1.
NOVEMBER 2015
A Very British
Black Friday
T H E R E A L
W I N N E R S A N D
L O S E R S

2.
01 / A VERY BRITISH BLACK FRIDAY The real winners and losers
EXECUTIVE
Summary
Black Friday is perceived as a frantic one-
day sale, when shoppers lose control in
the fight for bargains and retailers move
mountains of stock as they get a good
chunk of Christmas sales in the bag.
This study, looking specifically at Black Friday
in Britain, shows that the reality is somewhat
different. There will always be a small
proportion of shoppers who get a kick out
of grabbing a bargain, no matter how hostile
the experience, but the majority are sensible
human beings who are in control and able
to make their own decisions. Moreover,
they are happily buying online, at home.
The losers are the retailers. Black Friday
discounts drive shoppers to open their wallets
earlier, not deeper, so the idea that they are
a major boost to UK Christmas spending
is flawed. Given that price reductions also
erode brand equity, the commercial case
for retailers to participate is weak. So who
wins? Everything points to the multi-brand
online discounters, specifically Amazon. It
was Amazon who introduced Black Friday to
the UK five years ago and, this year, 84%1 of
shoppers say they will do their Black Friday
shopping with the online giant. It is no wonder
a backlash has begun, with a small number
of retailers opting out of Black Friday and
using the opportunity to tell a positive
brand story.
We predict that Britain’s Black Friday will
become the domain of the discount retailers
and turn into just another discounting day
in the run-up to Christmas. We see more
fabricated shopping days arriving on our
calendars, too. There is an opportunity here
for a brand to create a more positive day that
is not based on cheaper pricing and which
offers a unique experience that is true to
the brand. For example, imagine someone
like Primark launching a fun and frivolous
shopping day on 1 April next year.
The long-term winners will be the brands
offering a continuous experience online and
in-store. Shoppers are spending more time
online, making decisions and narrowing down
their choices before buying in-store. This
growing trend of ‘webrooming’ means that
brands need to expand access to information
online, while creating rewarding and unique
physical experiences in-store. However,
it does require a major shift in mindset for
retailers: from selling to helping people buy.
Contents
–
1.0
SHOPPER
BEHAVIOUR
p.02
2.0
THE BUSINESS
CASE
p.03
3.0
DEFINING
THE FUTURE
p.04
APPENDIX
p.05
More slippers and tea cups
than supermarket punch-ups.
Heavy discounts steal
Christmas sales.
Who wins in Black Fridays
to come?

3.
02 / A VERY BRITISH BLACK FRIDAY The real winners and losers
SECTION 1.0
Shopper Behaviour
Here is the reality: the majority of shoppers
in Britain embarking upon Black Friday will
be in their dressing gown, holding a cup of
tea. No queues, no hassle and no stress. The
only discomfort they are likely to experience
is forgetting their slippers as they settle down
at their computer on a slightly chilly
November morning.
A Retail Week poll of shoppers who made
a purchase on Black Friday 2014 revealed that
58% did so via a computer at home, while
29% used a mobile device and opted for home
delivery. Scaremongering stories of shoppers
wrestling in the aisles and police being called
serve only to remind the great British shopper
of what they should do their best to avoid.
The truth is, Black Friday is a positive experience
for shoppers. The same poll also showed that
96% of shoppers who bought on Black Friday
were either very or quite satisfied. Not exactly
shopping pandemonium2.
While most Black Friday bargains are available
online, there are plenty of in-store-only deals
to be had. These loss leaders are used to drive
awareness and traffic: 34%3 of Black Friday
shoppers visited a physical store last year.
So what is it that drives these individuals to
take on the much-hyped Retail Armageddon?
Björk makes an interesting case in her song
Human Behaviour:
If you ever get close to a human
And human behaviour
Be ready, be ready to get confused
There’s definitely, definitely,
definitely no logic
To human behaviour
But yet so, yet so irresistible
And there’s no map
And a compass
Wouldn’t help at all
The lyrics make a simple point: that we cannot
rely on rational, logical ideas to anticipate human
behaviour. To get under the skin of people and
understand how and why people shop, we need
to understand their shopping mindstates.
