Black Friday is coming up fast and we are well and truly entering the business end of the year for retailers. But will there be some festive cheer for them at the end of a tough and exceptionally demanding year?

The signs are that this year’s Black Friday event will see solid consumer engagement – busy, although perhaps not blockbusting. Over half of consumers expect to make a purchase through the Black Friday/Cyber Monday period according to our latest research, and one in seven shoppers say they are likely to spend more this year than last. Younger consumers are particularly likely to engage, with 56% planning to buy a Christmas gift and nearly three in ten anticipating spending more than they did in 2019.

Another boost is that news of an impending COVID-19 vaccine has improved consumer sentiment, with nearly a third of consumers saying they feel more confident in their long-term financial situation and a fifth now planning to spend more this Christmas.

However – broadly similar to last year – 45% of consumers say they do not engage at all with Black Friday. Meanwhile, approaching half of respondents say they have already done the bulk of their Christmas shopping. And the proportion of people who say they may make impulse purchases has halved from last year, to just 10% now. There is a fair amount of caution around, with over a quarter of people saying they will not make purchases for the sake of it.

Still much to play for

Events like Black Friday, which over the last year or so have stretched to a week rather than the one day event it started life as, are, by their nature, unpredictable – so it may take off in unexpected ways once it is actually here. After all, 30% of consumers say they have not yet decided whether they’ll buy any Christmas gifts during the period or not. There is still much to play for – can retailers devise enough enticing offers to sway the undecided and bring a cash injection in?

Without doubt, there is a marked wildcard element this year and not just because this year the event falls when England and parts of Scotland are in lockdown. For some segments of the population, the lockdowns and the inability to take holidays and engage in many leisure activities has led to them having more disposable cash than usual. But others are facing significant cash pressures and concerns over their future employment and therefore will be looking to dial non-essential spending back.

Digital locked in

Over the last few years, Black Friday has increasingly moved online and one racing certainty is that this will continue. Over 60% of shoppers expect to make their purchases digitally over the period, while about the same proportion say that the amount of shopping they do online has increased since the pandemic began back in March.

The move to online purchasing has accelerated through this year and is now both habit and choice for many consumers:  a locked in step-up. The winners are likely to be those retailers that have invested in their digital channels to create easy, smooth and seamless shopping experiences across mobile and online formats.

In-store convenience for some

Retailers with no or very limited ecommerce facilities will certainly lose out. However, despite the current lockdown, over one in ten consumers still plan to make purchases in-store. The biggest winners here are set to be the supermarkets, the chief destination for a third of these shoppers – a sign that the convenience of being able to pick up a range of bargains alongside food shopping holds significant sway.

What’s more, over a fifth of people say they will be looking to make luxury food and drink purchases through the Black Friday period, another potential avenue for the big grocers to pick up more of the shopper’s pound. However, unsurprisingly, as in previous years it is technology and electricals, followed by clothes and toys that top most shoppers’ wish-lists.

Capacity challenge looming

As the scramble to get ready for Black Friday continues, retailers nevertheless need also to be thinking very carefully about their strategies for the crucial weeks beyond to Christmas and New Year. There will be the usual difficult decisions to make about what volume of discounting is needed to encourage sales without unnecessarily sacrificing margin.

This year, though, there is another significant issue coming into play. With so much business through online channels, fulfilment and delivery is going to be a herculean task. Already, we have seen a steady line of retailers – including Amazon – warning of the need for shoppers to move early if Christmas deadlines are to be met. There are only so many white vans after all. But our survey finds that despite all the warnings, a third of shoppers are still planning to leave much of their Christmas shopping until nearer the big day. This could create significant issues. Capacity in-store will be reduced due to social distancing requirements; while online fulfilment is already at full stretch. The last thing retailers want is disaffected customers whose Christmas orders don’t arrive on time. The industry needs to continue to get the message out there – this year is different, please shop early if you can.

We have seen different categories experience significant differences in demand: footwear, clothing and accessories have generally been significantly challenged on the downside and home improvements, furniture, technology and food and drink experiencing have enjoyed tackling the challenges that come with significant uplift in demand.  Despite all that 2020 has thrown at them (and consumers), our retailers will be pulling out all the stops to ensure that we consumers get what we want, when we want it, and however we want to buy it.

To find out more about consumer behaviour and the impact it’s having on consumer spending as well as the impact on other behaviour please download our latest report on Responding to consumer trends in the new reality.