The popularity of the Black Friday promotion is growing from year to year. According to analytics platform Periscope by McKinsey, 60% of consumers from the UK, France, and Germany were planning to participate in the November 27 sales in 2020, up 10% from 2019. In the United States, the number of participants in the traditional pre-Christmas event increased by 2% compared to 2019 – from 86% to 88%. Sales are an excellent opportunity to get the things people really need at a discount. However, there is a downside to this phenomenon, which is essential for responsible sellers and buyers to keep in mind. Let’s get acquainted with it, thanks to RBC.
High risk of COVID-19 infection
Crowds of people gather in stores during mass sales. In such conditions, it is almost impossible to maintain social distance, so experts fear that stocks may cause a sharp increase in the incidence of coronavirus. “There is no compelling reason for people to get together right now, especially given the fact that they can shop online,” says Katherine Anderson of Upstate Medical University in New York. “In my opinion, the benefit does not justify the risk.”
The general director of the research company Infoline-Analytica, Mikhail Burmistrov, is also skeptical about stocks during a pandemic. In his opinion, responsible salespeople should remember that it is “almost criminal” to gather crowds of people during such a period.
Analysts at Periscope by McKinsey are convinced that retailers need to be careful and do their best to keep stores from crowding. The company found that this year about 20% of buyers are stressed by the upcoming promotions. Most of these people are in the UK and the USA (36% and 30%, respectively), and the least in China (5%).
Consumer fears and government demands forced stores to change the format of Black Friday in 2020. In many stores, including the American Walmart and Home Depot, promotions started ahead of time. In addition, the number of customers in Walmart retail outlets did not exceed 20% of their capacity. Before entering, they had to put on masks, and all carts were pre-disinfected. Visitors to the American luxury department store chain Neiman Marcus Group had to book separate rooms for sellers to bring them clothes to try on. And those who were going to visit the shops of the Target chain were obliged to check the fullness of the nearest store in advance and, if necessary, reserve a place in the queue.
Greenhouse gas emissions during delivery
Another distinctive feature of Black Friday in the pandemic year is that many shoppers started to shop online. But experts remind us that this type of trade causes severe damage to the environment. A study by the British financial aggregator Money.co.uk showed that due to the delivery of goods purchased on Black Friday in 2020, about 429 thousand tons of carbon dioxide (CO2) could be released into the atmosphere. This is equivalent to the emissions from 435 roundtrip flights between New York and London. Analysts also calculated how much of the country’s popular postal services would produce emissions. They were guided by the forecasts of the Barclaycard company (part of the British financial agglomerate Barclay). According to it, shops made more than 116.6 million transactions during the sales period; this is 14% more than a year earlier. Analysts expected Hermes delivery service (13.9 million parcels last year) to generate 58.3 thousand tonnes of CO2 emissions, while Amazon (4.4 million parcels) was expected to generate at least 18.8 thousand tonnes of CO2.
The researchers recognized the British state postal service Royal Mail as the most environmentally friendly organization. The company employs 90,000 postal workers who often deliver packages on foot or by bike. In second place was Amazon. Clients of this company can independently pick up an order at one of 16 thousand points, many of which are served by small businesses. UPS has received the maximum score for the use of green transport: 10,000 new electric and hybrid vehicles are expected to appear in its fleet by 2024. DTDC, Speedy Freight, and Parcelforce received the title of the most environmentally friendly.
Money.co.uk also conducted a survey of 2,000 Britons aged 18 to 55. This year, 85% of them plan to make purchases during online sales. But only 11% think that the delivery of goods can harm the environment. Most often, young people aged 16 to 24 are worried about environmental issues (16%), and least often – people over 55 (8%). 35% of those surveyed admitted that they choose “next day delivery.” This is the least environmentally friendly option available: companies often fail to meet demand and are forced to use additional vehicles.
Only 20% of respondents are ready to compensate for the damage caused by delivery. “Consumers have a clear interest in reducing their carbon footprint when shopping online, but it looks like speed and reliability are the two parameters they pay more attention to when choosing a delivery service,” comments personal finance expert Money.co.uk Salman Hakki.
Reputation losses for sellers
Experts remind that online retailers face a lot of difficulties during peak periods. In particular, they do not always have time to pick, send, and deliver orders on time, which can negatively affect their image. Small companies should be incredibly attentive to reputational risks. So says Matthew Robertson, head of the British company NetDespatch, which develops software for automating delivery processes. He notes that the gains from sales growth on Black Friday could be diminished if the seller fails to deliver the goods on time. “Everyone is interested in having the delivery system ready for stress during the peak season,” says the specialist.
Scott Lindsay, head of marketing at eShopWorld, shares this opinion. “Customers can agree to delays, but because this is an important part of the customer experience, delivery times should be kept to a minimum,” he explains. Preparation is paramount, he believes: retailers should stress test websites and physical infrastructure ahead of time and reserve additional transport with freight operators if necessary.
Excessive spending and overconsumption
During sales, there is a temptation to buy something unnecessary – this is harmful not only for the wallet but also for nature. In 2019, French MPs proposed a legislative ban on Black Friday. They referred to the fact that sales provoke excessive consumption and waste of resources and bring losses to producers and sellers. 600 French brands supported the idea, and environmental protests took place in some parts of the country. This year, French retailers again called for a boycott of the sale. In their opinion, due to the pandemic, there is a high probability that many French people will shop abroad instead of going to small local stores, many of which are now closed.
The Russian environmental movement ECA launched the Green Friday flash mob in early November 2020. It takes place on the Ecowiki.ru platform in the format of webinars and live broadcasts. Participants can learn about how excessive consumption affects the planet, learn to consume responsibly and win prizes: eco-products, books, online stylist consultations. “We urge in 2020 to make a choice in favor of “green” Friday instead of “black” and, as an alternative to uncontrolled purchases of unnecessary things, to experience the benefits of reasonable consumption: saving the budget and taking care of the environment,” says Oksana Akulova, Ecowiki project coordinator of the ECA movement.
Some sellers go for gimmicks and deliberately inflate prices before sales to lower them later. British NGO Which? has become interested in this, helping consumers make informed choices, including through the retail market research. Six months before Black Friday in 2018, its employees began tracking the cost of 83 items: 49 from home appliances and electronics store Currys PC World, 20 from Amazon, 12 from John Lewis department store, and two more from Boots health and beauty store.
After the action, specialists monitored prices for another six months. They found that, both before and after Black Friday, 95% of products were selling at the same price or even less. For example, a Samsung soundbar cost £ 299 ($395) at Currys PC World during Black Friday. During the first month after the sale, the price dropped to £ 250 ($330) at least five times, and within six months – at least 13 times to £ 279.9 ($370). The De’Longhi coffee machine at John Lewis sold for £ 399 ($527) during the promotion, but over the next six months, the price repeatedly dropped to £ 368 ($486). The Amazon Echo smart speaker, which was discounted for £ 54.9 ($72.5), was selling less before the sale.
“Our investigation shows that this popular event is a big buzz, and there are few real discounts on it,” says Natalie Hitchins, Which? Expert for goods and services for the home. The organization advises buyers not to make impulse purchases or panic about the fact that there will be no more discounts. They should also analyze the dynamics of changes in the value of goods and pay attention to the price before the sale.Check out how to build a sustainable wardrobe here.