The ‘false economy’ of Black Friday revealed
Black Friday 2015 will see nearly £1.9bn of sales rung up in UK shops and online, but a study from Worldpay’s Insight Services team suggests the bargain frenzy may be built on a ‘false economy’ which could see some retailers start to rein in their sales promotions.
Black Friday has been positioned as a way for UK retailers to kick off their Christmas sales period but it could actually be proving detrimental to Christmas sales. Worldpay data suggests most shoppers (70%) come for the bargains but never return to their Black Friday hunting ground for the remainder of the festive season.
Analysis from Worldpay’s Insights Services has shown that people who shop in-store or online in the UK on Black Friday are worth £136 on average. And with consumer research revealing that one in four* planning to make a purchase this Friday, it’s understandably hard for businesses to turn their backs on the opportunities on offer.
Research* has also revealed that many Black Friday shoppers (40%) get carried away with self gifting - purchasing items for themselves and subsequently making an adjustment to their spending as a result. Worldpay’s data shows Black Friday deal hunters rein in their overall spending by about 10% in the weeks after the event.
So whilst Black Friday shoppers spend £114 more in store and online over the Christmas period than those who give the day a miss, a far higher proportion of that spend goes on purchases at very low-margin - which could be bad news for retailers during the crucial pre-Christmas sales period.
What’s more, negative experiences of Black Friday appear to be turning away consumers - one in five consumers say they think less of brands that run Black Friday sales*.
James Frost, UK Chief Marketing Officer at Worldpay, said: “Black Friday has become a major event in the UK retail calendar, but retailers are walking a very fine line. It has been hugely successful in as much as it helps retailers offload old stock and clear the shelves and warehouses in time to replenish for Christmas with newer, higher-priced items. However, it doesn’t appear to build much by way of improved customer relationships and may even be undermining Christmas sales and customer loyalty.”
“We will still see a rush of bargain hunters hitting the shops on Friday and electrical retailers and supermarkets will likely see the biggest spikes but I think a lot of retailers will be reining back their plans for Black Friday year-on-year to focus on the bigger prize which will always be a successful Christmas.”
The UK’s top three Black Friday ‘hotspots’ are the towns of Bradford, Rotherham and Barnsley where last year Black Friday spending was nearly double the national average.
Source: Visa Europe - www.visaeurope.com/newsroom/news/brits-expected-to-spend-black-friday
About the data
Figures quoted are according to Worldpay transactional data on Black Friday and over the Christmas period in the UK as a whole in 2014.
*Research of 1,000 UK consumers commissioned by Worldpay and carried out by Toluna between 09/11/15 and 11/11/15
Worldpay is a leader in global payments providing a broad range of technology-led solutions to our customers. We operate reliable and secure proprietary technology platforms that enable customers to accept a vast array of payment types, across multiple channels, almost anywhere in the world. The Group has three operating divisions: global eCom, Worldpay US and Worldpay UK.
On an average day, we process approximately 31 million mobile, online and in-store transactions and in 2014 we supported approximately 400,000 merchants in 126 currencies across 146 countries offering 326 local and alternative methods of payment.
Worldpay UK has a 42% market share in the UK and helps businesses of all sizes sell more to their customers by accepting card payments in-store, online, via mail or telephone, and on the move.
About Worldpay Insights Services
Insights Services is Worldpay’s big-data analytics proposition, harnessing the power of Worldpay’s payments information enabling retailers to better understand consumer shopping behaviours and preferences, both online and in-store. For more information on Insights Services please visit www.worldpay.com/uk/insight
For more information please contact:
Sophie Bent, Golin: T: +44 (0)207 067 0558
Siobhan Acha Derrington, Worldpay: T: +44 (0)203 664 4822