We know that 75%4 of Black Friday shoppers
start the day with a strategy. They have already
been dreaming and exploring online (cf FITCH
paper on The Joy of Shopping), they know what
they want and they have located it. Now it is time
to buy it. For the majority this is online but, as we
know, one-third of shoppers still go to a store.
The keenest queue up in the cold, waiting for the
doors to open; for the rest it’s the battle to get
there before stocks run dry.
This behaviour is FOMO, the fear of missing out.
This acronym was coined a couple of years ago
to describe a psychological disorder caused by
the onward march of technology, but its use
is certainly appropriate for bargain shopping
within a time-limit.
Black Friday originates from the US and has
evolved from bargain shopping to a major
lifestyle event.
Now that many retailers open up on
Thanksgiving Day, the appeal of Black Friday
as a day for deals appears to be waning.
However, the appeal of spending the day with
family and good friends is alive and well, from
families in matching outfits to special breakfasts
and sleepovers the night before. It is more about
tradition than transactions over there. The
introduction by Amazon of Prime Day5
in July this year indicates that the
world’s biggest e-tailer is trying
to stay one step ahead.
Over in China, of course, there’s
an example that dwarfs the lot.
Homegrown online retailer Alibaba
has been making billions since 2009
by turning an unofficial holiday
called Singles’ Day into the biggest
online shopping day of the year6.
As Alibaba eyes international
expansion7, we could see yet
another discount day being
added to our calendars.
Amazon only introduced Black
Friday to China in 2014, so it’s
still too early to tell how this new
‘holiday’ will catch on. What
is clear, though, is that there’s
room for more retailers to get
in on the action, since growth
in retail sales for most Asian
nations is projected to be higher
than the global average8.
So, Black Friday is a
fabricated discount day in the
UK and certainly no holiday unless the Queen
decrees it. Clearly it is not for everyone.
1.1
STORM IN
A TEA CUP
1.2
FOMO
AFFECTS
THE FEW
1.3
NOT FOR
EVERYONE
PURCHASE POINTS
SHOPPER SATISFACTION
Via computer at home
Via mobile device
Very or quite
58%
29%
96%
SHOPPER MINDSTATES
34%
of shoppers
visited a physical
store on Black Friday
DREAMING
EXPLORING
LOCATING
SHOPPING GUIDE

4.
03 / A VERY BRITISH BLACK FRIDAY The real winners and losers
SECTION 2.0
The Business Case
2.1
BLACK
FRIDAY STEALS
CHRISTMAS SALES
2.2
EROSION OF
BRAND EQUITY
2.3
THE
BACKLASH
Yes, there are signs of a potential backlash.
The most interesting example is from America,
where REI outdoor stores are shutting their doors
and giving staff the time off. They recognise the
importance of keeping staff happy in creating
long-term sustainable advantage. The Harvard
Service-Profit Chain (Diagram 2) is based upon
this premise. Their empirical evidence proves
that happy employees bring happy customers
who in turn bring more profit. REI embraces this
with messages such as, “Get outside and enjoy
the day.”
Ocado chairman Lord Stuart Rose described
Black Friday as an “extremely bad idea”. He said
that a number of retailers have now decided that
“their margins have not improved, they’ve been
eroded. They’ve gotten themselves in a hole that
they’ve got to get themselves out of this year”18.
We believe the smarter, bolder brands
will abstain.
Black Friday sales are predicted to reach
£1 billion in the UK this year, up from £810
million in 2014. So surely it must be good
news for retailers?
Actually no. Black Friday discounts drive shoppers
to spend earlier rather than to spend more. In the
UK, £1 in every £3 of transactions is conducted
through Visa’s payment system. Their data from
last year shows that while overall spending
increased by 2.1%last November compared
with the same month a year previously, in the
December it rose by just 1%. And on a month-by-
month measure, it gained by 1.7%in November but
then fell by 2.8%9 in December.
Black Friday is robbing Peter to pay Paul.
John Lewis consumer electronics sales last
Christmas (Diagram 1)10 illustrate the point.
Black Friday activity increased sales at the
expense of Christmas sales.
