Current Issues

Regular Industry Development Updates, Opinions and Talking Points relating to Manufacturing, the Supply Chain and Logistics.

Beware Red Friday: Chasing Black Friday Shoppers Will Push High Street Retailers into the Red

07-Nov-2018
David Jinks MILT (pictured)
Head of Consumer Research, Parcelhero
Beware Red Friday: Chasing Black Friday Shoppers Will Push High Street Retailers into the Red
As B&Q joins the ranks of retailers blacking out Black Friday, the online delivery specialist ParcelHero says traditional stores should avoid taking on Amazon in a race to the lowest price.

The home delivery specialist ParcelHero says High Street stores should not try to compete with the likes of Amazon by joining in the Black Friday price-slashing frenzy in a race to the bottom. Instead they should concentrate on everyday value, customer experience and emphasising staff expertise.

‘Traditional High street stores can’t hope to make a profit matching pureplay online sellers’ Black Friday deals on November 23rd,’ says ParcelHero’s Head of Consumer Research, David Jinks MILT: ‘But some stores seem hell-bent on keeping up their market share on the day, come what may.’

But David says the truth is beginning to dawn on town centre retailers that they can’t out-Amazon Amazon. ‘B&Q is the latest retailer to join the likes of M&S, Ikea, Asda, Selfridges, Homebase and Primark in shunning ultra-cheap deals on Black Friday, and they won’t be the last.’

Warns David: ‘Black Friday shoppers expect rock-bottom prices but also the same level of service and expertise as every other day of the year; and that includes free returns. For example. ParcelHero’s recent research revealed 50% of womens’ clothing bought on Black Friday last year was returned. Small wonder Black Friday sales seldom equal profit for High Street retailers.’

David explains: ‘High Street stores have wages and landlord rents to pay; overheads such as heating and electricity to cover, and, of course, exorbitant business rates to meet. As such their bottom line is higher than online ‘A stars’ such as Amazon, ASOS and AO. And our latest research reveals it’s three times more expensive for an omnichannel brick and mortar/online retailer to deliver an item than if a customer buys it in store; so many retailers are struggling to compete online as well as in store on Black Friday.’

Adds David: ‘ParcelHero’s industry report Retailers Reach the Point of No Returns reveals most customers now expect to be able to return any item for free, whatever the reason, and that on average one in four Back Friday items are returned. B&Q found 43% of its customers say they often or always returned items purchased in dramatic one day sales such as Black Friday. If a retailer has already sacrificed most of their profit pursuing the Black Friday pound, returns will push that into a loss.’

And David says Black Friday town-centre store deals do nothing to encourage customer loyalty or create a good impression for consumers: ‘Let’s face it, Black Friday shopping can be a dark experience for retailers and consumers alike. Marks & Spencer’s boss Steve Rowe said recently: “I bet most retailers wish Black Friday was an American import that never arrived.” That’s not surprising; Black Friday sales leave a bad taste in the mouth of both retailers and consumers battling through crowds of bargain seekers. It’s small wonder shoppers are increasingly voting with their feet and leaving the crowded and frankly scary High Street Black Friday experience and moving online.’

Reveals David: ‘Back in 2013 it was Asda who popularised Black Friday on the High Street. But it’s noticeable that, following near riots in its stores in 2014, the Black Friday pioneer has quit the whole event, saying it had received strong customer feedback that its shoppers didn't want the pressure of a ‘flash sale’ and prefer low prices throughout the festive season.

‘The likes of Ikea, Selfridges and Primark are also riding out the Black Friday storm. And it seems that the tide is with them: in 2017 Black Friday shop footfall was down in the UK 8% YOY; even as online purchases soared 11.7% to £1.4bn.’

Concludes David: ‘High Street retailers shouldn’t seek to join in the Black Friday feeding frenzy when all the figures show that, long term, it is consistent good value; a great in-store experience, and knowledgeable, friendly, staff that are the key to rebuilding High Street sales. None of these things can be achieved if the majority of a store’s best deals are thrown into one day, in a crowded, pressurised shopping environment. Town centre stores should ditch Black Friday sales that risk pushing them into the red.’

ParcelHero’s repot Retailers Reach the Point of No Returns reveals smaller stores make no profit on an item if it has been opened and returned even once. Find out the full story at here.

