Shopaholics awoke early this morning, ready and primed to take advantage of the sales and fight off those competing for the last stocked item of their deepest desires. Since 1932, Black Friday was considered the unofficial initiation of the Christmas shopping season. Despite its early inception, the term “Black Friday” was only coined in the 1960s; a reference to stores moving from the “red” which indicates a loss, to the “black” which indicates the making of profit. Another origin of the word originated at the same time from the Philadelphia traffic police, whereby the day after Thanksgiving caused congested streets, clogged with motorists and pedestrians, resulting in a very gloomy Friday indeed.
As retailers began to realise they could draw big crowds by discounting prices, Black Friday became one of the most popular days to shop – in 2014, 50 billion dollars were spent over the four-day weekend additionally consisting of Cyber Monday. With varying offers accounting for a whole range of stock, electronics and toys are usually most drastically discounted. Thanks to American retailers (such as Amazon and Wal-Mart owned Asda) this shopping craze entered the UK, where they wanted to offer customers the same involvement and opportunities experienced by our neighbours across the pond. Having seen the footage from previous years, the department store events equate to a modern-day Royal Rumble and the crazy personalities are exposed when prices are squeezed to the very limit. Even the Nice riots at Euro 2016 had nothing on this frenzy; Britain likes to shop and never stand in the way of retail therapy.
However, this confrontational aspect may be reducing. More and more, consumers are choosing to shop online. Despite the growth of the online market being a worldwide phenomenon – research from Google and PayPal suggests that online sales in the UK, US, Germany and China will grow by £320 billion between now and 2018, expanding the size of the online market to £645 billion – the emergence of Black Friday in the UK allows us to review the prominence of online shopping within our region. Napoleon once said that Britain is a nation of shopkeepers; now it looks like we are a nation of online shoppers.
Why is online shopping growing so drastically? The ease of assessing options, access to stock quantities and, for the lazy ones among us, the option to purchase all you could wish for whilst remaining on the sofa, makes online shopping the most appealing option available. The growth is further driven by the increasing power of smartphones, which is boosting mobile shopping – sales through smartphones increased by 90% from January to September. Retailers, as a response, have been investing more in their digital operations.
Although a growing phenomenon worldwide, there are a number of characteristics unique to the UK which caters for these e-retailers. A central aspect concerns the geography of Britain, relating to the transport links offered within. Being a (small) island, we are densely populated within a confined area, meaning that our motorway links offer lorries access to all areas of the UK, and the possibility of delivering to households within a day is now a reality. Accordingly, many retailers, a notable exploiter being John Lewis, positioned their stock warehouses in the midlands, giving full access for transport links between the South and North. The growth of e-commerce has, in turn, contributed to a rise of the number warehouses.
However, this model centred on the midlands has to be adapted. As with anything, competition requires innovation. To remain stagnant in a market means to fall behind your competitors, and businesses are having to constantly improve themselves so as to retain their customers. Such a concept grants no exception for these e-retailers thriving on this online expansion. To project themselves above their competitors, they are aggressively trying to reduce delivery times and windows. In order to deliver this goal, many are trying to position their warehouses on the edge of big cities, so as to be closer to their customers. Their attempts to do so has its difficulties, especially as the governmental priority is to build homes, which has limited the potential to increase warehouse capacity in such areas.
Whilst this growth in online shopping encourages consumer spending, it is not without its negatives. Retailers with physical storefronts have obviously been hit hard, and this is set to continue especially as online sensations set their sights on apparel and fashion. Furthermore, the oligopoly of supermarkets are forever expanding their pursuits into areas of retail other than groceries, and usually offering their products at a low-end, affordable price. This, combined with the ease of picking up such products whilst selecting your groceries again exacerbates the ease for the customer; able to experience all within one company. As more people shop from home, physical stores are being closed and shop assistants laid off. The retail industry could shed as many as a third of its 3 million jobs by 2025.
Whether perceived as good or bad, it is undeniable that online retail is a serious growing force. As time becomes limited and pay becomes constrained, consumers are looking for the best offers and easiest means of access. Through the power of smartphones and the internet, these retailers are able to directly target their demographics in terms of marketing, and provide the easiest access for product purchase. Innovation exudes throughout this field; many companies taking advantage of niche concepts such as interactive video for example, whereby if a model is wearing a particular item of clothing, one can click the clothing in the video and be taken via link to purchase the apparel. Notably Amazon (yes, they’re mentioned again, but let’s face it, they’re everywhere!) introduced its new product “Amazon Echo” earlier this year. One of the features of the hands-free device is that you can shout across the room to “Alexa”, the voice recognition bot, and ask her to purchase something from Amazon without having to move off your backside. In a world where now the access is not only easy, but we are bombarded with so much choice, retailers have to disseminate such offers / information in a simple and coherent way. The consumer becomes less attuned to reading large portions of text, preferring to skim and denote clear deals.
Black Friday sales this year are expected to set new records, and thanks to the online market you could complete all your Christmas shopping from your home, without the threat of being punched in the face as you and one of the locals tussle for the last standing discounted TVs in the store. Hopefully by the time you’ve read this article your stores are still in stock!
By Dre Efthymiou