Despite Argos’s Black Friday shopping frenzy
in 2014, which led to a 45% surge in sales,
there was a sharp drop-off in demand in the
following weeks. Like-for-like sales grew just
0.1%, compared with the estimated 2%in
the 18 weeks to 3 January. As a direct result
of Black Friday discounting, Argos missed its
sales forecasts and recorded reduced profits.
Homebase sales for the 2014 Christmas period
were up only 0.6%, despite heavy Black Friday
promotion. Its shares fell 7% at this news11.
Marks & Spencer clothing and homeware sales
were down 5.8%12 in the Christmas period
of 2014, and there were similar stories amongst
the supermarkets: Sainsbury’s sales for this
period were down 1.7%13, Tesco’s were down
0.3%14. Asda’s were down 2.6%15, so not a great
surprise when the supermarket chain announced
in mid-November that it would not participate16.
Marks & Spencer CEO Marc Bolland blamed
Black Friday discounting for much of the drop
in sales. Mothercare, by contrast, held out
against the Black Friday frenzy.
JOHN LEWIS CEO
ANDY STREET
“It is not in the industry’s interest to
continue to grow the pace of Black Friday
at the expense of other weeks… You want
more steady trade and obviously you want
more of it at full price…”
Average weekly
sales for year
14.7% down in
the last 2 weeks
6.8% rise
on electrical
41% rise
during Black
Friday week
WEEK 1 WEEK 2 WEEK 3 WEEK 4 WEEK 5 XMAS
BLACK FRIDAY STEALS
CHRISTMAS SALES
PRIMARK CEO
GEORGE WESTON
“Black Friday in the UK is pointless…
It seems to have arrived online and
although we did not run promotions
last year, we saw a lot of people on high
streets... But all it seemed to do was
bring forward sales, so the week of Black
Friday was good and the following week
was bad and if you average them together
sales were fine…”
MOTHERCARE CEO
MARK NEWTON-JONES
“If you discount, you are doing that for
people who are going to shop anyway.
Black Friday was really hyped up this
year but I think it is going to be muted
next year. People will look at their figures
and see they sold product at a discount
that they could have sold at full price. We
got the footfall and we didn’t discount:
we grew sales and margin.”
Heavy discounting, unpleasant retail
experiences, disappointment, late fulfilment
and high returns are a perfect storm for
erosion of brand equity.
Last year, on Black Friday, Curry’s PC World
experienced web traffic that increased fivefold
from 2013. At midday, customers queued for
up to an hour, listening to the message, “We’re
really sorry that the huge demand for our deals
means you’re having to wait.”
At Tesco, deals went live at midnight but the
website was down for several hours. For M&S,
delivery times had to double. Oasis’s Black
Friday 2014 resulted in a 50%17 return
rate from all orders.
So the commercial case is weak for retailers,
the experience can be poor for shoppers and
brand equity is likely to be eroded. Surely
there must be a backlash?
SERVICE
ADDED VALUE
PROFIT AND
GROWTH
EMPLOYEE
SATISFACTION
CUSTOMER
SATISFACTION
DIAGRAM 1
THE HARVARD
SERVICE-PROFIT CHAIN
DIAGRAM 2

5.
3.1
BLACK FRIDAY
WILL BECOME
THE DOMAIN OF
DISCOUNTERS
3.2
MORE
FABRICATED
HOLIDAYS WILL
BE CREATED
3.3
WINNING
RETAILERS
WILL OFFER A
CONTINUOUS
EXPERIENCE
We predict The British Black Friday will
become purely the territory of retail
discounters. It will turn into yet another cut-
price period in the run-up to Christmas.
Black Friday online will grow and spread. Last
year, Cyber Monday appeared and this year, it
looks as if some online retailers are extending
Black Friday even further into weeks.
The trend for artificial shopping holidays
will continue.
As an example, Amazon introduced the Amazon
Prime Day on 15 July this year. There is a strategic
opportunity here for bolder brands and retailers to
get out of Black Friday type discounting days and
take control, offering a unique shopping day that is
a positive fit with the brand – for example, the idea
mentioned earlier of a playful Primark shopping
day on 1 April.
The shift from showrooming to webrooming
is good news for those retailers who act upon
it, ensuring a continuous experience between
online and offline.
