Blog: Change is afoot in the retail calendar
Leonie Barrie | 2 December 2014
Change is afoot across the retail scene. Once a bellwether of US retailers' likely performance over the upcoming holiday, sales during the just-gone Black Friday/Thanksgiving weekend have dropped for the second year in a row.
A combination of ever-earlier promotions, the continued growth of online shopping, and an improving economy all appear to be changing the way US consumers approach what has traditionally been the biggest shopping weekend of the year.
But it also seems that consumer spending patterns are steadily shifting away from apparel to big ticket items related to the home, autos, accessories and handbags, smartphones, tablets and wearable tech.
David Strasser, analyst at Janney Capital Markets, even goes as far as suggesting "2015 could be the year retailers realise Black Friday/Thanksgiving super sales are a losing proposition."
While this is especially the case for vendors of consumer electronics like TVs, where manufacturers are stepping in to maintain brand integrity and have woken up to the fact that prolonged promotions only have a modest impact on demand but a massive impact on profits - the message doesn't seem to have reached apparel retailers, where promotions "remain aggressive."
Stifel Research analyst Richard Jaffe believes another issue here is the lack of newness, which in turn gives consumers little need to update their wardrobes. "Many of the trends [are] a continuation of what we saw in fall/winter 2013 and spring/summer 2014," he says, adding: "This will likely hold back apparel sales in 4Q."
But while the Black Friday pace seems to be slowing in the US, on the other side of the Atlantic it's taking off with a renewed frenzy. Some research suggests half of UK shoppers made a purchase, spending a record GBP1.6bn in the process.
High street retailers are under pressure to recoup lacklustre sales of knitwear and outwear following the unseasonably warm autumn, but like their US counterparts, a run of deals and promotions will eat into much-needed profit margin.
While it looks like Black Friday is set to become a permanent fixture in the UK retail calendar, those relying heavily on short-term sales are also set to become more deeply mired in the trap where shoppers refuse to pay full price and instead shop around for deeper discounts and offers.
Click on the following link for more insight: Is Black Friday losing its lustre?
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