This year’s BlackFriday saw a dampened response compared to previous years, with quieter activity in the Retail & Consumer industry.Transactions were reportedly up by a modest 2.7% compared to a regular Friday in October (Marc Pettican, head of Barclaycard Payments), however Barclays reported an overall decline of 0.63% in transactions compared to 2022.
The lack of enthusiasm for the sale weekend may be attributed to concerns about the cost-of-living crisis and inflation. These factors push consumers to adopt more budget-conscious approaches to shopping throughout the year, limiting their spending. However, it is only appropriate that consumers did manage to seize some opportunities to explore cheaper spending options during the sales, even if the options appeared dubious and more closely priced in line with our expectations of items during a cost-of-living crisis.
With physical retail stores experiencing decreased footfall which was 12.6% below pre-pandemic levels(according to MRI Software), retailers must navigate other ways to tempt consumers into buying due to lower consumer confidence. However, as the sales fell a week before payday for most employees, we may still witness more successful consumer activity, through an extension of the sales into December, especially as the holiday gift-gifting period approaches.
If economic challenges persist and profitability is a main concern for retailers, we may see a rise in finance lawyers assisting companies in borrowing loans to help companies survive or invest in strategic opportunities. On the other hand, we may see businesses who cannot secure loans considering options such as administration and corporate restructuring, aiming to raise capital to repay creditors or move closer to achieve their profit margins. On the more extreme end of things, companies may even liquidate if they are unable to sustain business entirely.
Comparatively, the modern shift to online shopping since the pandemic remains an active space during Black Friday sales, receiving ample engagement. Sites such as eBay, which have long-existed, are being considered more by consumers, for refurbished options, in line with smaller budgets. Some examples of the brands we have seen crop up for refurbished Black Friday promotions include Ninja, Dyson and Hotel Chocolat. The popularity of these items and their demand as Christmas gifting options demonstrates the increasing normalisation of second-hand options, promoting sustainable shopping.
In comparison to the challenges faced by in-person retailers, online retailers experiencing increased consumer engagement may seek out advise in data protection, cyber security, and online consumer rights. This is especially relevant for the emergence of platforms such as TikTok shop who capitalise solely from the platform, and mainly through user promotions. Seeking advice in these areas is essential for companies looking to build trust with their customers, to foster long-term relationships which will encourage equally long-term spending.
Overall, the decreased consumer response to Black Friday aligns with economic uncertainties, justifying the heightened consumer consciousness. As uncertainties persist, the consistent shift to online cements the potential long-term implications for physical stores.