The official start of the Christmas shopping season is upon us, with the UK following in the footsteps of the USA by celebrating Black Friday tomorrow. Traditionally, Black Friday occurs the day after Thanksgiving and sees US retailers offering their customers substantial discounts on purchases in a bid to boost profits into December – however, the custom has crossed the pond in recent years, in part thanks to the number of American retailers now trading in the UK.
Industry experts believe that this Black Friday could be one of the most profitable for retailers to date, with Deloitte forecasting a total spend of around £5 billion by UK consumers in the run up to Christmas. Consumer spending is expected to peak on Monday, which has become known as “Cyber Monday” thanks to the pivotal role online shopping now plays in the Christmas season.
As consumers remain cautious about spending thanks to the uncertain economic conditions, it is believed that the Black Friday tradition will be a major tool in the arsenals of e-tailers. Amazon, for example, will be discounting a total of 2,000 items over the weekend – doubling the number of promotional selections from last year.
Research from digital marketing group RedEye indicates that high street retailers may well wish to consider implementing a similar savings scheme if they truly wish to increase seasonal profits, rather than sticking to the traditional route of discounting items in New Year sales. This is because 53 per cent of shoppers surveyed by RedEye admitted they would be more likely to take advantage of discounted items in the run up to Christmas, thereby shunning Boxing Day and January sales.
Deloitte’s head of UK retail, Ian Geddes, believes that retailers can enter the Christmas trading period with a little more confidence this year.
He says; “The forecast will provide some Christmas cheer for retailers.
“Shoppers are expected to loosen purse strings off the back of rising consumer confidence and improving economic conditions.”
However, while high street retailers may be keen to capitalise on a more positive consumer mood, it seems that once again those providing online services will be best placed to cash in. This is because online retail sales are forecast to rise by 19 per cent, playing a large part in the total Christmas sales increase of 3.5 per cent to around £40.3 billion.
Mr Geddes believes that stores without basic online options such as click and collect or home delivery could see customers absconding to rival chains in the busy Christmas period.
He concludes; “After last year’s click and collect Christmas, consumers’ expectations around flexible delivery over the coming festive period are higher than ever before.
“Store collection is now seen as a basic offering and those retailers without this capacity will struggle to convert online sales and lose resulting footfall in store.”
With online retailers such as Amazon offering Sunday deliveries and supermarkets increasing their click and collect platforms, it seems that those failing to keep up with technological advancements risk being left out in the cold this Christmas. However, by utilising both the internet and promotional tools, high street retailers could well see their profits increase during the festive season this year.
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