How important is Black Friday to an eCommerce business in the UK?
This week is Thanksgiving in the USA, which means it’s also Black Friday the day afterwards. There are a couple of competing explanations for how the day got its name – the first being that the crowds of people travelling the day after Thanksgiving caused such a headache for police that they dubbed the day Black Friday, the second (which may have come later) being that it was the day where shops made enough profit to take them out of the red, and into the black.
As with many traditions in a globalised world, Black Friday has spread out of the USA and has now been adopted in countries such as Brazil, Germany, India, Italy, and of course, the UK. Black Friday arrived in the UK in 2010 (although Currys did do some small Black Friday initiatives before this), and is now embedded in both business and consumer minds when it comes to the beginnings of Christmas shopping.
However, we want to discover how important Black Friday actually is to eCommerce businesses in the UK. Is it an expensive and resource draining marketing exercise, or do businesses really make a significant amount of profit on this day?
How much money did online retailers make during last Black Friday?
Research by Adobe found that $9.12billion was spent by US consumers online on Black Friday in 2022. This was an increase of 2.3% year on year. Toys, electronics, and exercise equipment sales were all up over 200% compared to an average shopping day in October.
However, it was a slightly different picture in the UK according to Statista. Spending online hit £4.81 billion, but this was a decrease of 11% from Black Friday online spending in the UK in 2021. They are predicting 2023 to see the same level of online sales (£4.81 billion) and for offline sales to increase very slightly this year to £3.93 billion as opposed to £3.9 billion last year.
Clearly, this is a very big deal for online retailers, and (given the right deals and the right marketing) can be incredibly lucrative and an important part of pre-Christmas sales.
How has the pandemic impacted Black Friday for eCommerce businesses?
Up until 2019, offline Black Friday sales (including the weekend and Cyber Monday) in the UK were consistently higher than online sales.
Online sales were 21% lower than offline sales in 2019, but by 2020 they had outstripped bricks and mortar shopping with 33% more sales being made online rather than offline.
Ever since 2020 online sales have been significantly higher and Statista is predicting the same pattern for 2023.
Clearly, the coronavirus pandemic has impacted the way in which people shop during Black Friday and this isn’t likely to change any time soon as WFH is still prevalent (especially on Fridays and Mondays) and many consumers have gotten used to their new spending habits. This means that eCommerce businesses are well positioned to make the most of these new habits and engage with people where they do most of their sales shopping now – online.
The big consumer question – is Black Friday a con?
One potential reason for Black Friday profits not being as high as some retailers would like, is that over the 13 years since it arrived in the UK, the public have become suspicious of Black Friday ‘deals’. YouGov research in 2022 found that 52% of respondents didn’t believe Black Friday deals were genuine and a quick look online brings up a plethora of articles suggesting that Black Friday price cuts might not be all they make out to be. In 2021, the BBC reported on a Which? Investigation, which discovered that ‘More than 90% of Black Friday deals were the same price or cheaper in the six months before the sales event last year’.
They looked at the prices of 201 items from 6 big online retailers including Amazon, Argos and John Lewis. Of those 201 items, 184 of them were the same price or cheaper before Black Friday in 2020, than they were actually on Black Friday. Another article from Which? in 2023 suggests that online consumers should ignore the ‘hype’ around the holiday, as ‘genuinely good deals are very rare’.
Not only are consumers worried that they might not actually be getting the best deals on Black Friday, there are also scams to contend with which are much easier for fraudsters and scammers to get away with online. A 2023 article by the Metro states that ‘The amount of money lost by people being conned on the internet has risen to £41 million in the first half of 2023’. So online fraud is a very real problem that consumers have to contend with, and could be a reason for them being cautious over Black Friday deals. Ben Donaldson, MD of economic crime at UK Finance says that ‘More and more criminals are using fake ads and websites to target their victims’ and they are especially preying on people during Black Friday who want to buy gifts for their loved ones for Christmas.
Is Cyber Monday more important for eCommerce than Black Friday?
