Black Friday no silver bullet for retailers as November records below average growth

UK online retail sales were up 11.5% year-on-year (YoY) in November, according to the latest figures from the IMRG Capgemini e-Retail Sales Index.

Though Black Friday itself achieved a slightly higher growth of 11.7% YoY, this overall monthly figure was notably below the November growth average for the past four years (+18.3%), and is in line with the generally lower rate of growth recorded throughout 2017. Indeed, November’s overall YoY growth was also lower than the 12.7% average of the last 3 months (Sep-Nov).

Looking specifically at Black Friday performance, it was evident that it was the medium-sized retailers (those whose websites generate between £10-100 million a year) who tended to secure the highest share of sales growth overall, while the results from the large retailers (those whose websites generate over £100 million a year) were more mixed.

With retailers ever conscious of edging out their competition, monitoring of discount levels across 210 websites in November revealed that they were widely available throughout the whole of November – not just during the Black Friday and Cyber Monday period – and this is likely to have impacted on overall revenue growth. This implies less of a focus on pricing strategy for a particular day and more on extending the discount purchase window order to spur growth.

Despite the extended discount windows, many sectors saw a decrease in YoY growth over the month. In particular, having experienced its first YoY growth in six months in October, electricals suffered a -0.9% YoY fall. While week 4 of November – Black Friday week – was up 22%, the rest of the month performed extremely poorly. Week 1 began at -17% YoY, week 2 at -3%, and worst of all was week 5 at -30% YoY growth.

Capgemini principal consultant in retail customer engagement Bhavesh Unadkat commented: “Year on year performance is down across key categories, reflecting the continuation of a tough year for e-retail. While the Black Friday window offered a small spike in performance, it was nowhere near as impactful as the industry would have hoped. The growth in average basket value actually supports this, with ABV being up across most sectors. Its figures essentially serve as a proxy for discount levels – implying that customers are downgrading on brand or price point but increasing the volume of items included within their baskets.”

IMRG managing director Justin Opie added: “Black Friday is all about discounting in the mind of the shopper and it’s perhaps unsurprising that, while ordering activity is high over that period, revenue growth is struggling to keep pace over November as a whole due to the long lead-in to the Black Friday period.

“It does raise a question regarding how retailers can actually assess success over that period. On the one hand, securing share of sales away from their competitors is obviously always important to retailers, but it might be that the measurement of success over the Black Friday period is less about order volumes and more about the longer-term view – how new customers acquired can be converted into regular, loyal, higher-margin customers through the quality of the follow-up marketing after the discounting peak is over.”