The document discusses predictions and preparations for Black Friday 2016 in the UK retail industry. It provides background on the origins and growth of Black Friday/Cyber Monday shopping events. While they drive huge sales, some retailers criticize the events for forcing early discounts and returns that impact holiday season profits. Preparing websites, staffing, and managing customer expectations across channels is key to success. The impacts on retailers are mixed, as missing out can lose sales, but over-reliance risks distorting customer spending habits.

1. The bedlam of
Black Friday 2016:
Predictions, preparations and what to expect

2. With only a matter of weeks to go until Black Friday – or as some predict a Black Five day week – retailers
need to prepare for the shopping extravaganza.
So, what is Black Friday & why should you care? Black Friday has been a big deal in America for decades. But
five years ago, the shopping event didn’t even exist in the UK. It only really took off in the UK in 2013 (largely
in response to the likes of Amazon, and, Walmart-owned, ASDA championing it).
The Black Friday deals period is now bigger than Christmas. It’s the day, weekend and increasingly week when
retailers (specifically electronic retailers) slash the prices of pretty much everything.
It takes place the day after Thanksgiving – this year on Friday, November 25. Black Friday signifies a shopping
frenzy. Almost all retailers offer huge discounts to attract hordes of shoppers. And customers love it - people
queue for hours before a store is opened (or online), to grab the bargain of the year.
Though Black Friday is traditionally a high street event – characterised by store discounts so big that they
cause shopper fisticuffs that end up on YouTube – these days it’s increasingly online as well.
On Black Friday 2015, UK online sales grew by 36% year on year to £1.1bn. And BT Expedite reports that UK
retailers received 16.5% more online orders over the Black Friday period in 2015 than they did in the same
period in 2014, with revenues also up by 19%.
It’s safe to say that Black Friday has rapidly become the biggest shopping day in the UK - with approximately
£2bn spent in shops and online in just 24 hours last year.
Indeed, Amazon said that at 9.10pm, Black Friday 2015 became its biggest sales day ever in the UK with over
seven million items ordered (that 86 items per second).
Across the last two Black Fridays, sales records were smashed, websites crashed and shoppers snapped-up
deals. The last two Black Fridays have been the two biggest days in retail history – that’s how big it is!
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3. How is Cyber Monday connected?
So, Amazon was a big winner last year. Why? Amazon created a fortnight of deals, by spreading discounts far
beyond Black Friday. This was much longer than other retailers that simply spread deals over weekend –
culminating in so called Cyber Monday.
Cyber Monday is the Monday immediately after Black Friday (this year falling on November 28). It started
as an attempt to create an online equivalent of Black Friday’s high street extravaganza. Most retailers offer
deals from Black Friday through the weekend, but many announce exclusive internet-only deals on Cyber
Monday. This results in a 4-day weekend of bargain deals both in store and online. Cyber Monday became
a key retail trend here in the UK in 2015 (and likewise, the extension of deals over a longer time frame, like
Amazon, is set to be a key retail trend this year). Of course, with Black Friday and Cyber Monday cramming an
entire weekend between them, it’s expected shoppers will spend as much as £2.2bn this year on tech, clothes,
shoes, white goods and everything else (that’s 15.9% more than 2015).
Retailers must prepare for Black Friday 2016. Christmas starts properly on November 1st, says Karen Harris,
Managing Director, Intu Digital – the UK’s largest shopping centre owner: “We don’t isolate Black Friday, we
plan for the full Christmas Period and beyond, starting November 1st, building in Black Friday, Christmas and
the January sales - it’s a whole period of activity.”
With help from Karen Harris, here we’ve pulled together five key pieces of advice to capitalise on the sales
potential of the shopping phenomenon that is Black Friday...
1. Rigorous tests:
Black Friday is exceptionally busy, so retailers must test their core systems to identify any potential
breaking points, says Karen. This will help retailers to understand how to cope with a “break down”
scenario if faced with an overwhelming influx of traffic on the day (or surrounding weekend)
2. Drip-feed marketing:
Peak traffic on Black Friday is predictable. But the surrounding days are also crucial. Retailers will
benefit from drip-feeding customer deals to keep them shopping across the peak right through to
Cyber Monday. And, of course, customers expect you to engage with them on their channel of choice,
be it via email, mobile or social media. A gradual, multichannel approach will meet expectations and
reduce strain on infrastructure and fulfilment teams
3. Prepare the entire business:
The entire business (people, processes and technology) needs to be aligned in the build-up to, and
on Black Friday. Consistent and reliable communication between technical operations and sales/
marketing teams is an absolute must. Now is the time to make sure that everyone is fully aware of the
plan for peak trading – not just in silo, but across the entire business. Specifically, everyone must be
aware of marketing campaigns and sales promotions (deals) in advance so that all teams can prepare
for the influx of traffic
4. Make a plan B:
It is very difficult to make Black Friday 100% fail-proof. But it’s not too late to put some basic safety
nets in place. For example, build-in an online queuing system – where customers are placed in a line
to access the website – to help control the sudden surge and reduce the chances of crashing.
