Marketing is the heart of any business and discounts have proved to be one of the most lucrative steps to increase the profits and brand visibility. As the brand visibility increases and the words spread, sales also steadily increase. Discounting has become an art of selling and more than any other day, it is Black Friday that results in record breaking footfalls in Canada, UK and the United States. Clothing retail stores like Wal-Mart, Macy's and e-retailers like Amazon have attracted large crowds on Black Friday in past years. The astounding discount per cent on apparel on Black Friday is a strategy that has resulted in increased sales. In 2012, apparel stores in the US offered average discount of 36 per cent on Black Friday, which was almost 50 per cent rise since 2009; the deals of 2014 are expected to remain equivalent or exceed that increase.
A discount rush to catch fancy
The prices, together with growing consumerism, have changed the concept of Black Friday shopping into a smart and well-equipped money making phenomenon. The apparel stores have recognised the opportunity that this day offers, and fashion stores both physical and online are making most of it. While customers do not need discounts or sale to go out for shopping, discounts are merely highlighted to catch the fancy of prospective customers, who do not realise that savings on Black Friday are not much as compared to daily prices of clothes. According to FactSet research system, in order to keep the profit margin stable, many apparel retail stores factor the discounts into original pricing. The reality is that Black Friday discounts lure customers to pay reasonable value for garments.
The high-end brands like Harvey Nichols, Selfridges, Liberty, etc, are yet to become a part of huge circle of retail stores that offer discounts on Black Friday. The discount phenomenon that is seen as a lucrative marketing strategy was criticised by Chanel designer Karl Lagerfeld, who labelled the idea as degrading for shoppers who pay the full price for products. Apparel retailers of Canada were also forced to introduce Black Friday concept, following the fear of cross border shopping. But, this year in Canada, sales for apparel industry reflect rising restrain on part of customers. This will likely be seen in Black Friday apparel sales too. Canadian apparel retailers are not ready as yet to offer wide range of discounts on products, thus, even if some garments will have a decent discount rate, it's unlikely to extend for many products. It is predicted that discount ploy of Black Friday in Canada is more of a propaganda that will result in limited revenue this year.
The UK angle
The scene in the UK is slightly different. Black Friday, which originally started in the US, has taken over the United Kingdom's apparel market, as well. Last few years have resulted in increased sales volume and garnered good profits, which has resulted in more apparel retail players keen on participating in Black Friday sale. John Lewis, online director Mark Lewis, shared that Black Friday 2013 attracted traffic that was fourteen times more than anything the brand has ever witnessed. This year John Lewis is offering hundred proactive deals, both in store and online. Another brand that plans to capitalise on this day is Marks & Spencer, which estimates sale of approximately 1.7 million products online.
However, Neil Saunders, managing director of Conlumino, which is a retail analysis company, mentions that Black Friday is merely pushing forward sales to an earlier point in the festive period. Retailers often consider Black Friday sales as an indicator of customers' spending pattern for the entire holiday season, which is not necessarily true, as future sales are not always affected by a particular day of holiday season. Some of the estimates are based on employment figures released by the US Bureau of Labour Statistics. These estimates simply reflect the expectations of apparel retailers and may not stand accurate when it comes to actual sales.
Potential to bump up sales
The common thread that binds apparel markets of various countries on Black Friday is that in the last few years, customers have invested in deals offered on Thanksgiving, instead of waiting for Black Friday. Deals on Black Friday are time-bound (and often last for less than 24 hours), which also encourages customers to lookout for pre-Black Friday offers. There are retailers like Wal-Mart and Target that often offer hefty discounts prior to coveted Black Friday. Yet, some retailers like Levi's, Ralph Lauren, and Backcountry, are more keen on offering conventional Black Friday sales.
The hullaballoo surrounding Black Friday may appear overrated, but, for majority of apparel retailers, this day is one of the most important days to improve sales. Representative of businesses on London's most important shopping streets, New West End Company, has estimated apparel and accessories sales to reach 220 million during the Black Friday weekend starting November 28. London's busiest shopping streets Oxford Street, Regent Street and New Bond Street will garner huge profits this Black Friday. This day is also expected to become the most eventful online shopping day of the year, with Visa expecting 360,000 spent every minute online with 8.5 million transactions. On the contrary to other garments, the deals in winter gear are likely to remain unimpressive this year. The discounts on these items will crop up during the clearance sales from January to March.
Apparel sector has changed with growing competition and Black Friday deals are an extended version of the same. Black Friday is a defining day for future sales and apparel retail stores are trying to catch up with each other this season.