Richard Seel
Managing Director Supply Chain & Logistics, Delaware
Meeting the Challenge of Supply Chain Efficiency – How Manufacturers Can Achieve their Goals
Olivier Binet
Managing Director International Markets, InPost
How to build sustainability into last mile deliveries
Ron Volpe
Global Vice President Apps Business Development, Tradeshift
Under-Pressure Retailers Turn to D2C to Level the Playing Field
Craig Summers
UK Managing Director, Manhattan Associates
Margin Erosion is turning the spotlight on the Warehouse
Simon Runc
Principal Visual Analyst, Atheon Analytics
Unlocking the Value in Data
Steve Purvis
Operations Director, Bis Henderson Space
Brexit Uncertainty Highlights Need for Flexible Logistics Strategy
Alan Gunner
Business Development Director, Adjuno
Starting at the source: achieving a sustainable supply chain
Craig Summers
UK Managing Director, Manhattan Associates
Conquering Connected Commerce
Mark Jolley
EMEA Manufacturing, Transport & Logistics Solutions Sales Lead, Zebra Technologies
Augmented Reality is becoming a Retail Reality
Craig Summers
UK Managing Director, Manhattan Associates
The Cost of Doing Nothing
Sam Ireland
International Marketing Manager, Loftware
Are You Navigating Global UDI Compliance?
Stephen Cameron
Business Development Director, SWRnewstar
How the Resource and Waste Strategy Can Empower Industry
Georgia Leybourne
Senior Director International Marketing, Manhattan Associates
Are we embracing the profit potential of the over 50s?
Jon Moody
Chief Executive Officer, SSG Insight
The Future of Supply Chain Management
David Luttenberger
Global Packaging Director, Mintel
Mintel announces top global packaging trends for 2019 and beyond
Andrew Tavener
Head of Marketing, Descartes UK
Compliance Management – it’s time for joined up thinking
Stephen Cameron
Business Development Director, SWRnewstar
Primark's move to 100 per cent sustainably sourced cotton should be commended
Marc Corriveau
Account Manager, Loftware
Changes in packaging result in ROI for F&B products
John Perry
Managing Director, SCALA
Why an extension is best for British businesses
David Jinks MILT
Head of Consumer Research, ParcelHero
Booking a courier? No printer required, says ParcelCompare
Graham Parker
CEO, Gravity Supply Chain Solutions
Mitigating The Risks Of Trade Wars And Tariffs
Sam Ireland
International Marketing Manager, Loftware
How Brexit Will Impact Supply Chain Labeling?
Sid Holian
Managing Director, Bis Henderson Consulting
Three critical steps to a hi-tech, agile supply chain
Manu Tyagi
Associate Partner, Retail and Consumer Goods, Infosys Consulting
M&S and Ocado have signed a £750 million deal to take M&S groceries into the home delivery market
Olivier Frère
Serialisaton Expert, Zetes
Understanding the Tobacco Products Directive
Paul Heiden
Senior Vice President of Product Management, Ultimaker
6 overlooked benefits of 3D printing for your supply chain
Dave Locke
EMEA Chief Technology Officer, WWT
Merged pharmaceutical firms seek fast-track route to savings
Johannes Panzer
Head of Industry Strategy for Ecommerce, Descartes
How to make international ecommerce transparent, efficient and cost-effective
Craig Summers
UK Managing Director, Manhattan Associates
Putting the WOW in the checkout experience
Richard Parfect
Fund Manager, Seneca Investment Managers
The cessation of Airbus A380 production
John Perry
Managing Director, SCALA
What next for British business?
Chris Jones
EVP Marketing & Services, Descartes
5 Key Logistics Trends and Technology Implications for 2019
Craig Summers
UK Managing Director, Manhattan Associates
What is the Checkout of the Future?
Andres Richter
CEO, Priority Software
UK Manufacturing: The Productivity Conundrum
Martin Meacock
Director, Product Management, Descartes
Brexit: only 10 weeks to implement if changes are ultimately needed
John Perry
Managing Director, SCALA
What does May's defeat mean for the supply chain?
Martin Meacock
Director, Product Management, Descartes
Get Ready for CDS
Don Brenchley
Director Industry Strategy, LLamasoft EMEA
Don't Let Soft Skills Be Forgotten In Your Supply Chain