Does Anyone Get Anything Out Of Black Friday?

It is that time of year again where Black Friday seems to begin a few days early and then go on for a week. Every year we get the same warnings that not all offers labelled as "bargains" are actually good value for money.

This year, Which? has presented new figures showing that only one in twenty Black Friday price reductions were the cheapest price a product had been on sale for.

The consumer research organisation looked at the price of goods for a six-month period up to Black Friday and found that just 5% were offered at their cheapest price point on the big day.

The annual sale has made little sense to me, and many retail and marketing experts who will be lined up to speak to news crews over the next few days. Retailers typically find old stock to clear out ahead of the Christmas rush that is dressed up as a bargain, but is actually clutter that needs removing from the warehouse so there is room for the latest model in time for December. 

So, I think digital-savvy customers have grown accustomed to Black Friday not always working out to be the day, or week, of bargains promised. i just have a hunch that people know the week is not all it's cracked up to be, and the Which? figures back this up.

However, what is really alarming is how many retailers are jumping on to the band wagon for fear of losing out. 

I took a look at some figures from Croud the other day and they made alarming reading for any retailer that suddenly realises Black Friday week is upon them and that they should be joining in the price-slashing bonanza.

Put simply, cut prices do increase sales -- but it's short-lived and ultimately not that financially beneficial. Their figures show retailers that cut by 40% saw a 540% leap in sales revenue.

That looks great on paper -- but average order values dropped 12% compared to the week before. However, for those retailers that cut prices by 20%, sales revenue more than doubled, while average order values remain nearly the same, with just a -2% drop.

The takeaway is that some retailers are kidding themselves when they think they have bought loyal customers, but have effectively offered large discounts to people they will be unlikely to ever see again. Revenue will shoot up for a few days, but it's short-lived. 

With this in mind, can I make a prediction that over the next few days we will have retailers being interviewed for news bulletins saying how great Black Friday is and it adds to sales as people do early shopping and then buy again the next month.

We will then see analysts brought in around Christmas or maybe just after, to say heavy poor performance in December is due to Black Friday discounting -- meaning that people simply did their Christmas shopping a month early and then stayed at home.

There may be the occasional bargain, but in the main, it's hard to see how anyone comes out on top here as retailers clear old stock that is likely to have sold at a lower price previously and stores count a surge in sales but forget about the longer-term implications. 

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