A strange day indeed

With Black Friday done and dusted, Retail Systems brings you the lessons we have learned from the busiest shopping day of the year

1.) UK retailers' determination to recreate Black Friday here leaves a nasty taste in the mouth. They know full well the chaos (arrests, injuries) that it causes Stateside, however 'isolated' the incidents are; a reminder of which at: http://blackfridaydeathcount.com/

2.) On which point, people are the worst. Police were called to supermarkets around the country as crowds surged and people started acting like mentalists at the first sniff of a bargain. A man was arrested in Salford after he threatened to smash a staff member's face in. Shoppers in Stretford decided to have a fight and a woman suffered minor injuries after being hit by a falling TV. The list goes on and on on...

3.) Various big name retailers predicted a bumper Black Friday. Alas, they didn't adequately performance manage their websites to ensure they could cope. The Currys website buckled under the pressure of bargain hunters on Thursday night and the day itself saw numerous website crashes, including Tesco, Argos and Boots. It's 2014, people, not 1994. Retail websites shouldn't be crashing as people splurge on electrical and white goods!

As Archie Roboostoff, Borland Solutions portfolio director, Micro Focus, puts it: "Website outages are catastrophic for any retailer or business. Not only is there a potential to lose revenue, there is also a strong possibility of reputational damage to consider. In fact, Micro Focus’ CEBR research puts this loss at £36.7 billion per year globally, showing the full cost of a failure goes beyond missed revenue opportunities. Even minor delays to website response times can have a sizable impact on customer satisfaction, page views, conversion rates and site abandonment. Despite this, an astonishing percentage of organisations (32 per cent) do not or don’t know if their website is monitored on a 24x7 basis."

4.) The High Street is alive and kicking. And retailers offering a hybrid experience of online and in-store came out on top during the Christmas rush. Rupal Karia, client managing director, retail & hospitality, UK & Ireland at Fujitsu, says: "Whether it’s consumers hitting the High Street, or spending time browsing and shopping online, Black Friday and Cyber Monday create huge opportunities for retailers. While some have been heralding the death of the High Street, we believe that it is very much alive and it could be said that “clicks” are in-fact moving towards “bricks” when it comes to significant shopping days. Research by Fujitsu UK & Ireland revealed that 65 per cent of retailers believe the importance of physical stores is increasing significantly within Europe. But with an ever-increasing amount of channels, it is very important that retailers take an integrated approach and deliver the same experience for customers, regardless of whether they will be making purchases on a device or in-store. Most consumers will be looking to shop with retailers who can provide the best experience possible. Only by putting consumers at the heart of the business, personalising the shopping experience and simplifying the buying process, retailers can hope to win the battle for consumers’ hearts – whether that’s in-store or online."

5.) For retailers, Black Friday is all smoke and mirrors, sucking festive sales from elsewhere and draining November trading margins. Ultimately, customers (and the PRs pumping out press releases on the subject) are the only winners. To quote Professor Chris Edger, retail expert from Birmingham City University: “So how useful is Black Friday to retailers? Defensively it will become a must – unless companies want to lose market share to their rivals. However, based on the evidence in the US, Black Friday will become a ‘vampire retail squid’ – spreading out throughout the month sucking margin out of November trading! Indeed, Amazon – setting the trend in the UK once again – has already started its ‘run-up’ promotions to Black Friday on Monday, 24 November. The margin consequences of this move – as consumers become addicted to November discounting and expect it as a matter of course – could have grave consequences for profitability over the longer term for some retail players. Although, once again – those organisations with efficient click’n’brick and online models – will benefit more from the November ‘feeding frenzy’ than those that don’t!”

OrderDynamics’ co-founder, Michael Ross, believes that Amazon set a bad example for British retailers. “At a time when retailers are already under pressure to deliver more profit, Black Friday only puts even more pressure on them to bring forward sales – but at a much lower margin. This is reflected in the range of items that Amazon offered as part of its Black Friday sales. There was an eclectic mix of items on offer, shower heads to a violin complete with a zipped case to a cat scratching post. These are most likely items which are over-stocked, own-brand or have a high margin."

He adds: "All of this translates into a rather strange customer experience. Amazon, who set the benchmark for product recommendations, is suddenly showing a range of items for which no past activity would indicate an interest. I have no cat, I have shown no interest in the violin and my shower head is working just fine and I already have a Kindle, so stop asking! This is the challenge for retailers, offer a super relevant, personalised experience that delights customers and doesn’t eat into margins or focus on profit. Clearly the right thing to do is somewhere in the middle of the two – but finding that middle point in a world that changes so quickly is far easier said than done.”

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