By 2005, Black Friday had cemented itself as a very important day in many business calendars, but this was also the year that the term ‘Cyber Monday’ was coined by the National Retail Federation’s Ellen Davis. Research in 2004 suggested that the Monday after Thanksgiving was one of the most important online retail days of the year, with a 77% spike in sales being discovered and reported in a shop.org press release.
With the rise of internet shopping, Cyber Monday was often marketed as a much calmer alternative to the madness of shops the day after Thanksgiving – and gave people a way to enjoy the holiday with friends and family for a bit longer before the spending began.
Jessica Young, director of research data at Digital Commerce 360 says that over the past few years the deals that consumers can get on Black Friday and Cyber Monday have become pretty much identical, so there is now no reason for consumers to make a distinction between the two. Historically there has been a difference in how much money consumers have parted with on these days, however. More research from Adobe showed that in 2021 consumers in the USA spent $1.8 billion more on Cyber Monday than they did on Black Friday.
In 2022 in the UK, Cyber Monday spending was up 5.8% Year on Year, with Black Friday spending up 2.3%, suggesting that consumers might be getting more used to deals being available for the full weekend and Monday period, not just on the Friday.
This would suggest that Cyber Monday is (at least) as important for eCommerce websites and online retailers as Black Friday, especially since the pandemic impacted shopping habits and working from home means more people are likely to be sofa shopping than pounding the high street on their lunch breaks.
The big environmental question – how wasteful is Black Friday?
Companies and consumers alike are becoming more and more aware of sustainability, and the need to buy less, consume less and be more mindful of our planet. Black Friday seems to be the antithesis of this careful consumerism, especially when disposable and fast fashion brands such as Shein – known for their wasteful and unethical social practices – are holding Black Friday sales.
The fashion industry already contributes around 8-10% of all global greenhouse gas emissions, so in order to protect the planet it’s vital that these companies do their bit to encourage sustainable shopping.
The Green Alliance suggests that around 80% of Black Friday items are thrown away or remain unused. Black Friday marketing often centres around scarcity of deals, and encourages people to buy things that they wouldn’t otherwise have bought, and probably don’t need. It’s not just the items that people are buying that cause waste, it’s the packaging and the deliveries of online purchases, too. Waste Managed states that in 2023, products delivered due to Black Friday are set to produce around 429,000 metric tonnes of greenhouse gas emissions – enough for 435 return flights from London to New York. Black Friday is also a cause of digital carbon emissions increasing, due to the increase of email marketing, social media marketing, and people spending more time using their devices to shop online.
There is clearly an environmental problem with Black Friday shopping, so it’s down to eCommerce retailers and marketers to be mindful of how they market their products during this time, and what they do to reduce the carbon footprint of their supply chains (such as increasing their digital sustainability). Some retailers refuse to hold Black Friday sales due to the environmental impact this weekend has, these include Arket, Monki and Me & Em.
So, is Black Friday important for an eCommerce business in the UK?
It probably comes as no surprise when we say that yes, this is a very important time for eCommerce businesses, especially B2C eCommerce. Black Friday and Cyber Monday are now firmly cemented in the calendar as a key date for online shopping, and the pandemic has only strengthened this.
However, to fully make the most of this time, retailers need to understand that shoppers are savvy, and they are not willing to be duped by deals that are not really deals. Too many retailers have tried to pull the wool over shoppers’ eyes in the past, so if you’re going to have Black Friday deals, make sure that they are really providing shoppers with a good saving.
Shoppers are also much more conscious about the environment, and many online consumers battle with the desire for making savings, and the desire to save the planet. Online retailers need to recognise this and recognise their responsibility to sell as sustainably as possible. This includes having responsible sales, encouraging consumers to only buy what they need rather than creating feelings of scarcity and hype, and doing as much as possible to reduce emissions both online and offline. On this point, if you want to find out how big your website’s carbon emissions are, and how you can reduce them, ask us about our Digital Carbon Footprint Audit.