30th November 2016
A survey shows that the number of parcels shipped in connection with Black Friday in the Nordics increased by 30%. You would think that retailers are excited about the record Black Friday sales, but trends indicate that more on- and offline shops think that Black Friday is unprofitable.
The Nordic online consumers have really embraced Black Friday and all its online bargains at Friday, November 25. A study by Consignor shows that the number of parcels related to Black Friday sales has increased by 30% since last year. In 2015 the increase was 48% compared to the year before.
“We expected that the number of parcels shipped in connection with Black Friday would be record high again this year – and it was. What is interesting is that the increase this year was less pronounced than the growth in 2015. Everything indicates that Black Friday is a lasting tradition in the Nordics, but where many bargains get black asphalt underneath them before they end up in consumers. The most common delivery method for Black Friday parcels in the Nordic countries is delivery to a drop-point i.e. parcel lockers or shops and kiosks. This is probably because drop-point delivery is cheaper and more convenient for consumers, “says Steffen Pasgaard, Vice President at Consignor.
The table below shows the percentage of Black Friday parcels from Nordic online shops sent out into the world.[ish_table align=”left” border_color=”color1″]
|From Denmark||From Norway||From Sweden||From Finland|
|1.||84% to Denmark||94% to Norway||93% to Sweden||97,7% to Finland|
|2.||8% to Sweden||5% to Sweden||2,5% to Denmark||1,5% to Sweden|
|3.||5% to Norway||<0,1% to Finland||1,7% to Finland||0,5% to Denmark|
|4.||2% to Finland||<0,1% to Denmark||1,4% to Norway||<0,2% to Estonia|
|5.||1% to Germany||<0,1% to Germany||0,4% to Germany||<0,1% to United Kingdom|
[/ish_table]Although increased sales sound good in the ears of most salesmen, trends show that several retailers are seeing Black Friday as unprofitable. Experts advise that the Black Friday surplus should be found in purchasing prices and logistics.
Low purchasing prices and logistics can save the Black Friday surplus
Another study by LCP Consulting shows that British retailers are increasingly seeing Black Friday as an unprofitable and unsustainable promotion. 61% of UK retailers share this opinion, while only 32% had this view of Back Friday last year.
The true profit impact of Black Friday is not driven by sales increases and gross margin; it is driven by the additional operating cost and the complexity of managing operational peaks,says Stuart Higgins, retail partner at LCP Consulting.
But besides the importance of preparing the logistics for Black Friday, retailers should also calculate how Black Friday sales may affect their budgeted Christmas sales, according to Director of the industry association Dansk Detail, Jens Birkeholm:
“It is important that Christmas sales are not going to pay for the discounts on Black Friday. Retailers should instead try to persuade their suppliers to pay for some of the discount.”
In 2015 this calculation showed red numbers at Danish toy giant Top-Toy, where the normal extra revenue in December fell by 13 million EURO. This resulted in a microscopic profit of nearly 1 million EURO against about 13 million EURO in 2014.
How Black Friday affects on- and offline stores this year, only time will tell, but so far Black Friday is still the golden egg and Achilles heel of on- and offline stores.
Text by: Consignor email@example.com
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