Australian retailers pounce on Black Friday
But if Black Friday 2016 has made one thing clear, it’s that the borderless world of e-commerce has shipped the shopping holiday express to Aussie shoppers, who are increasingly using their wallets to vote in favour of pre-Christmas discounting.
It’s not the first time Australians have flooded to the websites of American retailers like Macy’s, JC Penney and Barnes & Noble to take advantage of slashed prices. Even with the Aussie trading at 74 cents to the greenback, Australia was still the third most popular international shipping destination over the weekend this year.
But over the last three years, an increasing number of Australian retailers have also taken part. Household names like David Jones and Myer are now headlining a group of forward looking players such as ASOS, Cotton On, Kogan, The Iconic, Stylerunner, Red Balloon and Ebay.
“[Black Friday] was roughly equivalent to [online] Boxing Day sales last year – it was a phenomenal success for us,” Myer CEO Richard Umbers told Inside Retail Weekly at a Retail Doctor breakfast in Melbourne last week.
Myer and David Jones stopped short of branding their discounts as Black Friday deals, which consisted of up to 50 per cent off selected items storewide. Instead, they chose to merge Black Friday and Cyber Monday into a three-day ‘Christmas Spectacular’ (David Jones) and a ‘Super Cyber Sale’ (Myer).
“Increasingly, the retail calendar is driven by big events throughout the year,” Umbers said. “I’m all for creating new experiential retail events throughout the calendar that help us all bring the whole shopping industry to life. The fact that this one is online doesn’t matter; it’s essentially the same thing.”
Umbers isn’t the only one optimistic about the future of the holiday Down Under. Cotton On told IRW that they recorded 87 per cent year-on-year in store sales growth over the weekend, reflecting $3 million in extra sales.
“We see this year-on-year increase as a strong sign of customer demand that our brands are responding to in an accessible way, through both online and in-store sales in the lead up to the Christmas period,” said Cotton On Group general manager, Felicity McGahan.
The rising tide of Black Friday
The increasing popularity of Black Friday appears to be occurring across the board. Data compiled by point-of-sale software company Vend has claimed that Australia’s high street retailers experienced a six per cent increase in retail spend compared to the November average, and a seven per cent increase in sales on the same weekend last year.
The shift is a result of exposure to international marketing and the propensity of social media platforms to generate hype is driving Australia’s adoption of the Black Friday and Cyber Monday phenomenon, according to Red Balloon CEO Nick Baker.
“There’s recognition that [Black Friday] has spread into Australia,” Baker said. “If you’re online at all over that four-day period, you will get hit with some kind of ad or notification that tells you there’s a deal on.”
“It will become an ingrained behavioural thing. Look at Halloween, it’s very much an American thing, but it’s alive and kicking within our communities here,” he continued.
Baker doesn’t think the penetration of the shopping holiday will slow down anytime soon, pointing out that although another big shopping event so close to Christmas creates challenges for retailers, it’s well-placed to fit into an early bird dynamic that’s not too close to 25 December.
“If [Black Friday] had been a week or two later, we wouldn’t have been interested because it would hit us during the major Christmas spending time,” he said.
“You have to use it so it’s not just a one-time thing. It draws in people who will come for a deal on X, but come back later for Y. It really helps with that effective retention because it gets Red Balloon in people’s faces,” Baker explained.
Boxing Day sales in decline?
Deloitte’s head of retail, David White, believes that the increasing prevalence of Black Friday and Cyber Monday is a signal that Aussie shoppers are looking for discounts earlier. In an interview with IRW, White predicted that Boxing Day sales are in decline, and that the American festival is picking up the slack.
“It’s the timing. Shoppers are leaving Christmas shopping later and later and retailers are getting more nervous, leading to earlier discounting,” said White. “They’ve seen Black Friday and Cyber Monday as a way of wrapping up their discounting strategy around something that’s a little bit bigger than their individual efforts.”
“Waiting until Boxing Day is a slowly declining trend. People want stuff now and they just aren’t willing to wait. Black Friday will get bigger, but probably not as big as in the US,” he added.
Euromonitor’s head of research, Tim Foulds, is less optimistic, pointing instead to comparative advantage of local events in driving pre-Christmas discounting.
“We do not see Black Friday as having a major impact on Australian consumers to the retail scene as yet,” said Foulds. “The most important reason for this is that the far more popular Click Frenzy precedes Black Friday by a few weeks, leaving Black Friday in the shade.”
“[Click Frenzy] is Australian, making it easy to have items delivered, and enjoys the participation of most local retailers.
“Australian consumers who want to buy brands not available locally buy products directly from American retailers, but this is hampered by the time difference and more difficult delivery arrangements: local consumers in general prefer local websites,” he continued.
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