IMRG Black Friday online retail forecast 2017 – and the psychology of the event
IMRG are today revealing their Black Friday peak period forecast, covering the eight-day period Monday 20 – Monday 27 November 2017, when we expect sales and marketing activity to be at its highest pre-Christmas levels.
We estimate that the total spend on UK online retail sites will reach:
• £7.42bn over the Black Friday peak period of 20–27 November 2017 (15% up from £6.45bn in same period 2016)
• £1.35bn on Black Friday (24 November) itself (9% up from £1.23bn on Black Friday 2016)
Black Friday – a psychological retail phenomenon
Every year this event evolves, producing shifts in duration and overall character. This year, the most apparent trend in advance of the event has been the marketing approach that retailers are taking.
In previous years, in the weeks leading up to Black Friday, many sites advertised prominently, often on their homepages, that they would be participating and encouraged visitors to sign up to a newsletter. This year notably fewer have taken that approach, with most opting not to mention Black Friday at all in advance of the anticipated peak week (w/c 20 November).
An obvious driver for this shift is that the idea of ‘Black Friday coming soon’ deters shoppers from making purchases earlier in the Christmas shopping season in the expectation that the best deals are yet to come. We can see evidence of this pre-Black Friday lull from conversion rates (the percentage of retail site visitors that convert to sales) in the IMRG Capgemini e-Retail Sales Index, as visitors are a bit more focused on pre-Black Friday research rather than purchasing in the lead-up – the average October conversion rate for 2013–15 was 4.8%; in October 2016 it was 4% and October 2017 4.4%.
Black Friday was originally a US retail event linked to Thanksgiving, functioning in a retail sense in the same way that the Boxing Day sales do in the UK – there is a big sale to shift the stock that didn’t sell in the lead-up to the big celebration day (Thanksgiving / Christmas Day). Black Friday has been imported to the UK, but it isn’t anchored to anything and this marks a fundamental distinction between the two – the Boxing Day sale is a naturally-occurring phenomena, Black Friday is entirely fabricated.
The way that Black Friday has been marketed in the past, with its promises of huge ‘best of year’ discounts, has led to the term ‘Black Friday’ wielding a strong psychological influence over shopper behaviour.
Andy Mulcahy, strategy and insight director at IMRG, comments:
“Black Friday has created this idea that there is ‘a time’ to shop in the lead-up to Christmas, but this has resulted in a lull in sales activity preceding Black Friday week. Consequently, many retailers are already running discount campaigns well in advance of the Black Friday week to help stimulate sales – we are tracking 210 UK retail sites daily throughout November and, on Monday 13 November (one week before the peak week begins), 80 of them were actively promoting discounts on their homepages. Of that 80, just six were marketed as Black Friday events, three mentioned that their Black Friday event was coming soon and five used the term to run associated, but not actual, Black Friday campaigns – such as ‘the Black Friday warm-up…’ or ‘why wait for Black Friday…’. It’s also become common to use black backgrounds to campaign imagery to imply it’s Black Friday, but without overtly mentioning it.
“What’s interesting is that some of the discounts on offer are already very high – of the 80 actively promoting discounts, 46 had ‘up to 30%’ as their headline discounts with 33 of those marketing 50% and over. This raises some interesting questions; will the deals on Black Friday be bigger than that, or are deals that are just as good already available? Will shoppers realise they can get really good deals throughout November anyway and adapt their purchasing behaviour, or will the psychological power of the term ‘Black Friday’ make them delay spend in anticipation that it’s still ‘the’ time to shop? And finally, based on the data above, does Black Friday now technically last for the whole month of November, just without using the name necessarily?”
What is Black Friday and how has it evolved in the UK?
Black Friday has no cultural significance in the UK – it is linked to Thanksgiving, which falls on the fourth Thursday in November, with Black Friday being the day after. Traditionally in the US, people would go out to stores on Black Friday to get access to heavily-discounted stock that had not sold prior to Thanksgiving. It is similar to Boxing Day here in that respect.
It was imported into the UK by a few large US and US-owned retailers, building momentum between 2010 and 2013. By 2014 it had gained a reputation as being ‘the day’ of the year when shoppers would be able to get the best deals. This put huge pressure on retailers – and their supporting operations – to cope with demand.
In 2015 the trend was for an extension of Black Friday to cover a four-day weekend, to help spread out that demand. Then in 2016 much of the Black Friday-specific marketing and sales activity was concentrated over the duration of a week, which is something we anticipate will happen again this year.
