Black Friday brought online retailers a small sigh of relief this year. Following months of decline in the channel against a backdrop of the cost-of-living crisis and postal strikes, online retailers collectively achieved 0.7% year-on-year growth in November. While this figure is low and suggests some customer hesitancy, it marks the first growth recorded by IMRG and Capgemini’s Index since April 2021.
Traffic growth to online retail sites peaked at 2.7% year-on-year for the week commencing 13 November, predominantly owed to early Black Friday activations, which were particularly strong across home, beauty, and electrical products. Interestingly, there was a 6.1% decline in traffic in the week to 20 November, signalling customers’ response to early campaigning.
As predicted, the number of retailers launching Black Friday campaigns was higher this year. However, these early activations did not deliver increased revenue. When comparing the average revenue share across retailers that increased the length of their Black Friday campaigns by a week or more, there was very little difference between 2022 vs 2021, ranging from 1-3%.
Data from Black Friday week itself (21st – 28th Nov) revealed that the total market saw slightly better performance than anticipated, up 0.3%. Health & beauty and electricals saw the highest growth levels at 3.8% and 2.8% retrospectively, while clothing experienced the biggest decline, down 1.1%.
Andy Mulcahy, Strategy and Insight Director at IMRG, commented: “November came in above expectation, which meant the month as a whole saw overall demand increase. This was surprising when it has been so low for the whole year. It does feel like that volume may have been pulled forward, with people doing their Christmas shopping earlier this year to take advantage of discounting to a greater extent than normal. Online sales for the first week of December were down -8.1%, which supports that idea. The coming period will be defined by delivery problems too, with all carriers struggling with the additional volumes due to the Royal Mail strikes.”
Simon Binge, Commerce Senior Manager at Capgemini, added: “Whilst any sign of YoY growth can be seen as good news, the context is likely to be a cause for concern for retailers. Early campaigning failed to stimulate demand over Black Friday week and, as the data suggests, may have contributed to the traffic declines witnessed in w/c 20th November. Furthermore, if consumers have indeed brought forward their Christmas spend to capitalise on discounts, then retail could be in for a rough December, especially given the Royal Mail strike activity and its impact on consumer behaviour. If the net effect on sales for November and December ends up being negative, we’re likely to see significant activity in January as retailers fight to clear seasonal stocks and take share of an ever-shrinking consumer wallet.”
