Black Friday: how was(n’t) it for you?
This week’s Retail Note analyses the ongoing folly that is Black Friday.
6 minutes to read
Key Messages
- Black Friday was disappointing…
- …actually good news for the retail sector
- Initial footfall up +7.2% week-on-week
- But overall footfall in Nov down -2% on Oct
- Footfall -14.5% lower than pre-pandemic levels
- But Barclaycard reports +23% increase in transaction vols vs 2020
- Transaction vols +2.4% vs Nov 2019
- But online sales significantly down on last year
- More clarity to come from BRC (7 Dec) and ONS (17 Dec)
- Bad Black Friday = Good Christmas
Black Friday is a sham. Trying to interpret trends and performance over Black Friday is an absolute fool’s errand. So here goes…
Key messages
The key messages from the host of 3rd party data suppliers who make this fool’s errand an actual mission could scarcely have been more contradictory. High street footfall up, but not by as much as anticipated. But actually down on both last month and on a pre-pandemic basis. Online traffic seriously down on last year. But overall spending somehow up. Make of that what you will.
One of the multitude of challenges in interpreting Black Friday “performance’ is determining what the time parameters are. Just Black Friday itself (26 Nov), or Black Friday and Cyber Monday (a moniker that seems ever more ludicrous as time elapses). Or both days and the week end in between? Or the week before too, when many Black Friday promotions started to run. Or the week after, when they are still running. Or the week after that too, when many are still running. And so on…
The serious point is that Black Friday is no longer “an event” per se - it is, in popular parlance, just “a thing”. As an “event”, it was deeply damaging to the retail sector. As “a thing” its impact is hopefully much more muted.
Footfall up but disappointing
The days of mass-queueing and in-store punch ups are thankfully a thing of the past. But footfall is still seen as a major KPI in some quarters. Early indicators on Black Friday itself seemed to provide a very upbeat picture. According to Springboard, by midday on 26 Nov all shopping destinations had witnessed a +7.2% week-on-week jump in footfall. Shopper numbers were up markedly in shopping centres (+16%) and retail parks (+10.7%), but high streets saw a much more modest uplift (+1.3%).
These seemingly positive earlier indicators weren’t sustained and the picture was decidedly less positive when the dust settled. Year-on-year comparisons were always going to be totally meaningless as Black Friday 2020 coincided with Lockdown V2. But footfall this year was down -24.2% on pre-pandemic levels. Taking a bigger picture view, footfall for the whole of November was actually down on the previous month and down -14.5% on the same month in 2019. High streets were down -15.8%, shopping centres -22% and retail parks -3.6%. Equally tellingly, footfall was even down month-on-month (-2% on October).
In short, any anticipated surge in footfall over Black Friday simply did not materialise. In fact, 2021 marked the first time there was a decline in footfall since Black Friday became “a thing”.
Good, quite frankly.
Online even harder hit
The old chestnut of online running riot at the high street’s expense certainly didn’t ring true this time around either. Data from IMRG suggested a “notable dip” in Black Friday deals participation online compared to 2020, but noted the very obvious trend of campaigns being pulled forward. Week-on-week sales growth between the 2nd and 3rd week of November was far weaker than normal, rising +10% this year compared to more than +20% in previous years.
According to the IMRG, online sales declined -11% year-on-year in October and it acknowledged that “Black Friday week would need to be very strong for the amount of money spend online to reach its usual levels”. All evidence to date would seem to suggest that it wasn’t.
Two key moving parts here. Firstly, as “an event”, Black Friday was always going to lend itself more to online than physical stores and this has proved the case in previous years. The massive difference between the UK and the US (where Black Friday originated) is that in the latter it is the day after Thanksgiving, a national holiday. In the UK, it is just a standard working day. Secondly, there was a significant spike in online demand in November 2020 on the back of Lockdown V2. In simple terms, there was no way Black Friday online sales this year would match those of last.
Spending patterns
There is a school of thought that is deeply skeptical of footfall data as a barometer of actual retail performance (for the record, I am the self-appointed Headmaster of this particular school). Only on seldom occasions do footfall patterns closely correlate to actual retail sales, and any ensuing discrepancies are normally lazily attributed to online picking up any slack.
And so it is proving with this year’s Black Friday. Despite disappointing footfall figures and declining online traffic, spending was actually up. Barclaycard said the volume of card payments made before 1.00 pm on the day itself were up +23.3% compared to 2020 and +4.2% on Black Friday 2019. Cue some rather over-bullish projections that this was likely to be “one of the most successful Black Friday shopping sprees on record”. The full outturn figures seemingly back this up – transaction volumes were up +23% on 2020 and +2.4% on 2019.
Of course, credit card spending is not directly related to retail sales. It encompasses all facets of consumer spending. And with seemingly every other sector of the economy (e.g. telecoms, travel, hospitality, even healthcare) blindly jumping on the Black Friday bandwagon and “hijacking” what was conceived as a retail-only event, there’s no knowing which sub-sectors were the main beneficiaries.
In truth, we’ll only derive a more meaningful steer on performance when the British Retail Consortium (BRC) release their November figures next Tuesday (7 Dec). The official figures from the ONS won’t be released until Friday 17 Dec. Even then, the weirdest comp base imaginable (Nov 2020: total retail sales +4.4%, food +6.2%, non-food -8.4%, online +42.5%) will provide massive distortion to this year’s numbers. I reiterate the fool’s errand idiom...
Reading between the lines
Despite all marketing noise to the contrary, the impact of Black Friday would appear to be receding through a combination of scaling back amongst retailers and increasing consumer indifference. The notion of it being a “shopping bonanza” that makes or breaks the retail sector must now surely be laid to rest.
Black Friday 2021 was a damp squib that still made a lot of noise. But such is the perversity of the whole thing that a bad Black Friday is actually a good thing for the retail sector. A return to more normalized seasonal trading patterns, as opposed to unhelpful peaks and troughs of demand. Less actual discounting and margin erosion across the industry. But still too many retailers devaluing their brand by partaking, even in just a noisy marketing sense.
The doom-mongers are already reading too much into these Black Friday “trends” as a portent for a disappointing Christmas. On the contrary, I am still confident of a more-than-decent festive period, all the more so now that Black Friday is out of the way. Bad Black Friday = Good Christmas.
A fool’s errand trying to make sense of a fool’s paradise?