Category Opinions, Marketing

Retailers are fighting back against Black Friday – has the bubble burst already?


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Black Friday is upon us, which means most retailers are falling over themselves to slash prices and capitalise on the spike in sales created by the epitome of consumer holidays. But why are more retailers choosing not to take part in the price war this year? Is the short-term benefit to sales no longer worth the potentially long-term negative effects? Does Black Friday discourage brand loyalty and harm the overall perception of a brand?

Originally an American tradition, Black Friday falls the day after Thanksgiving Day and effectively marks the start of the Christmas shopping season. It was brought to our shores by Amazon in 2010, offering discounts to rival those seen in the US, and it didn’t take long for other British retailers to jump on the bandwagon. However, since perhaps peaking in 2014, the concept has been subverted or discontinued by many brands in an attempt to lessen the disruption to their trading patterns, as well as the anti-competitive culture the holiday creates.

The warning signs are already there for Black Friday, so if you’re looking for a cheap TV you might want to act quickly. According to Mintel, Black Friday 2015 was weaker than 2014 but still pulled sales forward from Christmas, causing a slump in retail sales in December. This type of volatility and unpredictably cannot be sustained by many retailers, who rely on a predictable and strong festive period.

The message that came out strongest in Mintel’s consumer research from 2015 was that retailers have undermined their own credibility through the amount of discounting that occurs, advising brands to distance themselves from this and restore pricing integrity. Heavy discounting plays a major factor in undermining people’s trust in retailers. The majority of customers think there is no point paying full price for gifts when there are inevitable discounts through promotions in the run-up to Christmas.

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Already, brands are beginning to turn Black Friday on its head, with a rising tide of Anti-Black Friday sentiment. With a generation of consumers who want to engage with brands and a rise in experiential marketing, online channels allow businesses to subvert the practice and differentiate themselves from the ‘norm’.

Fat Face, for example, have taken a different approach by pledging over £100,000 of Black Friday profits to charities, stating that shopping with them helps others. Lush Cosmetics have not celebrated the holiday once, instead releasing a charitable bath bomb this year titled ‘Error 404’ to raise funds for AccessNow, a digital rights organisation. “It feels pertinent to disrupt consumers and help raise awareness about a topic most people don’t think about” said Jack Constantine, Chief Digital Officer at Lush Cosmetics.

Meanwhile, the food chain Pieminister are opening pop-up shops at 10 of their locations in the U.K. as part of “Black Pieday”, where the company will give away surplus stock from its freezer in exchange for a donation to the housing charity Shelter. “Black Friday has connotations of spending lots of money on stuff you might not need, so we saw a chance to turn it on its head and do some good” said a spokesperson from Pieminister.

The popular card game Cards Against Humanity, which is centred on a risqué and offensive sense of humour, even promote an anti-sale on Black Friday. In 2013 they raised their cost by $5, yet still experienced a spike in sales. For Cards Against Humanity, Black Friday represented a chance to be creative with the concept whilst remaining true to their somewhat perverse brand values.

However, many retailers are still participating in the Black Friday price war. This year Currys, PC World, Argos and Amazon are just some of the brands slashing prices, often extending sales beyond Friday 25th November. But haven’t we seen this all before? Isn’t this just another example of predatory pricing from market leaders to cut into the market share of smaller retailers?

The inevitable counter to this is for smaller retailers to employ non-price competition, where they distinguish themselves with a premium service or level of quality, rather than price-point. Traditionally, this approach was product-led but we are now seeing it with brands themselves; Fat Face, Lush and Pieminister are establishing themselves as more trusted, benevolent brands through their approach, in opposition to the commercialised self-interest of the Amazons of this world.

So, with many retailers fighting back, what is the future of the Black Friday price war? The big players will most likely continue with aggressive discounting, whilst other retailers are forced to use market insight to creatively and effectively subvert the tradition. Though some panicked and immediately jumped on the Black Friday bandwagon, many are realising that the spike in trading is not the Holy Grail of store-based retail that many thought it could be. The short-term gain does not always outweigh the long-term effects, which is where an effective marketing and branding strategy can make the difference and save you from cannibalising your own profits.

And that never makes for a nice Christmas now, does it?

Image credit: Digital Spy