High Streets Initiative · 7 November 2018

High streets retailers must not join Amazon in a race to the bottom on Black Friday 2018

Black Friday 2018
Shoppers crowd London’s Oxford Street on Black Friday 2017

Independent high street retailers should not join online rivals in a race to the bottom this Black Friday, retail experts have warned.

Rather than pit themselves against online giants like Amazon on 23 November, retailers have been told use their own expertise to focus on the customer, as well as everyday value.

According to David Jinks, head of consumer research at delivery firm ParcelHero, traditional high street stores have no hope of making a profit by matching online sellers, considering the high overheads and operating costs of bricks and mortar retail.

He said: “High street stores have wages and landlord rents to pay; overheads such as heating and electricity to cover, and, of course, exorbitant business rates to meet.

“As such their bottom line is higher than online ‘A stars’ such as Amazon, ASOS and AO.”

Jinks also pointed to B&Q as the latest high street name to shun “ultra-cheap” deals on Black Friday, following the likes of Marks & Spencer, IKEA, Asda, Selfridges, Homebase and Primark.

A ParcelHero report, Retailers Reach the Point of No Returns, revealed a new reality for retailers. Customers now expect to be able to return any item for free, for any reason. On Black Friday, one in four items are returned.

Some 43% of B&Q customers said they often or always returned items purchased on sales days like Black Friday.

Jinks added: “Black Friday shoppers expect rock-bottom prices but also the same level of service and expertise as every other day of the year; and that includes free returns.

“If a retailer has already sacrificed most of their profit pursuing the Black Friday pound, returns will push that into a loss.”

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Black Friday

 

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Black Friday town centre deals also do nothing for customer loyalty, Jinks explained, or create a good impression for consumers.

“Back in 2013 it was Asda who popularised Black Friday on the High Street.  But it’s noticeable that, following near riots in its stores in 2014, the Black Friday pioneer has quit the whole event, saying it had received strong customer feedback that its shoppers didn’t want the pressure of a ‘flash sale’ and prefer low prices throughout the festive season.”

Asda saw huge crowds on Black Friday five years ago. Police said crowd surges were “totally predictable”.

Jinks said: ‘The likes of Ikea, Selfridges and Primark are also riding out the Black Friday storm. And it seems that the tide is with them: in 2017 Black Friday shop footfall was down in the UK 8% YOY; even as online purchases soared 11.7% to £1.4bn.’

“High street retailers shouldn’t seek to join in the Black Friday feeding frenzy when all the figures show that, long-term, it is consistent good value, a great in-store experience, and knowledgeable, friendly staff that are the key to rebuilding high street sales.”

“None of these things can be achieved if the majority of a store’s best deals are thrown into one day, in a crowded, pressurised shopping environment. Town centre stores should ditch Black Friday sales that risk pushing them into the red.’

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ABOUT THE EXPERT

Simon Caldwell is deputy editor at Business Advice. He has a BA in politics and communications from the University of Liverpool, and has previously worked as a content editor in local government and the ecommerce industry.

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