Black Friday: An Inconvenient Ecommerce Truth

Ssshhhh whisper who dares, Black Friday is coming!

Black Friday is now an established retail calendar event, even though it’s relatively young in the UK. What once was the preserve of electronics retailers has spread rapidly across categories and is dividing opinion over whether or not it’s a positive welcome to the retailer armoury. This blog takes a look at some of the data to provide a context for the size and impact of Black Friday in the UK.

The 2014 numbers

IMRG estimated that British shoppers in 2014, dazzled by mind boggling (or highly predictable, in layman’s terms) discounts on everything under the sun, spent £810m on Black Friday (vs. £720m on Cyber Monday), 50% more than analysts had predicted.

According to Ampersand, there was a 21% increase in traffic to retail websites, with 180m online visits. I quite like their description of how Black Friday has embed itself into our retail culture:

Whether we like it or not this rage-filled, margin-squeezing American ‘holiday’ has well and truly invaded our Isles.

[Source: Ampersand, Avoiding Black Friday Disaster]

Marketing activity ramped up significantly as well. Data from Kenshoo showed an 88% increase in paid search spending.

A poll run on EcomChat by @7thingsmedia found that most people thought Black Friday would dwarf Cyber Monday; they were right. Monday online sales were up year-on-year but by a much lesser extent.

Sales per hour started to spike really early in the day, from 5am to 7am seeing the biggest jump. The table below from Salmon shows average completed orders per hour:

The good

Some retailers had clearly planned for the gold rush, preparing the infrastructure to cope with demand as well as getting marketing teams flexible enough to respond to events on the ground.

A good example is AO.com, who ran smart tactical paid search ads when they knew competitors were experiencing technical site problems. According to David Moth on Econsultancy, AO reported a 43% increase in CTR and 250% increase in clicks on paid search ads.

He provides a nice data set of traffic growth for major retailers here, extrapolated from Hitwise data. Amazon was, unsurprisingly, one of the big winners, with around 173m visits, 83% increase year-on-year.

Marketplaces also had a Black Friday boon, with Google Shopping (8.7%), Amazon (77%) and eBay (76%) all up year on year and with larger growth than Cyber Monday.

The bad

Site outages, slow page load and annoying queuing systems. Why? An inability to cope with demand, or to prepare in sufficient detail to handle the impact across the business.

This hit mainstream media quickly, with sites like the Independent running doomsday posts. Ampersand research from 2014 found that 57% of retailers running Black Friday sales experienced website outages at some point on the day. The following major retailers all had major outages:

• Tesco
• PC World
• Argos
• Boots
• Game

Retailers like Curry’s set-up a queuing system, asking customers to join the queue with an average waiting time of 30 minutes.

The ugly

I found this random website that is a stats counter for accidents and deaths related to Black Friday in the US. It’s quite sobering reading.

There are similar stories in the UK, with fights over electronics like TVs a media highlight. I don’t have any hard stats but one fight over a TV is one too many.

2015 predictions

Salmon is being bold and predicts this year’s Black Friday will be the first £1bn sales day in the UK. Since Salmon made this announcement, Experian and IMRG have actually confirmed the prediction.

According to eDigital Research, 30% of online shoppers will make a purchase, a massive leap from the 8% last year.

It’s interesting to see the current high street sales pressures, with many reporting sluggish October traffic and sales. I’m not surprised; we’re educating consumers to expect crash sales and training them to wait for the alert. This has an inevitable shift effect on the sales peaks and troughs, and it’s likely that many retailers will have to wait until the end of November for a major surge.

What will be interesting is to see the comments from retailers post peak on whether Black Friday provides incremental revenue or simply shifts the spend to earlier in the Christmas season and at a cost to margin.

My bold prediction – Black Friday is simply going to cannibalise Christmas sales, so if the discounts fly beyond typical peak offers, this comes at a cost to margin. Retailers may see higher unit volumes but I doubt there will be greater overall wallet spend, I’m not convinced customers are ready to spend more just because of discounts.

Want to know more? Free Black Friday report from Ampersand

We’re teaming up with the folk at Ampersand to do a follow up to our popular Black Friday #EcomChat. They have just released Avoiding Black Friday Disaster, a free report on getting websites ready for peak trading. Darryl and the team will be joining us for a Cyber Monday special on Monday 30th November to look at what happened in this year’s Black Friday rush and provide insights/key learning.

Keep an eye out for announcements nearer the time and do check out the report, and please share with others.

Your view

Do you think Black Friday is going to become consistently the biggest sales peak for ecommerce? Have you seen any other useful data that you can share?

We’d love to hear your thoughts in this.

Thanks
James