Showrooming: Shoppers explore in-store to find
exactly what they need, and then go home and
buy it more cheaply online; 73% of shoppers
have showroomed in the past six months.
Webrooming: Shoppers research exactly what they
need online, and then go into the store, fully armed
with information, to buy there and then; 88% have
engaged in webrooming – an emerging trend that
benefits brick-and-mortar retailers19.
The long-term winners will be the brands that can
offer a fluid and rewarding experience online and
in-store. Success will require increased access to
information online, together with a gratifying and
unique physical experience in-store. It also requires
a major shift in mindset: no longer are retailers
selling, but they are helping people buy.
SHOWROOMING
Shoppers explore in-store to find exactly
what they need, and then go home and
buy it more cheaply online.
VIVID TURNS DIY INTO “DO-IT-WITH-
ME” OUT OF STORE AND IN HOME
–
FITCH reinvented home renovation with
VIVID Homes for B&Q in China online
and in-store. Trained coaches guide from
start to finish and a 4D simulator allows
the new home to be experienced before
work commences.
www.fitch.com/work/vivid/
WEBROOMING
Shoppers research exactly what they
need online, and then go into the store,
fully armed with information, to buy
there and then.
of shoppers
in past 6 months.
of shoppers have
engaged in this trend.
73%
88%
DELL’S TECHNOLOGY “PARK”
INSPIRES CREATIVITY
–
At one of the world’s largest consumer
electronics trade shows, FITCH designed
immersive product zones for Dell where
thousands of visitors could unwind, try new
technologies and create video simulations,
butterflies and music tracks.
LEGO GIVES PEOPLE ROOM TO PLAY
AND PURCHASE
–
LEGO brand retail stores stay true
to the toy company’s founding philosophy
‘play well’. Sales increased 30% when
we cleared away 25% of the merchandise
to create more space to play.
www.fitch.com/work/lego/
04 / A VERY BRITISH BLACK FRIDAY The real winners and losers
SECTION 3.0
Defining the future

6.
05 / A VERY BRITISH BLACK FRIDAY The real winners and losers
Claire.Belzidsky@FITCH.com
+44 (0) 20 7479 0471
fitch.com
linkedin.com/company/fitch
twitter.com/FITCHdesign
slideshare.net/FITCH_design
facebook.com/FITCHglobal
About FITCH
–
Designing the future. FITCH transforms
consumer experience and accelerates
business success. We deliver seamless
solutions by combining the physical,
human and digital elements of a brand
to create unique experience signatures.
FITCH is a leading global retail and brand
consultancy with an integrated offer of
strategy, design and implementation, which
enables us to deliver across all touchpoints.
We do this for clients that include adidas,
Carphone Warehouse, B&Q, Dell, Hamleys,
Land Securities and Philips. FITCH is a WPP
company (NYSE).
www.FITCH.com
FOR MORE INFORMATION
PLEASE CONTACT
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2
3
4
5
6
7
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Microsoft & Retail Week report,
Planning for peak: 2015 and beyond
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Planning for peak: 2015 and beyond
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http://money.cnn.com/2015/07/06
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home/20150921005268/en/Market-Track
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VgAAk86BDlc
SECTION 1.0
SECTION 0.0
9
10
11
12
13
14
15
16
17
18
http://www.telegraph.co.uk/finance/
newsbysector/retailandconsumer/11338423/
How-Black-Friday-is-changing-Christmas-
spending.html
http://www.theguardian.com/
business/2015/jan/05/john-lewis-boss-
says-rein-in-black-friday
http://www.theguardian.com
/business/2015/jan/15/black-friday
-argos-homebase-sales
http://www.theguardian.com
/business/2015/jan/08/marks-spencer
-suffers-christmas-sale-slump
http://www.telegraph.co.uk
/finance/newsbysector/retailand
consumer/11329530/Sainsburys
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-war-hurts-Asda-Christmas-sales.html
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/5071748.article
SECTION 2.0
19 http://www.interactionsmarketing.com
/news/webrooming-now-popular-among-88
-percent-of-shoppers/
SECTION 3.0
Appendix
–