Black Friday 2023 Wash-Up Report:
Michael Boyle
Design | Sourcing | Manufacturing | Brand Licensing | Buying | Distribution | Customer Experience | Digital | D2C | Marketplaces | Brand | Creative | Marketing | Strategist | eCommerce | Logistics | Retail | Luxury
The Black Friday and Cyber Monday (BFCM) shopping extravaganza has etched its indelible mark on the UK retail landscape. Amidst economic challenges and the ongoing cost-of-living squeeze, UK consumers exhibited intriguing shopping behaviours during this pivotal period.
This comprehensive report delves into key trends, sales figures, and consumer preferences observed during BFCM, with a primary emphasis on the UK market.
Black Friday online traffic was down 12% on last year, according to data intelliegence platform SimilarWeb, however some retailers fared better than others. In the winners camp stood Chinese marketplace Temu, however the phenomenal 74,150% year on year growth it achieved was largely because the business had not long launched this time last year.
1. Overview of UK Retail Sales Growth:
According to data from the British Retail Consortium (BRC), UK retail sales growth remained measured in November, with a 2.7% increase in annual terms. This figure, while below the 4.2% rise recorded a year ago, reflects consumer caution amidst the cost-of-living crisis. The trend mirrors October's 2.5% increase, suggesting a strategic approach to spending.
2. Fashion Purchase Returns:
AI platform True Fit's data reveals a fascinating facet of consumer behavior during BFCM—almost one in every six garments bought on Black Friday is expected to be returned. The challenge for retailers is balancing sales with margin protection, especially considering that Gen Z and Millennials lead in returns.
3. Online Spending and Payment Methods:
Adobe Analytics reported Black Friday as the biggest single UK online shopping day of 2023, with consumers spending ￡1.04 billion online, reflecting a 4.1% YoY increase. A noteworthy aspect is the ￡101 million spent through "buy now pay later" (BNPL) services, contributing to 9.7% of total online spend. The utilization of Click and Collect services increased by 24.7%.
4. Impact on Retailers and Economic Outlook:
Consumer optimism about economic pressures increased, with concerns about inflation and food prices reaching the lowest level since December 2021, according to Barclays. However, weak sales growth poses challenges for retailers, raising concerns about potential collapses in early 2024, particularly for online retailers experiencing prolonged sales declines.
5. Insights from Shopify:
Shopify reported record-breaking Black Friday and Cyber Monday sales, reaching $9.3 billion globally from independent businesses—a 24% surge compared to 2022. London emerged as one of the top three highest-selling cities globally for Shopify merchants, underscoring the positive revenue momentum for merchants during BFCM.
6. Discounts and Consumer Loyalty:
Consumer shopping behaviors reveal a preference for brands they love. Almost half (47%) of all purchases from Klaviyo customers during BFCM were made by repeat purchasers, emphasizing the heightened importance of customer retention and loyalty. The 20-29% discount bracket converted the best across various verticals.
7. AI-Powered Personalization and Dynamic Content:
Brands are increasingly leveraging AI tools for personalization, with room for improvement. During BFCM, messages personalized with dynamic content through Klaviyo's platform earned 17% higher average click rates and 40% higher average order conversion rates than non-personalized messages.
8. Sustainable Fashion and Ethical Consumerism:
One notable trend during BFCM was the increased interest in sustainable and ethical fashion. Consumers, especially from younger generations, demonstrated a growing preference for brands emphasizing eco-friendly practices and ethical sourcing—a reflection of the broader global shift toward conscious consumerism.
9. Rise of Direct-to-Consumer (D2C) Brands:
D2C retailers experienced a milder decline in site traffic compared to multi-brand retailers, highlighting the appeal of these brands offering deeper discounts on a broader range of products. Strategic timing of sales, as exemplified by Skims, added to the buzz around the brand during BFCM.
10. Cross-Border Shopping:
According to Shopify's data, 19% of sales during the BFCM weekend were cross-border orders, emphasizing the strength of UK export for Shopify merchants. This indicates that UK consumers are not only seeking deals locally but also participating in the global e-commerce landscape.
11. Impact of Inflation on Average Order Value (AOV):
Inflationary pressures were evident in increased Average Order Values across various product categories. While the Average Cart Size increased, the AOV rose at a greater rate due to rising prices. Consumers, becoming more cost-conscious, engaged in strategic shopping behaviors to secure the best deals amidst inflationary challenges.
12. Fastest-Growing Fashion Sites:
Examining the fastest-growing fashion sites during BFCM reveals a diverse landscape—from designer clothing sites like Percivalclo, Coggles, and Calvin Klein to mass-market retailers such as Crew-clothing, Everything5pounds, and Ego. The data mirrors the economic uncertainty in the UK, with consumers exploring options across the price spectrum.
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13. Top-Performing Websites and Challenges Faced:
Top Performers:
Challenges Faced:
14. Consumer Behavior and Website Traffic Insights:
15. Impact on High Streets:
16. Global E-commerce Platforms:
17. Banking Disruptions Impact on Black Friday:
18. Credit and Debit Card Transactions Insight:
19. Amazon Best-Sellers:
Best-Sellers on Black Friday:
20. Black Friday Markdowns and Consumer Spending Patterns:
Apparel markdown levels peaked in November with an average discount depth of 47%, persisting above 40% throughout the year. This shift in consumer spending patterns, with a focus on discounts earlier in the month, poses challenges for retailers seeking a delicate balance between enticing offers and maintaining profitability.
21. Singles’ Day 2023 in the UK:
Singles’ Day, a global shopping phenomenon, saw an 18% increase in consumer spending compared to the previous year in the UK. While not yet mainstream, UK retailers, including French Sole and BrandAlley, tapped into this opportunity, offering attractive discounts and promotions during this celebration of self-indulgence.
Final Thoughts and Strategies for 2024: Charting a Course for Retail Success...
Retailers now stand at the crossroads of consumer expectations, economic dynamics, and evolving market trends. The 2023 BFCM period in the UK showcased a nuanced landscape where caution intertwines with consumer loyalty, and the quest for personalized experiences resonates profoundly.
The resilience of UK retail, marked by a 2.7% increase in annual sales, signals a determined consumer base navigating economic challenges.
Looking ahead to 2024, retailers must harness the insights garnered from BFCM to refine their strategies. Embracing sustainable practices, leveraging the power of direct-to-consumer models, and enhancing personalized experiences through advanced AI tools stand out as crucial avenues for success. Navigating the ever-evolving landscape requires adaptability and innovation, ensuring that retailers not only weather challenges but emerge stronger in the dynamic realm of consumer expectations and market shifts.
Michael Boyle is a highly accomplished marketing professional and the owner of?Modernity Marketing ?— a digital and creative marketing agency.
Michael is a sought-after freelance marketing consultant overseeing digital marketing channels, e-com, budgets, logistics, customer care, creative direction, and spearheading brand launches from concept to reality.?His breadth of expertise makes him a rare go-to authority for premium D2C brands.