From Christmas through to New Year’s, it’s most definitely been a season of shopping and as we step into the January sales retailers have been reflecting on the events of December.
With Black Friday, Cyber Monday and Manic Monday all becoming more popular than ever before have we all gone sales mad?
Promoting profits or leveraging losses?
This week John Lewis’ MD, Andy Street, warned of the consequences of heavily discounting. Retailers see sale opportunities as a way of making profit and gaining exposure but in reality flash reductions can prove to be a hindrance more than a help.
Black Friday brought John Lewis its biggest trading week on record, however, following the peak they saw a lull when retailers would usually be experiencing their busiest shopping period of the year. It may seem a great idea, slashing prices and driving footfall but such short-term events lead to unusual cash flow patterns and a tumultuous retail landscape. Christmas is usually a period in which retailers see a steady influx of sales, but the rise of Black Friday has caused un-ignorable change.
Consumers are taking advantage of low prices, seizing the opportunity to purchase Christmas presents which leads to less shopping during December and a less impactful season of sales in January 2015.
Not only do these sales events impact profits, they also have detrimental effects on retailer’s delivery processes and even the most prepared brands can suffer. The demand was so high on Black Friday that both Marks & Spencer’s and Yodel experienced problems with their delivery systems, something that can have a huge impact on sales as the popularity of click and collect is continually growing before our eyes.
All bad news?
Despite the negative impact outlined by John Lewis’ MD, a lot of retailers have seen Black Friday as a great way to boost sales. The popularity of the American shopping phenomenon has taken the UK by storm, and looks like it’s here to stay as we make the move into 2015. In particular, House of Fraser has this week reported the benefits of the day as it started their Christmas period with a day of great sales and high profits – leading to impressive numbers to look back on at the end of 2014.
Whether retailers view the new trend as a help or a hindrance, I’m sure consumers will be just as eager later this year when the opportunity for flash sales rears its head once again.