Last year some of the UK’s biggest shopping websites struggled to cope with the volume of online
orders, with John Lewis, Argos, Boots, Tesco and Game all crashing or suffering slow loading pages.
Similarly, think carefully about your social media strategy. Long gone are the days where you can
just ignore a complaint. Customers expect you to monitor complaints constantly and respond
immediately. If something goes wrong on Black Friday, it’s best to have a plan in place, or suffer the
inevitable grilling on social media.
Equally, if a customer says something positive, a well thought-out social media response is a great way
to show your customers that they really matter, and other potential customers that your brand has
a personality. In sum, it’s smart to identify the risks that may arise on Black Friday and create a cheat
sheet of solutions. This ensures that appropriate and timely action can be taken by the relevant team
(...whether it’s IT ecommerce, marketing, social media or PR).
5. Don’t forget your front line:
Make sure that staffing plans are set. These should include everyone involved in peak operations (i.e.
vendors and suppliers as well). A clearly communicated plan will ensure that everyone is aware of
their role and responsibility across the weekend
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4. Beyond the Black Friday madness, setting-up processes and team structures to put customers first is
becoming a fundamental shift across many retailers.
Hollie Napier, Central Operations, Sainsbury’s | Argos says: “It is the most important thing in my mind for
delivering that WOW experience and gaining customer loyalty. We are extremely focused on simplifying
tasks/communications for colleagues to free up there time so they can spend more time with their customers.
We also have a customer fist programme encouraging office based colleagues to spend more time in stores
supporting at key times of the year.”
Hollie adds that collaboration is the key. “You need to have a collaborative working environment where it is
encouraged to work together and not against each other which is what having conflicting KPIs can drive silo
working. Having frontline experience with your customers is incredibly valuable and that’s where you will get
the majority of your answers to business challenges.”
Jonathan Newton, Head of ecommerce, Wilko, agrees, stressing the importance of fully understanding digital
customer expectations, and then reflecting those in organisation design. Two key questions retailers need
to consider include: How should digital teams be structured... as a standalone function, fully integrated or
partially integrated? And how do internal resourcing teams keep up to date with moving trends in digital
recruitment needs, roles and expectations?
To find out how retailers and brands are embracing digital transformation to thrive in today’s competitive
environment visit – https://aka.ms/blackfridayretail
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5. Is Black Friday bad for business?
Black Friday is brilliant for customers. With Christmas just around the corner, prices drop at the perfect time.
It’s an opportunity to buy that laptop you’ve wanted all year (and your Dad’s Christmas present on-the-
cheap). But for retailers it’s much more problematic.
It’s safe to say that retailers hate Black Friday. It forces them to discount products, and therefore trim their
already slim margins, at a time when customers are more than likely to spend money for Christmas anyway.
Not to mention forcing a drastic rethink of stock levels, logistics and staffing – all at a time when retailers
would much rather prepare for Christmas.
So… Is it really wise to drop prices at the start of the busiest shopping period of the year? Has the event
distorted Christmas spending, pulling it forward at a time when retailers traditionally charged full prices?
Many retailers, and retail analysts, suggest that Black Friday isn’t wise at all.
A big chunk of the shopping hordes will only be going to the stores to get the bargains.
They won’t be spending on anything else, or be back when the sale is over. This is not ideal
if you are looking to build customer loyalty (and repeat business). Across Black Friday 2014,
marketing experts, Verdict Retail, showed there was no evidence that the event stimulated
demand. In fact, by discounting products, retailers only sold stuff they would have sold
anyway but for less money. In this light, retailers have to ask: Is it right to concentrate so
much trade in one deal period?
Last year, Asda named “customer fatigue” as one of the reasons they held back from Black
Friday, saying customers would prefer better offers over a longer period. It’s an interesting
point. If you are a loyal Asda customer all year round, you would likely ask yourself: Why
must I face the crowds on Friday, why can’t I get the same price on Thursday?
