Has Black Friday had its day?

Are the companies offering Black Friday deals supporting customers by spreading the cost of Christmas or is it just a marketing ploy to encourage unnecessary spending?

In the face of a cost-of-living crisis, traditional events like Black Friday raise critical questions about their relevance and impact. Customer experience director at John Lewis from 2017 to 2021, Peter Cross, says, “Black Friday is a monster. The very worst kind of monster, one that feeds off our very worst human craving – the need to get a deal.”

Cross goes on to say that “no one in their right mind would ever have chosen to create a Black Friday sale a few weeks before Christmas when retailers were traditionally able to sell products at full price.”

The idea of a sale being to clear out the old to make space for the new – not the other way around.

Changes to consumer spending

Consumer confidence is still stubbornly low with the average cost of living around 17% higher than two years ago, and Cross remains pessimistic.

“As we move into Winter and fuel bills start to edge up again, mortgage rates remain high, another devastating conflict breaks out in the Middle East and trust in political leaders to fix the basics or provide any compelling vision for the future continues to evaporate, consumer confidence is unlikely to move in the right direction any time soon,” he warns.

The latest report in the DMA’s Customer Engagement series shows a significant rise in consumers who are influenced by price, leading to a sharp decline in brand loyalty.

According to the report, discounts are an increasingly important driver of consumer demand in a challenging economic climate, with 51% of UK adults using them to trial new brands and products (up from 44%). In addition, almost half (48%) would even stop buying from a brand if they stopped offering deals, suggesting price sensitivity is going nowhere fast.

Caution is also reflected in the latest Institute of Customer Service UK Customer Satisfaction Index, which has fallen to the greatest level since the index began in 2008 and is now at its lowest level since 2015.

“Customers have highlighted that the leading issues organisations should improve,” says Jo Causon, CEO at the Institute of Customer Service,” are making it easy to contact the right person to help, addressing employee behaviours and competence, and website navigation as well as speed of response and having an appropriate level of resource in order to respond.”

She goes on to say that customers are “increasingly discerning and value-driven” and will take their business elsewhere if they feel their needs are not being met. The opposite is also true if customers have a good experience. They are not only likely to repeat their custom but will be willing to spend more when they are there and are more likely to recommend and post positive reviews, she reveals.

Yulia Plakhotnyuk, Founder of Growth Solutions Lab, says, “Consumers may be more mindful and buy on Black Friday with less enthusiasm than before,” while “some brands who support the idea of responsible consumption don’t do Black Friday.”

Sustainable tactics

Suffolk-based coffee company, Paddy & Scott’s is one such company – boycotting Black Friday last year, closing their online shop for the entire four-day weekend.

Paddy & Scott’s CEO, Jonathan Reed, says, “We find Black Friday to be a highly charged frenzy designed to encourage consumers to spend money they don’t have on consuming stuff they probably don’t need, or want.

“At a time when countless people around the UK are struggling to pay their bills, this period of online supermarket sweep doesn’t really connect with our moral compass. Nor does the trend of pushing up prices, only to apply false discounts for the duration of Black Friday weekend.”

As we are in an age of a growing call for more sustainable approaches to commerce – where businesses focus on fair pricing, year-round discounts, and value-driven initiatives, aligning their strategies with the economic realities faced by their customers – Reed offers his alternative.

“We don’t want to be that company always offering discounts, but we do recognise that value is important to everyone, so ours comes in helping us change the world. For all purchases over Black Friday (large or small), we are donating 10 school meals to children in coffee-growing regions. And yes, we absolutely feel other organisations should use this period to shine a light on doing good, not just simply making a quick buck,” he says.

Causon agrees saying, “People increasingly want to see businesses do the right thing, whether it’s sustainability, diversity, or simply doing right by customers” and encourages retailers to focus on two key things – customer care and employee care.

For customer care, businesses need to invest in their staff as well as in supporting technology, according to Causon.

“It’s about a blended approach to service and making sure customers have a broad range of channels to communicate with your business. This is particularly relevant for online retailers, where an over-reliance on chatbots – or indeed, where a chatbot is still learning – can cause customer frustration,” she says.

Employees also face a challenging holiday season – increased hostility against service staff is something covered frequently in the media over the past six months, and it’s something the Institute of Customer Service actively campaigned against under their Service with Respect campaign.

“Retailers need to invest in staff training and support while ensuring that staff have proper avenues to report abuse when they experience it,” Causon advises.

Key insights

MRI Software predicts UK retailers can expect “subdued” Black Friday sales revealing high street footfall will rise by just 5.1% y, compared to a 17.2% in 2022.

Black Friday sales Nick Morgan, CEO of Vudoo, challenges the Black Friday is dead narrative revealing “over half of consumers are set to spend more this Black Friday than in previous years.” He highlights the importance of offering a seamless shopping experience, incorporating real-time pricing updates, stock information, and interactive ads to cater for those Black Friday shoppers who “prioritize value and product quality.”

In the lead-up to Black Friday, business leaders must ensure they are not putting sales ahead of audience trust. According to Sarah Whitfield, CMO of Covatic, to “reach the right consumers at the right time, brands can implement privacy-first strategies that deliver targeted and addressable ads, without neglecting creative execution that truly connects with their desired audiences.”

Some experts aren’t as hopeful. With the cost-of-living crisis hitting hard, Ryan Leigh, Chief Technology Officer at Bringg says “consumer spending this quarter appears to be reined in, and as we edge closer to Christmas, discounts won’t be enough to entice every customer.”
Offering solutions to combat the conservative spending habits and the promotional power of Amazon, retailers should instead “prioritise the customer’s shopping experience to maximise the value of each purchase.”

Long-term thinking like “offering a choice of delivery options and SLAs, provides a more tailored buying experience, increases the likelihood of basket conversion, and stimulates greater customer loyalty” turning a purchase – whether made on Black Friday or not – into future success, he advises.

Old school

Some retailers are taking a different approach. John Lewis launched Black Friday offers earlier than ever and Naomi Simcock, the company’s Executive Director, said, “John Lewis is rewriting the Black Friday rulebook. The idea of it being a one-weekend event is a thing of the past and we’re instead helping our customers with incredible discounts on our amazing range of quality brands all month long.

“It’s a win-win for customers, who we know are buying for Christmas earlier than ever. It means not only can they tick off their shopping list early, but they can also spread out the cost of Christmas.”

Whichever approach they take, as economic pressure continues, retailers must factor in the ever more discerning customer who has less money in their pockets.