By Roger Aitken / www.forbes.com / November 24th, 2015
Last year Black Friday, the biggest shopping day of the year when retailers slash prices across much of their range, created a home delivery bottleneck and saw some companies running out of stock. But delivery experts Fastlane International contends that spreading deals over a week now will “bust the log jam” of Black Friday.
In 2014 bargain-conscious shoppers spent an eye popping $1.33bn in the US on Black Friday, which originated over 50 years ago in Philadelphia where police officers described heavy and disruptive vehicle traffic that would occur on the day after Thanksgiving (the fourth Thursday of November).
In the UK, some £810m was spent online last year – more than Cyber Monday and Boxing Day sales. For the British market that equates to £9,375 a second and last year saw Asda sell 8,000 TVs during the first hour of Black Friday in the UK. This year, however, Asda are not participating.
But the expectation for this year is that Black Friday sales in the UK – which first came to Britain five years ago through Amazon – will top £1bn for the first time with Brits shelling out a little over £12,000 a second. According to predictions from Experian-IMRG, the figure will come in at £1.07bn – equivalent to a 32% rise over last year’s number.
Meanwhile the Centre for Retail Research has estimated that online spending on Black Friday will come in nearer to £966m, with total Black Friday sales, which includes in stores, hitting £1.39bn. But that number will be dwarfed with shopping over the entire weekend nearing £3.5bn.
However, if you think that figure is huge just look at Singles Day (Guanggun Jie) or ‘Double 11’ in China, one of the biggest online shopping days that takes place on 11 November and is popular among young Chinese to celebrate that they are proud of being single. This year’s festival saw sales of $14.3bn across Alibaba shopping sites Tmall and Taobao, up from $9.3bn in 2014 and $5.8bn in 2013.
But of course we are talking about China, a country that has a population just over 4 times that of the US (estimated at c.318m in 2013). Nevertheless, a proportion Singles Day sales were made well before the day itself through special online promotions.
Black Monday’s Retail Challenges
However, actually delivering the orders proved a tough challenge for some major retailers and small traders in the UK as well as the US in 2014. While Fastlane International says the move by many retailers this year to make Black Friday a week-long event “may seem odd”, but it argues it will help “bust the Black Friday jam of deliveries.”
David Jinks, a spokesman for Fastlane International in London, commenting says: “Last year a number of US and UK companies such as Amazon, Ao.com, Debenhams and River Island, all admitted to disruption to their delivery networks in fulfilling the record amount of orders. Systems are inevitably strained by such a huge artificial spike in demand at the beginning of the Christmas sales period.”
Clearly, no retailer worth their salt – large or small – wants to suffer the same logistics issues again and as the saying goes ‘retail is detail’. However, companies such as Amazon and eBay EBAY +3.45% have found another way to beat the bottleneck. They are already underway with their Black Friday offers this year.
Macy’s launches its Friday on Wednesday this week, and J.C. Penny, which operates 1,060 department stores in 49 US states, and Walmart on Thursday – Thanksgiving or ‘Brown Thursday’ – as some people are calling it. And, Sears has already launched its Black Friday event. But in a cunning twist – for members only.
Reflecting a growing trend to commence holiday sales earlier, Walmart has also announced that it will start its Cyber Monday sales at 8pm on Sunday November 29 as part of a ‘Cyber Week’ that kicks off this coming Saturday.
Do retailers want to suffer the same experience this year? “Not in a month of Sundays…or at least a week of Black Fridays,” Jinks remarks.
The backlog had a big impact on some retailers. At the start of this year Reuters revealed that the UK retailer Marks & Spencer Plc (M&S), for example, was unable to cope with a surge of orders around its Black Friday promotion, and had to cancel its next day delivery service for a period of time. And, it was by no means alone in struggling to keep up with Black Friday demand.
A constituent of the UK’s FTSE 100 index, M&S reported in early January 2015 that it’s Christmas sales were badly impacted by delivery problems and reported that sales of general merchandise (i.e. including gifts, homewares and clothing) had declined 5.8% in the 13 weeks to December 27 2014.
Jinks notes: “IMRG research indicates that 31% of us like the idea of Black Friday sales. And, one in five of us shopped on the day last year, with that expected to rise to 30% this year. But having all these products moving at the same time caused warehousing, web and final delivery issues in 2014, as well as creating needless congestion with that amount of home deliveries packed into a few days.”
He adds: “It might indeed seem strange that Black Friday lasts a week, but if it helps break the log jam, it makes sense in the end.”
As a low cost international delivery firm serving both everyday folk and businesses, Fastlane, which partners with the world’s leading logistics companies including DHL and UPS, are pleased “to see that retailers have listened to their delivery partners and distribution centre staff” according to Jinks.
For full details of which retailers have started their sales early, who is holding on until Friday, and who has abandoned the day completely this year the following website (‘Black Friday: Everything You Need To Know’) is worth a gander. Perhaps next year we might also have Singles Day to contend with and be utterly spoilt for choice.
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