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The combination of Black Friday discounts and coronavirus restrictions will make November a record-breaking month for online spending in the UK, according to a new report that showed early web sales rising by 60%.
With non-essential shops closed in England and shutting in parts of Scotland at the end of this week, household names such as Currys PC World and Debenhams, have started cutting prices to encourage customers to buy early and avert a high street meltdown in December.
Online sales were up 61% in the first week of November compared with the same period last year, according to the internet industry body IMRG, which said the impressive growth indicated November is “well on track to be a record-breaking month for online retail”.
Andy Mulcahy, the strategy and insight director at IMRG, said the week of Black Friday – beginning 23 November – was always big in sales terms but the backdrop of the pandemic meant retailers needed to encourage customers to do their shopping earlier so as to avoid “heavy backlogs and delays in proximity to Christmas”.
Of the 320 retailers IMRG monitors, by the middle of last week more than one in 10 had launched their Black Friday campaigns compared with about 4% in 2019, with AO.com, The Entertainer and Amazon among names already offering discounts.
The focus for the Black Friday discount extravaganza is the final weekend of November, when shoppers are expected to spend £7.5bn, according to a Centre for Retail Research report for Vouchercodes.co.uk. That would be some 12% less than in 2019 and the first time CRR’s experts have predicted a drop in total sales since the US-inspired event arrived in 2013. The fall in spend is blamed entirely on lockdown store closures.
The diverging fortunes of real and virtual stores is writ large in the CRR’s forecasts, which predict online sales will be nearly £2bn higher at £5.8bn while stores will miss out on £3bn of business, to take just £1.7bn.
Patrick O’Brien, an analyst at consultancy GlobalData, said he expected a strong Black Friday sales period with multichannel retailers “desperate to make up for lost store sales” via their websites. “They are staring down the barrel of a catastrophic Christmas and are not certain they are going to be able to open on 2 December. There is a battle to get their share of spend.”
When Black Friday first arrived in the UK the scramble to get discounted TVs and appliances descended into brawls in some shops but it is now primarily played out online, with consumers at home combing websites to find the best deals, particularly on coveted home appliances such as washing machines and vacuum cleaners, as well as personal gadgetry like smartphones, tablets and speakers.
Big names such as Marks & Spencer and Next are not taking part this year while, unlike last year, John Lewis is not launching its own promotions but will price-match rivals. There are also expected to be fewer promotions in the supermarket aisles, with store chiefs wary of drawing more people to already busy stores.
Delivery companies are already experiencing a spike in demand. Last week parcel volumes were 43% higher than in 2019, according to technology firm Metapack, which works with major brands like John Lewis. Its software finds delivery slots for parcels within a network of 400 carriers, helping move a billion packages a year.
During the three-month spring lockdown the number of parcels processed by Metapack was actually 25% bigger than during last year’s festive rush. Given the lockdown restrictions some retailers think the Christmas peak could be up to 60% bigger higher again, according to Metapack executive Bruce Fair. Carriers keep their ultimate capacity “close to their chest” he added, but the top four – Royal Mail, DPD, Hermes and Yodel – have stopped taking on new business.
The Entertainer toy chain launched its Black Friday deals early to help spread out sales and, like some other chains, is offering a refund of the difference if prices drop again.
Gary Grant, its founder and executive chairman, said it could not “cram seven weeks of customers into its shops in three weeks” when stores reopened. “We’ve got to maximise every single day of every week, all the way to Christmas now, we don’t want a lull now and to be over capacity in three weeks time.”
In previous years The Entertainer took 10 days to process Black Friday orders and if the lockdown results in a 50% or 100% increase, Grant has warned “we and the couriers could not cope”.
“There’s no point the whole world thinking that on 27 November we can go online and buy everything we want, and it will miraculously turn up at our front door,” he added.
Source: The Guardian
Keyword: Lockdown and Black Friday set up ‘record-breaking month’ for UK online retail | Business