Black Friday could kill physical retail rather than cure
Working in retail is like being in the midst of the Charge of The Light Brigade – fire is coming from all directions but we are ill-equipped in defence.
We are facing wide spread sweeping structural change across all retail sectors and our so-called business-friendly Government is not helping matters with the introduction of new policies such as the living wage.
According to figures from the Centre for Retail Research this will cost retailers £3.26bn a year in extra pay, national insurance and pension contributions. It is also predicted to cut jobs and hours in the sector by 42,000 FTE and lead to an extra 6,274 store closures between 2016 and 2020.
Retail is also being hammered by rates and an apprenticeship levy of 0.5% of payroll.
All of this is largely outside our control.
Retail Hokey Cokey
However, sometimes we shoot ourselves in the foot. The introduction of Black Friday in the UK is embarrassingly turning into the retail equivalent of the Hokey Cokey: in, out, in, out, you shake it all about.
Some of the so-called deals were embarrassingly poor, with the Royal Mint ‘splashing out’ on free postage for its Black Friday deal and one retailer, which I won’t name, advertising a showerhead for £2.49 – originally priced £2.79. Neither of these offers will revive retailing fortunes.
Even the consumers are confused, with disappointing footfall in stores being reported for UK Black Friday 2015 but online holding up well. Surely the point of Black Friday was to drive people into stores; at least this was the premise behind it in the US where it originated. On this basis, it was a self-defeating act by the retailers participating in this year’s event, particularly with the follow-up Cyber Monday event just getting under way.
This is only going to add to the pressure on those retailers with a nationwide store estate and a disjointed multichannel offering. What is becoming very clear is that the way the consumer now interacts with the retailer has changed forever and the digital route to market can only get stronger and stronger.
This will accelerate the structural shift, with the need to downsize existing retail estates becoming not only a business priority but also an economic imperative.
The problem with bringing things across from the States is that they don’t necessarily translate well – crayfish, grey squirrels and mink being examples of disastrous US imports that are killing off the indigenous population. Is Black Friday another one to add to the list?
What next – the introduction of a Thanksgiving promotional day? Come on UK retail, I am sure we can come up with our own uniquely British ideas to drive footfall into the stores. As a starter for 10 here are a few suggestions: Morris-dancing Monday, Worm-charming Wednesday or Summer Solstice Saturday? Over to you marketing departments.