Blog: Retailers hoping for Black Friday festive cheer

Kirsten Partridge, partner and real estate specialist at law firm CMS assesses the significance of the new retail event for an embattled British high street

The biggest sales day of the year will be upon us tomorrow with many UK retailers offering a range of Christmas bargains to consumers. Like it or loathe it, Black Friday is becoming an increasingly popular annual event in Britain. Imported from the US a decade ago, for many of us it now signals the beginning of the annual festive shopping season.

Black Friday and Cyber Monday, the more recently created online shopping event which takes place three days later, are once again expected to generate billions of pounds in sales. The UK is following a trend developing in the US where, according to real estate and investment management specialists JLL, over 54 per cent of consumers will have started their Christmas shopping by Cyber Monday. These promotional events could also determine whether many of the UK’s hard-pressed retailers have any likelihood of feeling any festive cheer this year.

There’s no doubt that both Black Friday and Cyber Monday have been helpful to many retailers. Last year John Lewis reported one of its most successful days, including the chain’s busiest-ever hour of online trading during Black Friday. Meanwhile Argos had more than two million visitors to its website after launching its Black Friday deals on the previous night.

While Black Friday sales are forecast to increase a further three per cent this year, it’s Cyber Monday which continues to deliver the really impressive growth stats for retailers with website visits by UK consumers rising by seven per cent year-on-year. This represented an extra 12 million visits, amounting to a total of 195.7 million Cyber Monday visits in 2017.

Given the spike in Cyber Monday activity and the overall rise in online shopping across the rest of the year, it is not surprising to see traditional retailers increasingly focusing on their online channels rather than physical stores as they target Christmas consumers.

M&S has continued its programme of store closures to put more resources into web-generated sales, including introducing online orders to their food business. Last month the company’s CEO Steve Rowe admitted how M&S’s website and online fulfilment capability “remain well behind the best of our competitors”. Only a fifth of the chain’s clothing and home sales come from the website which has prompted the appointment of Loblaw Digital senior vice-president Jeremy Pee. He will join the company next month, tasked with leading the digital conversion of the business and turning around its data and loyalty programmes.

Meanwhile clothing retailer Zara announced last summer that it would be converting 2,000 stores in 48 countries to ensure they were equipped to fulfil website orders more efficiently and be better able to compete against online retailers. This is part of a wider trend known as ‘ship from store’ where traditional bricks and mortar retailers are seeking to use their networks of stores to offer same day (and sometimes even two hour) delivery on goods ordered online. They believe this will be an effective means of competing against online retailers which ship their goods from centralised and often more remote warehouses.

We are also seeing more sophisticated use of online data capture from traditional retailers. As part of this year’s Black Friday offering Adidas is offering exclusive deals that are only available through its app, enabling the sportswear retailer to capture more customer data so it can better target future online marketing activities.

As we head into Black Friday and Cyber Monday - which are now sitting in the midst of a near fortnight of Christmas-focused online and instore shopping promotions – these new trends offer some hope for the future of the high street. While we are likely to see a continued diminution in the physical presence of many retailers, their increased funnelling of customers towards their online platform and use of their remaining stores as quick turnaround delivery bases means they may have a brighter and long term future.

By combining an enhanced online service with “instore only” offerings through events like Black Friday, many bricks and mortar retailers could be finding the right formula that delivers higher sales and enables them to compete in a changing marketplace.