Stuart Higgins in City AM said: “Heavy discounting combined with surging, unpredictable demand can make it difficult to maintain margins and meet customer expectations at the same time.”

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There’s also the argument that by placing so much emphasis on a blockbuster sale, you risk devaluing the brand, as consumers will only want to spend during those precious hours of Black Friday.

If your brand’s reputation is strong, you might risk sullying that reputation by dropping the price point overly so, despite short term gains in sales.

And that’s before seeing shoppers squabbling over your product in the electrical goods isle like two dogs scrapping over a chew toy.

survey by Blue Yonder of 2,000 shoppers had some interesting results. The major findings included:

Three quarters of those involved in Black Friday had a ‘bad experience’

One in four regretted purchases, returning some items

One in five shoppers buys products at discounted rates for the sole purpose of selling them on at a profit.

So, not much chance of brand loyalty developing when you’re buying whatever has the highest percentage discount. Especially when you’re only looking to flog the products down the market a week later.

Of course, most brands have an identity beyond merely price point and functionality. It’s the definition of a good brand: something that people can identify with that goes beyond the product or service itself.

But it’s no surprise luxury brands are steering clear of flash sale tactics, especially if they’re merely flashes in the pan.

However, it’s not just a case of high end brands turning a middle-class nose up at seasonal sales.

There’s nothing wrong with a well-timed promotional discount to boost sales figures.

Just make sure you know WHY you’re doing it, and whether it will help or harm your brand identity in the long run.

If you’re determined to get caught up in Black Friday’s loss-leader antics, even for one weekend only, you’d better make sure you have a good rationale behind it.

When you jump on a bandwagon, you don’t usually have a lot of say in steering the thing.

So, does Black Friday work for retailers and brands?

It doesn’t look like it. Many UK retailers are falling out of love with the American tradition after only a couple of years, and plenty aren’t reporting any marked improvements in profit margins.

John Lewis’ Andy Street may believe that the ‘genie’s out of the bottle’, but it looks like retailers have already used up their wishes.