I have been fascinated this year by the rise of promotion of “Black Friday” offers by many retailers – and the point has been reached in 2014 where police have been called to shops to separate fighting shoppers trying to secure the best offers. Whilst this is not the first year that this day has been “celebrated” in the UK, it is certainly a relatively new phenomenon. Black Friday has historically been an important shopping day in the USA, being the day after the Thanksgiving holiday, which many American workers have as an additional day’s break. It has no real significance in the UK, other than being pay day for a number of employees. So, how has it become so important for the retail trade?
For me, it is an interesting example of both saturation marketing and globalisation. Much of the early promotion of Black Friday Offers has come from the large online retailers, and typically the American originating businesses. That concept has then been picked up in earnest by other retailers in the UK, to a point where it actually appears to be making a difference to retail demand.
Looking through the hundreds of items in my deleted emails, the travel industry has largely ignored the event. That is probably understandable, as the outbound industry in particular is in its lowest sales season, with most travel businesses more interesting in gearing themselves and their staff up for “peaks”, by holding retail conferences and getting marketing material lined up. You can’t help but wonder whether we are missing a bit of a trick – if every travel business did a little Black Friday promotion, it would probably pay back, particularly as it is a day when people are shopping both on line and on the high street.
However, there actually is very little difference between the general retail sector’s focus on Black Friday, and the travel industry focus on Peaks. For some years, I have questioned whether the post Christmas period is, or should be so important for holiday sales. Yes, it remains a key period for summer holiday bookings – with probably 20% of summer holidays being booked in the period from the second weekend in January through to the end of February, so it cannot be ignored. However, you do begin to wonder whether that volume of sales is driven by genuine consumer demand, or whether it is the travel industry’s own version of saturation marketing creating the demand. We now see a massive increase in holiday advertising on TV and elsewhere starting from Christmas Day, with much of that advertising supported by significant discounts to stimulate demand. If sales are not meeting our expectations in January, we address that by increasing the level of discounting. Whilst it is sensible to reduce our risk as far as possible by selling our prime stock early, it does seem curious to me that we end up giving large discounts on that prime stock, rather than assuming that we can maximise the yield on it at a later (or indeed, earlier) date in the sales cycle.
It would be interesting to make the comparison between Black Friday and Peaks to understand how much the electronics and other retailers are selling their prime stock in Black Friday sales or clearing out older stock. Discounting at the peak selling period only makes sense if the volume return justifies the discount.
Another interesting contrast is the length of the Peaks period. For most travel businesses, the enhanced advertising spend starts on Boxing Day (or often Christmas Day, despite the ludicrous cost of TV advertising then) and runs through until late February. In practice, the peak in sales doesn’t happen until the second or third weekend in January, and probably runs for about a month. It seems a lot more cost effective to promote for a single day, or for a short period for January sales, as the main retailers do, rather than sustain two months of advertising expenditure.
If we are going to continue to regard the Peaks period as key to our summer volume, would it simply make more sense to try to shorten how we, and our customers think about Peaks? Should we even try to create our own equivalent of Black Friday – Summer Holiday Saturday, or something similar – and would such an idea work?
Many things happen in the travel industry because that is the way they have always happened. If the retail sector in the UK can invent a whole new spike in demand by importing Black Friday, isn’t it about time we did something similar in the travel industry?