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Black Friday…Worth the Headache?

Black Friday will soon be here, and sales are forecast to top £1billion in the UK that day. Some have been warning, however, that Black Friday doesn’t make the impact on businesses that some assume.

Marks & Spencer’s Patrick Bousquet-Chavanne, executive director for marketing, said “It’s too early to call this year – the UK retail market is clearly in a better place in terms of consumer mindset. But I do not believe those big spikes dramatically inflate the outcome of the season. You just have a reshaping of spending.”

While retailers have to fight for a piece of the pie on that one day, they also have to deal with shipping issues. The massive quantity of goods ordered online on that one day have to be delivered in a timely fashion.

Danny Bagge, UK head of retail for IBM, said that the hidden costs of Black Friday and Boxing Day shouldn’t be ignored. As he said, “They are coping with volumes that are 600 per cent higher than on an average day. You can cope with the online aspect of that by throwing in hardware and testing your systems. But in the warehouse that means six times more staff, forklift truck handlers and delivery van drivers. You just can’t do that in a day. The key question is not whether Black Friday increases revenue. It is whether Black Friday is going to increase profit – and I think the jury is out on that. Operationally the cost of meeting it is just too extreme. Not just the cost of fulfilment, but then the cost of all the returns.”

Time will tell if Black Friday is really a benefit to retailers or an added burden.