Black Friday 2022: What’s the score?

Photo by CardMapr.nl on Unsplash

THE BIGGEST ecommerce event of the year leading up to Christmas will clash on the field with the greatest single international sports event of the year; the FIFA World Cup. To what extent will Black Friday be overshadowed by it and how will this affect peak trading? (Note I am writing in early autumn) It might be an idea to consider the fixture list and plan your campaigns strategically around them, rather than kicking the ball too high and missing the net entirely.

During big games some sectors will suffer more than others; for example, the World Cup is good marketing for companies who sell sports goods or beers and wines, whereas it may have a lesser impact on sites that offer goods such as health and beauty. It can be argued that businesses may find it difficult to demand attention when attention is being pulled elsewhere.

The World Cup is just part of it though; below are three common questions I get asked surrounding Black Friday 2022:

Q1 – Is it a Black Friday or a Black November?

For a number of years, there has been a trend for businesses to start their campaigns and discounting earlier, with some starting as early as three weeks prior. Bigger retailers sometimes force their competitors to discount earlier, though the biggest jump continues to be in the week leading up to Black Friday.

Comparing data from 181 retailers over the last 5 years, it is unsurprising that 2020 saw the biggest push for campaigns throughout November; this greatly owes to the height of the pandemic, which saw the closing of non-essential retail stores. As customers were in lockdown, many retailers decided to push their online campaigning to make up for the loss of revenue in stores that year. In 2021, data shows that there was slightly less pressure to go as early, but the pattern is similar so we have entered a new settled stage of campaign durations.

In 2021, roughly two-thirds of retailers did not have any kind of discount available at the beginning of November (as shown in chart B). However, this number decreases across the month, suggesting that there are many campaigns throughout the month – but they’re not all called Black Friday. Businesses will likely see a lot more traffic coming November time as customers are more inclined to look at more websites than they normally would. 

While, generally, more recent generations voice negative sentiments associated with Black Friday, this hasn’t stopped it from being the biggest annual event in retail. Retailers need to secure their fair share of traffic in the run-up to Christmas, and customers like deals, and with this balance, it will continue to be this massive event in our calendars, constituting a ‘Black November’ of discounting. As time goes by will it evolve to reflect growing shopper concerns around issues such as sustainability? Possibly. But, looking at where it is now, that evolution may take a while. 

Q2 – Are discounts going to be bigger?

In answer to this, comparing the rate of discount offered by 170 retailers between 2020 and 2021 shows 42% were lower, 39% were higher, and 19% offered the same. 2020 was a problematic year, the year of the pandemic, and 2021 saw a big supply chain problem whereby retailers did not always have the right stock they planned to use for their campaigns. As shipping costs were at a record high leading up to Black Friday, retailers sometimes had to base their campaigns around stock they already had and hoped for the best. Each year presents new kinds of problems, and 2022 looks set to be dominated by economic ones. Ultimately, there is no definite answer to the question of discounting experimentation this year.

With the extremely difficult and febrile economic situation this year, retailers will have to research and decide on what discounting strategies suit their needs. There is tension between customers who want to budget effectively by choosing the cheapest option and businesses trying to reduce the impact of discounts on their profits.

Q3 – How much impact will the World Cup really have?

And so finally, to the World Cup – does it actually matter that it clashes with peak trading in retail?

Black Friday week starts on 21st November, and England are playing Iran at 1pm (BST) on that day; they are also playing the USA at 7pm on Black Friday itself. The honest answer is that nobody has a clue whether that will cause significant disruption or minimal; it will probably vary by demographic, and may push demand patterns around a bit. For example – the 7pm kick-off on Black Friday may focus traffic earlier in the day. The key point is to be aware of the fixture list and avoid marketing activity during games when people are likely to be watching the TV.

But, while many people will be tuning into the football at their local pub with their friends, with retail marketing out of sight out of mind, other, perhaps more significant factors come into play in Black Friday’s success rate. There is likely to be some of the worst economic turbulence in decades towards peak, so what does this mean?

A cost of living crisis has swamped the UK, and with the rise of the energy price cap in April, week-on-week (WoW) growth (which tracks whether the amount of money spent online went up or down compared to the previous week) decreased from nearly 10% in the first week of May 2019, marking a normal pre-pandemic year, to nearly -2% for the same week in May 2022. There are other big spikes of growth in 2019, as per chart D, which may relate to discount campaign activity and Father’s Day in June, whereas the 2022 lines are flatter by comparison, suggesting demand is weaker overall. 

There has been consistent ambiguity around energy cap prices this year, but at least there is something in place now. Will this boost customer confidence sufficiently to support good performance for retailers over Black Friday and peak trading? If this wasn’t enough, supply chain issues from 2021 have persevered, causing retailers to increase their prices and experience reductions in stock. It is therefore seeming unlikely that growth will go significantly into the positive for the rest of the year. 

A Black Friday during a dark year; let’s hope some light will shine around the corner in time for Christmas.