Back to lobby

The positive and negative impact of Black Friday and Cyber Monday for fashion retailers

Maybe it seems obvious, as we approach the holiday season, but companies embrace Black Friday and Cyber Monday to boost sales, right? According to the research, 85% of UK consumers plan to do some Black Friday shopping and estimates suggest they will spend a total of £7.5bn over the annual weekend shopping event.

Cyber Monday deals draw an even bigger crowd with brands experiencing their biggest annual online sales event. Over the past decade, these Cyber Monday and Black Friday promotions have become core to the annual retail calendar. So for all online shopping sites and brick-and-mortar destinations you would expect Black Friday and Cyber Monday to be a positive thing all around. But that’s not always the case.

Considering the positive and negative impacts, we’re going to take a deep dive and look at whether your business should embrace this one day shopping event or boycott Black Friday.

Positive impact #1: More Sales

Let’s explore this one beyond the headlines. Over 70% of US and UK retailers choose to participate in the shopping event each year. Shoppers are now conditioned to hold off in the weeks prior knowing they might be able to secure a better deal. Retailers can benefit from a much-needed pre-Christmas shopping sales boost.

This boost is not insignificant: 2019 saw sales volumes of $9.2billion, 2020 reached highs of $10.8bn and 2021 dipped slightly to $10.7 bn. Despite the turbulence, these figures are massive. There is no denying that Black Friday sales result in increased store and online purchases.

Positive impact #2: Shift unwanted stock

Many retailers see Black Friday and Cyber Monday as an opportunity to clear old inventory to introduce fresh stock in time for Christmas. For fashion brands, the Black Friday weekend is an opportunity to discount and shift last summer’s fashions.

With efficient shipping systems in place, fast fashion brands are well-placed to rotate seasonal looks at the end of each November. Consumers embrace appealing deals, cheap goods and lower prices and are willing to pay now for pieces they might not wear until the following spring.

Positive impact #3: Acquire new customers

Shopping deals invariably attract large crowds, many of which are regular customers but some of which will be shoppers who have never bought your products before. Brands can use seasonal sales events on and offline to attract new consumers.

Discounts and lower prices grant retailers an opportunity to appeal to the price point of curious shoppers. When a Purchase carries less financial risk, a shopper might be more willing to chance their money on an untested brand. If the retailer offers quality goods that feel worth significantly more than the sales price, they could become a permanent convert.

Negative impact #1: Selling at a loss

Big Brands can afford to sell some items at a loss knowing that on aggregate they will continue to maintain a healthy profit. But, smaller e-commerce retailers, who have products shipped worldwide, may incur overall losses.

The pressure to offer attractive discounts can drive massive traction to a website or a physical store but sellers have to be careful to calculate if the cost of those sales positively impacts the overall financial health of the business. Speaking about the risk to retailers’ margins Nike’s Gabriela Bergamasco explains the challenge for companies:

“As the consumer is already expecting offers, we can not avoid it (Black Friday). If we want a share of their spending, we must attract customers’ attention with offers. However, we must be careful with our product margin to guarantee final results.”

Negative impact #2: The Environment

According to research, 80% of products bought at Black Friday sales end up in landfill, are incinerated or are recycled poorly and only 29% of electronic waste caused by Black Friday is recycled.

The boycott Black Friday movement is primarily concerned with the global environmental impact of unchecked consumerism. They argue that the increase in plastic packaging, the use of diesel using trucks and the waste generated all contribute to climate change. Encouraging conscious consumers to reduce carbon emissions by not taking part is their primary goal.

But their message has also impacted many brands that now also choose to skip the seasonal sales event altogether. Ikea, Arket, Ganni, H&M-owned Monki and sustainable shoe brand Veja have pledged not to participate.

Some other companies mitigate their impact by offering conscious consumerism and donating all or a percentage of sales to charities. famously, back in 2016, Patagonia pledged to donate 100% of its Black Friday profits to environmental groups.

The modern conscious consumer is aware of the environmental impacts of their shopping choices. Seeking eco-friendly brands or avoiding companies with a bigger carbon footprint is part of their pre-purchase considerations. Modern consumers who won’t shop with brands that reflect their priorities and concern for the environment may think twice if they see your brand participating in a Black Friday or a Cyber Monday sale.

Negative impact #3: The dreaded returns

Following any major sales event, customers might first enjoy the discounts, rush to make a purchase and then suffer from buyer’s regret. Return policies designed to alleviate shopping fears when browsing an online store can mean pain in the days that follow Black Friday and Cyber Monday for consumers and retailers alike. Brands with less efficient shipping systems might incur painful costs in organising a return.

Black Friday and Cyber Monday discounts might encourage consumers to shop, but they will also spark an increase in post-sales returns that can cost a retailer money. A sale is only as good as the number and value of products retailers don’t have to refund.

Retailers can mitigate the waste by offering customers solutions that ensure they buy the right option the first time around. For fashion, this can mean AI-powered technology that guarantees accurate sizing recommendations or virtual fit while consumers shop.

Our Verdict

Considering the positives and negatives it seems there is a way for brands to offer deals at a lower price point during the Black Friday and Cyber Monday sales event. It just requires a little more thought. Selling at a loss can be avoided by closing monitoring your shopping event and limiting your shopping days.

The environmental issues can be addressed by considering your consumer and adapting your approach or your messaging. Eco-friendly brands can reflect on their consumer’s values and choose to opt-out entirely or follow Patagonia and use the event to raise awareness and essential donations.

Lastly, if your Black Friday campaign aims to deliver maximum sales and minimum returns, consider the tools and solutions you need to empower your shoppers to make buying decisions they won’t regret.

Back to lobby

Never Miss Out

Sign up to receive our latest news and insights

    Thank you!
    we’ll keep you updated

    Don’t miss out!

    Sign up to received news, insights and  updates