Five Predictions for Black Friday
Will Black Friday continue to grow this year despite so many negative trends? We break down how each headline factor from the World Cup to consumer confidence will matter for performance.
We like to stick our necks out and make predictions for Black Friday. In 2021, it was a prediction of modest growth as the economy emerged from multiple lockdowns. Consumers spent rather than saved, but this was tempered with the muting effects of inflation and global supply chain disruption.
This year everything has got more turbulent, to say the least. The World Cup, strikes, interest rates, consumer confidence at record lows - filtering a solid prediction out of all these variables is hard for any business. That said, we’ve broken down the key factors and made 5 top line predictions below.
One. Black Friday will see minimal growth - but growth nonetheless
With the caveats below, minimal Black Friday consumer spend growth of 5% to 8% year on year is our prediction. Consumers seeking value and discounts will override the downward pressures which lead to people choosing not to buy at all.
Consumer confidence has bottomed out and stabilised in the UK, US and the Eurozone since the late summer freefall, according to the OECD. Coupled with this, the CBI reports that Oct in the UK saw a minor rebound.
Against this stabilisation, it’s also clear that the trend in the UK is for people to choose saving over borrowing, as the Bank of England report. Smaller purchases, and lower price points, will be in the ascendant this Black Friday.
Clearly, inflationary pressures will starkly fragment Black Friday spend across income groups. The IFS report that the lowest 10% of earners are being hit the hardest by inflation, with higher deciles of earners affected incrementally less the higher the band. So pricing and market positioning are - as ever - key to forecasting Black Friday volumes for each business.
Two. The World Cup will interrupt ad pacing
This will be the first time that the World Cup falls into Q4. Not only that, but the first fixtures cross with the Black Friday weekend - England vs United States at 19.00 GMT on 25th Nov. This pitches a pivotal retail event against a global sporting phenomenon, so advertisers need to check timing for games affecting viewing and attention patterns in each market.
The opening weekend of the Premier League, for example, depresses Paid Social demand, but the popularity of Black Friday sales will move demand around. The demand for Black Friday sales will flow around the football, so it’s a phasing issue and not a top line revenue one.
Three. Postal strikes mean that delivery messaging needs to be crystal clear
Royal Mail workers are set to strike on 24th and 25th Nov, and again on 30th nov and 1st Dec. This is important for absolutely clear delivery messaging, but again demand will only be hit for products which need to be delivered fast. If people know what the delivery window is, and why, then it’s the discount which matters.
Four. Performance Max will drive growth within Google’s advertising suite
Google’s volumes are still growing - with YouTube being the element which has stalled. Within its advertising suite, Performance Max was launched a year ago. With a year of maturity and take up behind it, it’s now the prime campaign type to drive Black Friday growth as its application of smart bidding across Google’s inventory and pushing of shopping feeds will mean high speed reaction to all of the effects outlined above as they play out.
Five. Good value and bulk buy messaging will succeed
People who are in-market this Black Friday will not just respond to value messaging, but be sensitive to the kind of value being promoted. That doesn’t just mean big headline discounts and red sales banners. It is the combination of pricing and a more multi-dimensional concept of ‘value’ - positive messaging about the brand and sale items as being both worthwhile (e.g. not a poor quality product wheeled out for the sale), and in line with the customer’s own values. Cheap, but also good. In line with this, growing take up of bulk buys and bundles are in line with people watching their monthly budgets and wanting to be prudent - so don’t forget to consider these in your sale offerings.
Further grounds for optimism
Further grounds for small-scale optimism in the face of a more gloomy outlook for 2023 are that despite inflation and consumer confidence figures, economic indicators are not yet falling back into negative growth. Added to this, although digital marketing giants have posted varying results recently, ecommerce continues to grow faster than retail overall - so forecasts for online only Black Friday performance should add a further two to three percentage point boost to the minimal growth we expect overall.
