Ecommerce Black Friday and Cyber Monday breakdown
The busiest shopping spree weekend of the year, Black Friday and Cyber Monday (BFCM) has come and gone. Though, like most of 2020, this year’s event was not it’s usual self. The days of endless queues of people huddled together were non-existent this year due to the current restrictions.
Traditionally the sale begins on Black Friday (the last Friday of November) and ends with Cyber Monday (the following Monday). This year the event began as early as 01st November. Some stores and brands launched “pre-Black Friday” discounts nearly a month before the 27th November, offering up to 75% off selected products.
“Around 30% more retailers offered early deals compared with 2019, snapshot data for 16-18 November from Lovethesales.com, which monitors online discounting across more than 1,000 retailers, shows. Amazon launched its early Black Friday Sale – which carried the strapline “Shop early. Relax later” – on 26 October.” (Drapers, 2020)
Typically, Black Friday is a combination of online shoppers and foot traffic – the best of both worlds. Though, over the years the footfall percentage has begun to rapidly decrease – even more so this year as the online sales surged over the BFCM period.
Before the announcement of the second national lockdown two thirds (66%) of UK shoppers said they will do Black Friday online this year rather than taking the risk of visiting a physical store. This figure has increased by 10% since last year – pre-Covid-19.
6% said they will commit to visiting stores during the big sales event. Although, it is very likely that the majority of people taking part in the annual sales event did so online, as the stores across the UK remained closed until 02nd December (See Finder, 2020).
“This channel shift is something we’ve witnessed most of the year, and is at least partly responsible for a record net loss in chain stores. In February, 20% of all retail sales were online. In May, it was 34%.”
“Despite a slight fall to 27.5% in September as non-essential stores reopened, online sales are increasing again following a second lockdown. This will pose logistical challenges for retailers and delivery companies already at capacity.” (PWC, 2020)
Ecommerce is on the rise
It seems very doom and gloom for brick and mortar stores at the moment – on the flip side ecommerce stores are on the rise – BFCM weekend saw its biggest rise in online sales yet.
Big box stores such as Amazon made more than 60% more this year than last year over the Black Friday and Cyber Monday weekend – which equates to $4.8 billion in worldwide sales (See How Africa, 2020)
Over the last month Amazon’s competitor, Shopify, have made themselves clear, through their marketing channels, that people should not be persuaded to purchase from Amazon this BFCM event – referring to these kinds of shoppers as unoriginal and ‘Amazon basics’.
Other campaigns involved promoting the idea of shopping through Shopify’s small businesses – #SupportSmallBusiness is another popular hashtag trending at the moment.
Hats off to the marketing team at Shopify as they were up by 76% in online sales since last year – breaking BFCM records. They blew Amazon out of the water with Shopify’s merchants collectively making $5.1 billion in sales over the BFCM weekend event.
“Shopify recorded more than $2.9 billion in total sales on its platform during the 2019 BFCM, a figure its merchants reached this year by 5 p.m. EST on Saturday.” (Global News, 2020)
*Round of applause*
Fashion brands fight for the best Black Friday and Cyber Monday deals
Black Friday and Cyber Monday comes with the expectation of bagging a great deal or heavily discounted products. Typically, most stores do reductions of between 30%-50% off the ticketed price – bargain right?
After being among the hardest hit by the social shift and migration to homeworking, fashion retailers have taken the online discounts to the extreme – with hope to salvage the money lost in the first episode of lockdown back in Spring 2020.
“During the spring lockdown, stores missed out on £1.6bn of sales a week, according to the British Retail Consortium, but the significance of the festive period means that figure is estimated to be £2bn of sales a week.” (The Guardian, 2020)
Due to the majority of this year’s Black Friday event being hosted online, ecommerce stores were even more competitive with their price drops than usual. Top fashion brands such as Asos promoted its “biggest Black Friday deal ever” offering up to 70% off everything (See Draper, 2020)
Other clothing brands such as Boohoo, Nasty Gal and Karen Millen, also jumped on the heavy discount bandwagon and announced a discount of up to 80% off all of their products, with products for as little as £2.
However, none could compare to the clothing brand Pretty Little Thing (PLT) who were offering deals up to 99% off – meaning that some of their shoes were as little as 25p and dresses as cheap as 8p. The online retailer received mixed reviews on its drastic price drops; some of the PLT followers indulged themselves in the sale of the century – whereas others did not feel quite the same.
“One buyer said on Twitter that they had made 27 orders from the brand for just 57p each, while another said they had bought 56 items for £28.” (The Guardian, 2020)
Whilst some ecommerce stores were praised for their high surge in sales and low product prices, others were slandered for their ridiculously low prices and lack of ‘ethicalness’. The huge reductions caused a backlash across social channels and amongst the environmental experts.
“The perpetuating cycle of over production and consumption relies on the use of natural resources that contributes substantially to environmental degradation,” said Kerry Bannigan, founder of the Conscious Fashion Campaign.”
“When the cost of clothing is staggeringly low, you have to wonder about the human cost of making that garment, and whether it comes from a supply chain of exploitation,” a spokesperson said. “Remember when you see clothes selling for cheap, this always comes with a cost to people and the planet.” (The Guardian, 2020)
The aftermath – is the high street Covid-19’s next victim?
The pandemic combined with competitive online sales equals a recipe for disaster for the high street – especially for those brands who refuse to get involved in the ever-growing ecommerce world.
This year’s event saw its lowest footfall numbers in years due to lockdown regulations in England. England, still in national lockdown during the event, experienced a fall of -98%.
Though, this fall in foot traffic was expected in the highest restricted places of the UK, it was not anticipated in Wales, a country which non-essential shops are permitted to open, where they saw a decrease in traffic of -31% over the weekend. Scotland also experienced a -50% decline since 2019.
The fear of the virus is stronger than the necessity to visit retail stores, especially when the convenience of online is so enticing and accessible now. The question is when ‘normality’ sets back in, will the survival of the high street be guaranteed? Could Covid-19 have convinced the majority of us that online shopping is the new ‘norm’?
With once-loved top fashion brands facing administration it is not looking healthy for the UK’s high street at the moment.
In March 2020, the fashion brand Laura Ashley went into administration, closely followed by Debenhams in April. Most recently Oasis and Warehouse have joined them in administration – with many other top brands following suit.
Sir Philip Green’s, owner of Topshop, Burton and Dorothy Perkins, Arcadia Group is also in danger as they are currently working towards contingency options to secure the retailer group’s future.
“Arcadia announced 500 redundancies at its head office earlier this year. In June last year, creditors agreed a rescue deal that included rent reductions on its stores, 1,000 job cuts and dozens of store closures.”
“In September, Arcadia U-turned on a decision to pay staff as little as half of their redundancy pay. An apology was issued to around 300 people who had lost their jobs while on furlough.” (Independent, 2020)
The pandemic has come with many uncertainties – that is for sure – and our once booming high street is now another question mark as it becomes Covid-19’s next potential victim.