This article was first published by the Guardian on 18th November 2015
Things were much simpler growing up. I still have vivid recollections of the media coverage of the big shopping events: turning on the Oxford Street Christmas lights to herald the start of the festive shopping period; and the people camping outside Harrods the night before the sale.
After the seasonal bargains were snapped up, we experienced a sustained period of normality. There wasn’t much else to distract shoppers from their regular habits and the retail promotional calendar reflected the lives we lived.
Since then we’ve seen the huge commercialisation of key calendar dates. All Hallows’ Eve is now the full-on American Halloween experience and running alongside the more child-centric activities, there’s the increasing popular Día de Muertos, known more commonly as Mexico’s Day of the Dead.
Mothering Sunday, Father’s Day and Valentine’s Day are all key dates in the retail calendar. Singles’ Day in China, originally created by Alibaba for those without valentines, is now the biggest shopping event in the world. This year’s event marked the first time Chinese shoppers could buy global brands and sales topped $14.3bn, a 60% increase on 2014, making it bigger than Black Friday and Cyber Monday combined.
The challenge, now that hardly a month goes by without a big retail event, pre-season, mid-season or end of season sale, is that we’re training shoppers never to pay full price.
Events such as Black Friday involve deep discounts and often include products that are at the premium or luxury end of the market and would never usually be available at less than full price. The cost in margin and brand values is not sustainable, which means that brands and retailers must now reconsider this approach.
In the UK, Asda has done just that and will shun the Black Friday sales this year. My favourite is US outdoor retailer REI’s approach. Its #OptOutside initiative will mean that it closes on Black Friday – the idea being that the American public will be inspired to get outdoors and not go shopping on the day after Thanksgiving.
There are routes that provide brands and retailers with the opportunity to create value rather than destroy it. Dynamic pricing – big in the travel sector and used by online retailers such as Amazon and Net-a-Porter – will become a larger feature in retail as brands and retailers work towards offering price flexibility based on day part or by targeting offers to distinct groups of people via email campaigns and vouchers for mobile devices.
As the level of personalisation in retail increases, personalised pricing and data-driven offers will create a more rewarding and targeted experience than Black Friday.
Collaborations between brands, or brands and retailers, provide another way of creating interest without recourse to discounting. I call this “the power of X”. However, as was the case of the chaos around the Balmain x H&M launch, these collaborations now carry the risk that the real value isn’t created for the retailer and brands involved, but for profiteering eBay traders.
But it’s still possible to create product ranges based around new and exclusive features that provide resistance to the discounting trend. For example, discounting became such an issue in the electronics sector that when Samsung partnered with designers Ronan and Erwan Bouroullec to launch Serif TV, it decided only to sell them through its own e-commerce platform and in high-end furniture stores.
Serif provides a good example of where brands are working hard to circumvent traditional retail models. Clearly things have changed since my childhood and I’m not suggesting we go back to those times. But retailers and brands need to wean themselves off the addiction of Black Friday discounts and focus instead on reframing value for their customers.