How did Black Friday get its name?
With all the shopping activity that takes place the Friday after Thanksgiving in the USA, the day became one of the most profitable days of the year for retailers and businesses. Because accountants use black to signify profit when recording each day’s book entries (and red to indicate a loss), the day became known as Black Friday—or the day when retailers see positive earnings and profits “in the black.”
Now a significant event on the Australian retail sector and certainly given a COVID turbo boost for Black Friday online sales, retailers are now seeing Black Friday as a significant event.
Last year, The US alone saw $7.4bn in online sales alone achieved with tech products as the big call out. ‘Buy online’ searches increased by over 50% and Black Friday retailer ads launched in October this year.
Brazil is the country with the highest search interest in Black Friday, according to an analysis of historical search data from SEMrush. Interest in the shopping holiday peaked in November 2018, jumping 83% from the previous year and remains at the same level as at October 2019.
The US does not place silver either: that post is taken by France. France is also among the biggest climbers in terms of interest in the shopping period, with search volume jumping 306.76% between November 2017 and November 2018. Since 2018, interest in the retail holiday has grown a further 49.5% as at October 2019.
The US doesn’t even get the bronze on its own, sharing the podium with Germany. While France and the US had the same search volume in November 2018, it’s the difference in this year’s October search volume that separates the two. The US saw its search volume grow by 22.26% from November 2018 to October 2019, versus a 49.5% growth for France over the same period.
Interestingly, this is not the first-time search volume in the US has hit peak levels. Interest was last this high back in November 2013. Since then, interest in Black Friday has waned.
On the other hand, interest in Black Friday from German shoppers is at an all-time high, with search volume increasing 49.59% between November 2018 and October 2019.
Australia ranked equal 17th overall for Black Friday search volume. Search volume has increased 22% from November last year to October 2019 and 309% since 2014. However, on a per capita basis, Australia is currently third with Brazil and the US 1st and second respectively.
Australians spent $3.9bn on Black Friday and Cyber Monday with forecasts this year to be at $5bn or basically 1.4% of the yearly retail sales nationally. A recent survey of 1,003 Australians reveals that 71% – equivalent to 13.8 million Australians – plan on shopping this Black Friday and Cyber Monday. The research shows Aussies will spend $3.9 billion in November on a variety of products including clothes, beauty, gadgets and travel
What can we conclude?
- Interest is certainly growing domestically and globally.
- It is an online retail dominant event – accelerated by COVID.
- It is a period of heavy discounting by retailers (and suppliers in many cases) – this will be advantageous when sales in a specific product promoted are deep and strong – less so if a retailer only offers skimming products with lower margins.
- Post-Covid margins will be tight in some categories this year – might see some sales being bought in certain categories such as fashion.
- 1.49% of Australian retail sales only.
- Boxing day alone is 4.8% on average.
- Huge pre-research day notably device-driven – consider that online conversion will be circa 3-5%, balance of activity will be site visits.
It is essentially a sales event and we haven’t had a lot of those in the last year so this will temper the appetite of consumers.