Thought Bubble: What does the future hold for Black Friday in the US and the UK?

November 18, 2014
5 min read

Thought Bubble is a regular feature on the Mintel blog highlighting multiple viewpoints on one topic from Mintel’s team of expert analysts around the globe.

With retailers gearing up for this year’s Black Friday we take a look at how the longstanding tradition will fare this year in the US – and if Black Friday has a place in the UK market…

Ali-Lipson-circleAli Lipson, Category Manager – Retail & Apparel, Technology and Automotive

As we enter into another short holiday season, with only 27 days between Thanksgiving and Christmas, retailers are aiming to encourage as much shopping as possible before and during that window. As observed last year, retailers began offering promotions earlier and earlier, and once again the Black Friday “creep” is upon us. Walmart doubled the amount of Black Friday like deals beginning the weekend after Halloween, aiming to get a leg up on the competition. Amazon offered Black Friday deals as early as November 5th and plans to offer different deals daily, every week leading up to Black Friday. Consumers can even sign up for email alerts for the company’s daily deals. Despite the excitement around the holiday season, some backlash against Thanksgiving Day store openings remain.

As evidenced in 2013, many consumers opposed Thanksgiving Day openings, viewing this as a buck against tradition. In response, a number of retailers have decided to stay closed on Thanksgiving this year. Major retailers such as Costco, Sam’s Club, Home Depot, Lowe’s, Dillard’s, Nordstrom, GameStop, DSW, Petco, Marshall’s and TJ Maxx, among others, plan to allow employees and shoppers to spend time with their families and friends on Thanksgiving and focus on Black Friday. Some view this strategy as a way to appeal to shoppers, as they will likely associate positive feelings towards these stores, which the retailers hope will in turn draw them in for holiday shopping.

While Macy’s, JCPenney, Sears, Kohl’s, Gap and Old Navy have already announced Thanksgiving Day openings, we wonder if this will really help their bottom lines. As online shopping continues to rise, consumers can begin their holiday shopping from the comfort of their own homes on Thanksgiving Day or even earlier as retailers have begun offering promotions in early November.

Key themes we expect to see this year include aggressive pricing, faster and free shipping for online orders and retailer exclusives – all in an effort to woo shoppers, particularly as they have become extremely savvy and willing to compare prices. However, Black Friday may be losing its luster as the biggest shopping day of the year as retailers and consumers can take advantage of holiday sales – both in-store or online – in advance of this historically monumental shopping day.

John-Mercer-circleJohn Mercer, European Retail Analyst

This year’s Black Friday is set to be bigger than before. Whilst in 2013 the day generated sales of around £100 million, Mintel estimates that this year, given major retailers like Teso, Sainsbury’s and Shop Direct will be joining in, the event will experience sales growth of between 80-100%.

The event needs to be seen in context: a considerable amount of Black Friday spending will be Christmas shopping pulled forward into late November – and shopper participation remains relatively low: just 15% of consumers told us they took advantage of pre-Christmas promotions last year.

Two themes are emerging in the UK: Black Friday is focused on electricals and it appears to be strongest online (although the latter is in part a function of the former, given the high proportion of electricals spend that goes online).

So for 2014, the online channel is again expected to be a winner from the Black Friday push: Amazon and Shop Direct are both pushing the event hard this year. Backing this up, John Lewis said it doubled its former record for a single day’s online purchases on Black Friday 2013.

Looking ahead, we expect more retailers will be forced to compete, including some rivals of those who have driven the event so far. We also think there’s scope to extend the event beyond its current focus on electrical goods.

Black Friday is likely here to stay but it won’t reach the scale of the January Sales or the summer Sales – the problem is the date has no relevance to UK shoppers as it does to US shoppers: in the UK it’s just another Friday. For retailers, we think its fundamental purpose is to kick-start the Christmas shopping season.

Ali Lipson is a Senior Analyst with Mintel specializing in Retail and Apparel. With over 10 years of experience, Ali is an expert at identifying and analyzing retail and consumer trends and providing actionable insights to clients.

John Mercer is an analyst focusing on retailing in the UK and mainland Europe. He works on Mintel’s retail reports across food and non-food retail sectors, with a particular focus on e-commerce and multichannel retailing. John joined Mintel in 2010, having previously worked for market research and market intelligence firms and in a business school.

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