Black Friday doesn’t always show high street shopping in its best colours. We can all picture
the news images of customers charging into stores, fisticuffs to grab a bargain and the
police separating fights for the last iPhone. If you invest a pretty penny in Christmas
marketing, the last thing retailers want is to be seen as the place where fights break out.
So again, like customer fatigue, you run the risk of putting-off existing customers, and not
attracting new ones.
Indeed, research by shopping analysts Springboard and Footfall highlights a drop in high
street shopper numbers of 4.5% and 4.0% respectively in 2015. Some shoppers may have
stayed at home because the bargains weren’t exciting enough, while others may have been
put off by the possibility of getting punched.
Another big danger is the returns process. Last year £600mln worth of stock bought on Black Friday was
caught up in the returns process and not back on shelves in time to be sold before Christmas. These items
could have been sold at full cost after Black Friday so the opportunity cost for retailers can be huge.
Hollie Napier says: “Pressure on systems on Black Friday is always a concern but we have taken lots
of learnings from previous years to improve the service we plan to give this year.”
Finally, some analysts say Black Friday has simply distorted Christmas spending – pulling it forward at a time
when retailers traditionally charged full prices. December has gone from being one of the best months,
to being one of the hardest. Indeed, last year UK spending in December dropped for the first time in six
years (This is Money.co.uk), the assumption being that everyone spent all their money in November when
everything was cheaper.
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6. It’s a tricky time for retailers as discounting can be negative in terms of economic strategy and brand equity,
says Karen Harris.
“Black Friday is particularly tricky as there is a customer expectation - as it’s a gifting period by the retailer
to their customer with very special deals. Retailers often discount on items, no available at other times of
the year, it’s something the retailer has really, really thought about to go the extra mile for the customer
around Christmas. So in that way it can really help retailers’ relationships with customers, but at the same
time you are still discounting - so whether or not that customer would have bought something at full price
we don’t know.”
All in all, this sparks one of the most interesting questions about Black Friday: Has it created new demand or
just brought forward people’s Christmas shopping by a few weeks?
So what’s the cost of missing out?
ASDA may have brought Black Friday to the UK, but, as touched upon previously, it decided not to take
part in 2015. Instead, it offered more sustained discounts across the Christmas shopping period.
The result? Like for like sales in the 13 weeks from Black Friday to January 1 were down 5.8% (Asda’s
worst quarterly sales ever.) ASDA reported that 0.4% was due to not taking part in Black Friday. Although
0.4% doesn’t sound like a lot, with your quarterly revenues measured in billions, it signifies a vast amount
of money.
That said, even retailers that do take part, can find themselves losing money as websites crash under the
volume of demand. If customers can’t access your website they can’t buy anything. Last year, John Lewis
reported that on Black Friday it would be selling £45mln worth of goods via its website, so just one minute
of downtime would cost it £75,000 in lost sales (Diginomica.com)
Without doubt Black Friday can work for some retailers, but clearly it doesn’t work for all.
Black Friday: The Good, the bad and the ugly
Cutting profit margins during the busiest shopping period of the year doesn’t really make much sense. Not
least because it gives retailers less room to manoeuvre if sales closer to Christmas need some extra oomph.
But Black Friday is here and here to stay. So if retailers don’t take part, it’s likely they’ll see their rivals get all
the business. And that’s why Black Friday 2016 is likely to be another step-up in terms hype and excitement.
Black Friday has it’s downsides and fisticuffs, but done well, it’s a fantastic opportunity for retailers to win new
customers and ultimately increase sales. But preparation is vital. Previous years have taught us that those
retailers, who are as prepared as possible, from front-end to back-end, will see the biggest success.
Sources:
Marshall, Greg: Citing Sources: [www.techradar.com/news/digital-home/black-friday-2016-1318385]
[September 14, 2016]
Canocchi, Camilla: Citing Sources: [www.thisismoney.co.uk/money/news/article-3411721/Shoppers-rein-
Christmas-spending-High-Street-retail-sales-fallsharply-compared-2015.html] [January 22, 2016]
Wainewright, Phil: Citing Sources: [www.diginomica.com/2016/02/18/36/-hours-inthe-black-friday-ops-
room-at-john-lewis/] [February 18, 2016]
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7. For more information, please visit https://aka.ms/blackfridayretail