Black Friday was originally an American tradition taking place on the day after Thanksgiving. Retailers usually offer massive discounts and most of us will have first heard of it due to early morning stampedes taking place and being reported on the news. But are we likely to ever see Black Friday at Airports in Travel Retail/ Duty Free?
Note that this year Black Friday will take place on Friday 24th November 2017 followed by Cyber Monday. The question posed is an interesting one for Travel Retail. The short answer is that Travel Retail will not generally run this type of activity, with the only exception of something similar being Dubai Duty Free when they offer a 25% discount across all skus at their store for a few days only to celebrate their anniversary – click here for the 2016 Dubai Duty Free promotion.
Another point is that this kind of activity seems to work better with online retailers and department stores/ electrical goods stores. In Travel Retail, one of the main obstacles will be the margin requirements from the landlord (such as airports), the time required to set up such a large scale promotional event over only a few days, the operating costs and the low stock hold being held on location due to space restrictions. Additionally, the traffic of passengers would not necessarily increase due to this activity (although you could argue penetration and basket increase could be higher due to it).
In general, the type of consumer events such as Cyber Monday/ Black Friday/ etc are retailer driven events as a whole, they tend to work well when attached to a specific time of the year (driving seasonal sales) and create a significant increase in demand over a very short period of time on a limited number of skus.
The categories of interest generally tend to be driven by consumer electronics, toys, etc in the domestic market at least.
The main retailers to benefit in future are likely to be the online retailers as they have much more flexibility in communicating with shoppers and also in discriminating the offer depending on the information they hold on the specific consumer.
The main benefit for retailers:
- High turnover driven by flash sales
- Depletion of slow moving stock
- Sales of higher margin items driven by association with loss margin leaders (or sales of high margin items such as warranties or replacement plans)
Risks for retailers:
- Pressure on retailer margin – as more volume sold through on promotion and level of retailer self funding will be high
- Cannibalization of seasonal sales – as consumers start to wait for seasonal sales until deep discount levels are available
- Retailer brand disloyalty by consumers as they become more price sensitive
- Negative experience at store if products not available and too many people looking for bargains (does not apply to online sales)
Based on the above and returning to the question of whether we are likely to see Black Friday at Airports, my personal view is that this type of activity would be most likely deployed to encourage pre-sales online ahead of the travel by passengers. This could allow for the retailer to better manage peaks in demand of promotional stock without impacting on the shop floor; it could also mean that products would be introduced for promotional purposes only, i.e. “once it is gone, it is gone” approach; and finally it could be a nice way to raise the useage of ‘shop & collect’ services with this kind of offer only available through pre-sales.
One to consider…..any thoughts or comments are as always very welcome…
One thing is for certain, none of us would like to see these kind of scenes at any store, whether at the airport or your local store….