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What will Black Friday 2021 bring?

4 minute read
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What will Black Friday 2021 bring? - ©iStockphoto.com/filo

Black Friday is upon us. Falling on 26 November in 2021, it’s a day when people around the world go online specifically to look for the best deals and bargains. And if they are not offered these by their favorite retailers, they look on competitors’ sites.

A day initially popularized outside the USA by Amazon has become an international phenomenon. The raw figures help explain why Black Friday is so important. According to Adobe Analytics, Black Friday in the USA will generate $9.5bn in e-commerce sales. For Cyber Week as a whole, which runs from the Thanksgiving holiday through to Cyber Monday, 25-29 November, online sales will reach $36bn.

What will Black Friday 2021 reveal about consumer behavior?

As impressive as these figures are, it’s important to realize that Black Friday doesn’t just help to drive the retail sector, it also reflects changes in society and the economy. This can be clearly seen by looking at 2020, when US consumers spent $9bn online on Black Friday, a 22% increase on 20192. This reflected how the pandemic drove consumers towards e-commerce.

In contrast, Adobe’s predictions for Cyber Week in the USA suggest a year-on-year increase of 5% in sales. This is less than the 10% year-on-year growth expected over November and December as a whole.

Clearly, something has changed, but what? To answer this question, we need to consider a combination of factors:

  • The easing of the pandemic means people are more confident about shopping in bricks-and-mortar stores
  • Supply chain issues are impacting the ability of brands and retailers to offer discounts. There is pent-up inflation in the system
  • The Adobe figures suggest we are becoming less responsive to Black Friday promotions and more willing to spread our purchases

 Let’s consider the relative importance of each of these in turn-

The easing of the pandemic: the year-on-year e-commerce growth figures for Black Friday in 2020 were exceptional and never likely to be repeated. In 2021, bricks-and-mortar retail is making a comeback, especially in those countries that have rolled out vaccination programs. Despite high-profile failures and larger retail chains continuing to look critically at the number of locations they operate, people like stores – especially those that offer a sense of retail theatre and/or specialist knowledge.

After spending so much of 2020 in lockdowns, this holiday season may turn out to be the year we all rediscover shopping malls and high streets as social spaces. In addition, many of us are returning to the office and so spending more time in urban centers.

Supply chain difficulties: the global economy is being affected by a combination of:

  • Increased demand as economies recover
  • Rising energy prices
  • A shortage of components
  • Production constraints in countries still affected by the pandemic
  • Ongoing disruption within the logistics sector

According to Flavio Romero Macau, a supply chain expert at Edith Cowan University in Western Australia, the world faces “a perfect storm” of inflationary pressures. This will impact on brands’ ability to offer discounts, with Adobe predicting that Cyber Week discounts will be in the 5-25% range in 2021, against a historical average of 10-30%.

Resisting the marketers: the final factor here is the most difficult to quantify and contextualize. It’s clear from the Adobe figures that we are becoming more resistant to the temptations of Cyber Week while at the same time increasing our overall spending. This may be because Black Friday deals sometimes turn out not to be quite as good as advertised, as Which? has reported in the UK. As well as seeing this media coverage, we have all become more sophisticated about comparing prices before pressing the buy button.

How will we look back on Black Friday 2021?

The first thing we should emphasize here is we are not suggesting that Black Friday or the holiday season are becoming less important. Globally, we will collectively spend $910bn online in November and December 2021. It’s more that Black Friday is now so established in the retail calendar that we shouldn’t expect the high growth of previous years to continue indefinitely.

But this just makes it more important for brands to get their strategies right. Recently, the shortage of semiconductors led German car manufacturer Opel to close its plant in Eisenach. In such a business environment, any brand offering heavy discounts may be cannibalizing it own sales at a time when it will later have difficulty in meeting demand because of supply chain issues.

More subtly, we may be at a point where consumer behavior is changing. One reason for the growth in bricks-and-mortar retail may lie in the way retailers are becoming more sophisticated at driving cross-channel sales. Many Black Friday purchases will be click-and-collect orders.

Sustainability plays in here too. There is evidence we are all growing wary of the idea of ‘pile it high and sell it cheap’. Deloitte recently reported that 28% of people have stopped buying certain products because of ethical or environmental concerns. That figure rises in younger age groups, with 50% of Gen Z consumers saying they are reducing how much they buy.

Against this backdrop, it is perhaps telling that several major retailers in the USA, including Walmart, won’t be open in the USA at Thanksgiving. The retailer is putting staff well-being and work-life balance before in-person sales.

Learning lessons

Taking all of the above trends together the overall lesson is that brands need carefully to calibrate their holiday season offerings. Walmart stores may not be open on Thanksgiving, but plenty of people will be online and Walmart will cater for this – as of course will Amazon.

More generally, at a time when the global economy has been through such disruption, brands need to monitor what works and what doesn’t especially carefully. In this way, lessons can be learnt for Black Friday 2022 – just as Walmart learnt in 2020, when its stores closed in part because of the pandemic, that the idea of closing bricks-and-mortar locations for a day might actually be welcomed by its customers.

Finally, part of preparing for next year will involve analyzing which products sold where and when, and for what kinds of prices. To gain these kinds of insights, brands need to keep tight control over product content.

Learn how Product Information Management can help!