Just as Black Friday sales have become a retail industry pre-Christmas “tradition”, so too has the annual hand wringing over whether engaging in the discount-fest serves only to cannibalise revenues from more profitable full-price shopping periods.
Before the pandemic, retail representative groups such as Retail Ireland and Retail Excellence were asking such questions about the event, and its online retail cousin, Cyber Monday, which follows next week. But the pandemic has turned retail economics on its head, along with everything else.
Regardless of whether or not it makes sense, retailers are ploughing ahead with Black Friday campaigns, which start earlier each year. Harvey Norman, one of the most enthusiastic participants in Black Friday, is telling its customers – “why wait?” with its sales having started already, as has the Currys “Black Tag” promotion.
AIB on Monday predicted that Irish consumers will spend €25,000 per minute on Friday, and not just on big ticket electrical items – clothing sales volumes expected to jump by more than 230 per cent. Meanwhile, Google says searches for Black Friday are up 138 per cent, compared to last year.
Banks and tech giants, who piggyback on Black Friday with fees for handling financial transactions or selling ads, will always have a vested interest in hyping up the phenomenon. It is store owners and retailers who will have to pick up the cost, if indeed it is the case that Black Friday displaces more profitable sales.
But the truth is that after 18 months of being battered by the effects of coronavirus, the retail sector, especially the bricks and mortar part of it, probably needs all of the consumer hype and noise it can generate at the moment.
That need for a big marketing event to bring nervous shoppers onto the streets may just about trump the financial risk of offering dubious discounts for sales.
