This article was first published by Retail Week on 6th November 2015
New retail red-letter days such as Singles’ Day should be encouraged but they should meet shoppers’ needs and build value for retailers.
Retail hates a slowdown. This applies to the relentless nature of our calendar of big events as much as to sales figures.
Starting with the January sales, through to Valentine’s Day and then Easter. Father’s Day in June (in the UK at least) into ‘back to school’. Then it’s Halloween, before we finish the year with a glut of discounting in the shape of Black Friday and Cyber Monday that precede the Christmas splurge.
Such a busy retail calendar is no bad thing in itself, building sales and interest in the shopping experience is vital throughout the year. But have we gone too far and created events that just don’t work for the shopper while also eroding value for brands and retailers?
We need to transform the retail calendar. Take back to school, for instance. A good example of a retail event in need of a review. It’s no longer good enough for stores to create an experience towards the end of summer, just when the kids are returning to school. As with most retail, people are spending more time online researching back-to-school products, leading to an increase in online spend in the two months before schools return in September. Brands and retailers really need to assess the value of holding a big one-off retail event in favour of a long-term strategy.
Black Friday looms
A bigger issue, in the UK at least, surrounds the arrival of Black Friday in November. Last year it appeared to be a storming success, the UK version of the US tradition accounting for £810m in retail sales in one day. But this had fundamental implications for retailers and for the marketing strategies of brands, driving consumer behaviour towards the expectation of bargains and forcing retailers into a discounting strategy ahead of the big Christmas sales period.
Funnelling so large a proportion of retail spend into one day based on discounts is doing UK retailers few favours. In the US, Black Friday and Cyber Monday clearly cater to a consumer need based around leisure time at Thanksgiving. This just doesn’t apply in the UK. Instead, following a hard period of trading when even the darling of the high street John Lewis Partnership reported a 26% fall in pre-tax profits in the six months to 1 August, we’ve created an event that encourages consumers to stampede into stores expecting big discounts, even on premium brands. Instead, it would be better to focus on building quality, exciting, in-store and online experiences that offer an alternative to discounting.The point is to judge each retail event on whether it is relevant to consumers’ lives and to be brave enough to scrap those that are not.
In light of this, Singles’ Day, now the world’s biggest shopping day due to its popularity in China, will become even bigger. It will grow far beyond its origins as a creation by China’s online retailer Alibaba (which took £5.9bn in Singles’ Day sales in 2014) into a global phenomenon because it is based around shopper desire. A November ’anti-Valentine’s Day’, it creates a new spending opportunity based around a desire to belong and be involved in a community rather than on bagging massive discounts.
So let’s be ruthless. Encourage events, like Singles’ Day, that embrace the needs of shoppers while building value for retailers, and shun those that do not. When people are fighting in the aisles we’ve gone too far down the discount route. Supermarkets and other retailers have been clever in decluttering the in-store environment by ditching some famous but underperforming brands. Now it’s time to do the same with the retail calendar.