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

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.

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
Robert Broström
Director Of Service And Support, Handheld Group
Handheld Promotes Robert Broström To Director Of Service And Support
Dan Willmer
Professional Services Leader, MercuryGate
MercuryGate Hires Dan Willmer as New Professional Services Leader
Bob Brown
Manufacturing Industry Specialist, Loftware
Ideal Enterprise Labeling Systems Include Support and Service
Jason Chester
Director of Channel Programs, InfinityQS
2019 will see half of manufacturers invest in data collection technologies
Craig Summers
UK Managing Director, Manhattan Associates
Integrating Man And Machine: A Fresh Approach For Modern Grocery Warehouses
Dustin Maxey
Director of Product Marketing, Ping Identity
Security from the web to the loading bay
David Jinks MILT
Head of Consumer Research, Parcelhero
Parcel Senders Must Face Up to Their Christmas Duties
David Jonker
Vice President, Thought Leadership, SAP
Your Customer, the AI
Kelly Feehan
Service Director, CABA
Workplace wellbeing predictions for 2019
Mike Thornton
Head of Manufacturing, RSM
Brexit uncertainty bites for manufacturers
John Perry
Managing Director, SCALA
Stockpiling decision should not be taken lightly
Tony Dobson
Managing Director, Snapfulfil
Brexit Uncertainty Boosts Sales For Synergy
David Feakins
Founder and CEO, Modus Brands
How has technology transformed the distribution industry?
Nicole Hardin
Director of Product Management, Sage
The business case for reducing food waste in the supply chain
Craig Summers
UK Managing Director, Manhattan Associates
Mindful consumers: Are we reaching an ethical tipping point?
David Jinks MILT
Head of Consumer Research, Parcelhero
Online household goods sales soar by 26.5% while High Street sales slump
Amir Harel
General Manager - Visibility Solutions, Zetes
Visibility - the saviour of retail operational excellence?
Sameena Ashraf
Business Development and Partnerships, Stowga
How can warehouses acquire customers?
David Jinks MILT
Head of Consumer Research, Parcelhero
Singles’ Day’s move upmarket powers UK brands’ sales
Craig Summers
UK Managing Director, Manhattan Associates
Beware the Disruptors
Don White
VP Enterprise Solutions, Snapfulfil North America
Never too early: Three metrics to track this peak season for next year's improvements
Patrick O’Brien
UK Retail Research Director, GlobalData
Business rates relief offers no reprieve for UK’s suffering retail chains
Bob Barltrop
Strategic Development Director, SWRnewstar
Chain Reaction
Colin Whelan
Principal WFO Solutions Consultant, Aspect Software
Effective channel shift is less about the technology and more about the people it affects
Jackie Steele
Business Development Representative, Loftware
Automated Supply Chains: Don't Let Labeling Become the Weak Link
David Jinks MILT
Head of Consumer Research, Parcelhero
How home deliveries are fighting to retain their green crown
David Jinks MILT
Head of Consumer Research, Parcelhero
Will Trump’s Move To Pull Out of UPU Lead To New Post War Period?