Why retailers hate Black Friday
In November 2014, Black Friday deals burst onto the UK scene in a way absolutely no one expected.
The Black Friday page on TechRadar was viewed more than 1.5 million times, UK retail websites crashed all over the place under the heavy load and UK shoppers alone spent more in one day – £810m – than on any other day in history.
This year, analysts are expecting UK shoppers to spend more than £1bn on Black Friday – a truly stunning number.
So how are retailers dealing with this new and disruptive shopping spike, how can you ensure you get the best deals and where will the best bargains be found?
Why retailers hate Black Friday
It's safe to say that retailers hate Black Friday. Many of the big ones really hate it. It demands they discount products and thus trim their already small margins at a time when customers would be spending money for Christmas anyway, as well as forcing a drastic rethink of stock levels, staffing in warehouses and in IT departments and all sorts of other logistics at a time when they'd rather be preparing for Christmas.
Last year, many stores panic-slashed product prices on Black Friday with site-wide percentage reductions at the last minute in an effort to get in on the unexpected action, and many ended up making no money as a result. One retailer told techradar that it actually made a loss on Black Friday sales in 2014.
That's the problem with many consumer electronics categories – margins for stores are already quite small.
In short, Black Friday is a brilliant thing for us as consumers, but a total nightmare for online and highstreet stores. But as Adam Simon at IT stock analyst firm CONTEXT told techradar last week, "the genie is out of the bottle now and there's no putting it back in".
Better deals than last year
Of course, for some retailers with certain products it's a different story. and the good news is that while stores dislike discounts, Black Friday is a hot war and you've got to be in it to win it. So you can rule out a retail boycott.
Indeed, numbers from CONTEXT show that UK retailers imported more laptops in October than in any other month in history.
"What we saw in week 41 [beginning of October] was that laptop sales via distribution into retail was up 65% on the previous two years, " said Adam Simon, CEO of CONTEXT in an interview with techradar. "So we thought, 'wow, we'd better watch this space'. Week 42 has gone in the same direction and is extremely high. 70,000 notebooks were distributed to retailers."
That's economies of scale at work – the more products retailers buy in, the lower the prices they pay, and the better the deals for us punters. So if you're after a new laptop, you'd be wise to wait until Black Friday because the deals are likely to be better even than Black Friday 2014. You'll still need to be quick off the mark to get the best bargains though – allow us to be your guide on that score!
You can also expect superb deals on 4K TVs, PS4 and Xbox One console bundles, Chromecasts, iPads and smartphones as well.
The other trick that retailers are pulling this year is to spread the deals out over a wider period.
"We'll be running deals and promotions throughout November to make things easier for ourselves," one major UK retailer, which asked to remain anonymous, told TechRadar. "Consumers now expect discounts throughout this period so to make the best of it we have to plan ahead and make sure we order the right products in the right numbers to guarantee leading prices and adequate stock levels."
That's music to many a Christmas-shopping ear. So you can expect not only best-ever deals on Black Friday itself, but throughout the month leading up to the big day as well.
TechRadar isrunning a pre-Black Friday deals on which we're listing what we think are the best new bargains, so do check in with us next week to have a look.
The secret nature of Black Friday deals
One interesting undercurrent of this new and exciting deals period is how secretive each retailer is being with its planned promotions. We've been in touch with all the major online stores and they're all happy to speak to us… off the record.
Most seem very concerned that their rivals will uncover their plans ahead of time and price-match their carefully orchestrated marketing campaigns. It's almost like a Tom Clancy novel, except it's Mr. John Lewis vs Dr. Amazon instead of Khrushchev vs Kennedy.
I guess that would make this article The Hunt For Black November. Or, The Sum of all Deals. Or, Clear and Present Changer. I'll stop now.
Read more on this >> Tecspot Media Blog
Original source: Black Friday: Why UK retailers really hate Black Friday deals.
No comments:
Post a Comment