Pre-Black Friday lull hits October online sales

Online retail spending in October was more subdued than expected, indicating a pre-Black Friday lull, IMRG has claimed.

Black Friday is expected to cover an eight-day period this year, November 20 to November 27, with sales and marketing activity predicted to be at its highest level of the year on the run-up to Christmas, said IMRG.

Over the Black Friday peak period, spend is expected to reach £7.42 billion, which is up 15 per cent from a year earlier at £6.45bn.

On Black Friday itself – November 24 – it is forecast to hit £1.35bn – a nine per cent increase on 2016’s £1.23bn.

Despite the lull, October still saw an increase in online sales, up 12.6 per cent on October 2016, according to the IMRG Capgemini e-Retail Sales Index. That compared with the average year-on-year growth for August to October of 14.3 per cent and the five-year October average of 14 per cent.

However, conversion rates were low, standing at 4.4 per cent, although this was higher than the same month last year, which sat at four per cent.

IMRG argued that fewer people converting on retail websites suggested that there was a more research-led focus in the run-up to the year’s biggest discounting event.

Some good news however, was that the average basket value (ABV) was the highest for any October in nine years, at £94. This indicated that shoppers were spending more per visit.

Electricals also experienced a good month, seeing the sectors first year-on-year growth in six months, at four per cent. This followed the previous six months – April to September – which saw an average decline in growth of 5.9 per cent year-on-year.

Justin Opie, managing director at IMRG, said: “October was a very average month in the context of 2017, with growth of 12.6 per cent exactly in-line with the Jan-Oct year-to-date rate. As the fall in conversion rate suggests, shoppers have been well trained to expect the best deals to be available during the Black Friday period, so we can anticipate that November will convert a degree of that early research into sales. Last year, the conversion rate was 5.1 per cent in November, while it was just four per cent in October. It was surprising to see electricals break its six-month pattern of negative growth in October. With Black Friday looming very large in the public consciousness, we may have expected that trend of decline to continue as shoppers held off on any major purchases, anticipating a much lower price at the end of November. The release of a must-have item like the new iPhone model could have influenced behaviour, but it’s likely that the wide availability of discounting last month was also a determining factor.”

According to IMRG, retailers have been trying to detract from this lull by opting not to mention Black Friday at all in their marketing approaches in the run-up to the peak week.

The way the event has been marketed in the past, with its promises of “best of year” discounts, has led to the term ‘Black Friday’ wielding a strong psychological influence over shopper behaviour, IMRG has claimed.

Andy Mulcahy, strategy and insight director at IMRG, commented: “Black Friday has created this idea that there is ‘a time’ to shop in the lead-up to Christmas, but this has resulted in a lull in sales activity preceding Black Friday week. Consequently, many retailers are already running discount campaigns well in advance of the Black Friday week to help stimulate sales.

“We are tracking 210 UK retail sites daily throughout November and, on Monday, November 13 – one week before the peak week begins, 80 of them were actively promoting discounts on their home pages. Of that 80, just six were marketed as Black Friday events, three mentioned that their Black Friday event was coming soon and five used the term to run associated, but not actual, Black Friday campaigns – such as ‘the Black Friday warm-up…’ or ‘why wait for Black Friday…’. It’s also become common to use black backgrounds to campaign imagery to imply it’s Black Friday, but without overtly mentioning it.

“What’s interesting is that some of the discounts on offer are already very high – of the 80 actively promoting discounts, 46 had ‘up to 30 per cent’ as their headline discounts, with 33 of those marketing 50 per cent and over. This raises some interesting questions. Will the deals on Black Friday be bigger than that, or are deals that are just as good already available? Will shoppers realise they can get really good deals throughout November anyway and adapt their purchasing behaviour? Or will the psychological power of the term ‘Black Friday’ make them delay spending in anticipation that it’s still ‘the’ time to shop? And finally, based on the data above, does Black Friday now technically last for the whole month of November, just without using the name?”