Black Friday Campaigns: Will Covid-19 Put a Spell on It?

  • Fashion blog, INDUSTRY
  • 5 min read
  • 3 November 2020
Black Friday Campaigns: Will Covid-19 Put a Spell on It?

Key Takeaways:

    •        Black Friday is now much longer than just one day. Black Friday Deals are offered the whole week and finish with Cyber Monday. Some retailers chose to offer a low flat discount on the entire collection, like H&M. Some others opted for a high discount rate on selected articles like Zara.
  •       • If the share of 2020 lockdown discounted articles is higher than in 2019, during the same period, we can expect the markdown of Black Friday this year to be lower compared to last year.
  •       • New arrivals on the Black Friday week are visibly postponed to the week after. This is an attempt to avoid taking any cost of a reduction in the new collection. Except for Zara, which follows a completely different approach than its competitors.

 

 

Coming from the Anglo-Saxon countries and rapidly adopted by the whole world, Black Friday quickly became ubiquitous. Occurring every last Friday of November, it marks the start of the holiday season.

Retailers adopt different approaches to this event. One thing is certain, and Black Friday sales are not about one specific day anymore. Brands are taking advantage of that day to discount during the week and leading into Cyber Monday.

 

 

Thanks to Retviews data, we observe that there are two approaches retailers are adopting: either they discount selected articles before Black Friday, offering bundle deals, and then make a relatively low flat discount on Friday. Or, they only markdown a high selection of articles on D-Day. The former approach is taken by the Swedish group, H&M, and the latter by the number one fashion retailer, Inditex.

What should we expect this year in terms of Black Friday strategies for retailers? Should we expect high or low discount rates from retailers with the disruptions the world is facing?

 

 

Two strategies possible. Which one should the brands opt for? 

It comes as no surprise that Covid-19 affected and continues to impact businesses. As discussed previously in our Covid-19 reports, some retailers like Zara chose to increase their discounting level while others, like H&M, did the opposite.

What retailers are doing is comparing their level of discounted articles to 2019’s level.  This information will predict if the retailers will invest more or less in the 2020’s Black Friday strategy. Indeed, if the share of 2020 discounted articles is lower than the one in 2019, retailers have a window of opportunity to go heavy during the Black Friday week, which should probably be the case for H&M.

 

 

For a retailer like Zara, we should expect less discounted articles compared to last year. During the first half-year of 2020, the Spanish retailer has discounted more than it usually does. Thus, we should not expect massive discounts from Zara this last Friday of November.

Those are the two possible scenarios. Based on the graph shown above, we should not expect brands to discount massively during Black Friday Week.

On the actual day, we should expect the same type of discounting strategy as last year: a relatively low discount on the whole collections. But does it include the brand new ones?

 

New arrivals: skipped on the Black Friday Week.

Black Friday’s turnover continues to grow each year and is known as THE day of promotions. Unsurprisingly, retailers are quite reluctant to launch their brand new collection that week. The reason being that no one wants to see their brand new collection already discounted as it lands on the sales floor or online platform.

 

 

Nevertheless, this strategy does not apply to Zara. Indeed, the Spanish brand is only discounting a bigger selection of articles during Black Friday. This allows brands to drop the new collection without discounting it. As seen in the graph above, Zara drops new articles during the whole week except on  Black Friday.

Subsequently, on Saturday, the highest-selling day for Zara and all retailers, the brand drops its new collection. This strategy entices the customers, eager to find great bargains and the brand new advertised collections.
This allows Zara to sell more of the full-price articles while its competitors face reduction costs on their entire collection.

 

 

Its main competitor, H&M, is once again doing the opposite. This can be explained as the Swedish brand strategy favors a low flat discount on the day’s entire collection.

 

With the current situation, will people still shop?

Whether Black Friday and Cyber Monday will occur this year or not is still being debated. Some wonder if this current situation will spell an end to one of the most notable events on the retail calendar.

Others even question whether the western countries should favor Singles’ Day on the 11th of November, like in China.

Additionally, retailers have struggled a lot during the lockdown, and the current climate is still not suitable for shopping. According to PWC, almost half of US customers expect to spend less on holiday shopping this year, preferring to travel. 

However, this is the right timing for brands to clean some of their stock. If retailers want to play it safe and still please their customers, maybe shifting their strategy from a low flat discount to selecting articles at a higher discount rate should be the solution. Wait and see. 

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