I briefly touched on the subject of Black Friday in last week’s Blog, but now that the dust has settled, I am better placed to offer a few thoughts on the subject. Rather like the overall trading picture, the feedback I’ve had has been decidedly mixed.
Talking to a selection of suppliers, it seems that some retailers experienced a surge in demand, while others fared less well – there was no consistent pattern. The challenges presented by Black Friday are well documented: the reduction in margin is a key issue. I saw a forensic examination of the numbers posted on LinkedIn by an American toy company owner, which inferred that neither suppliers nor retailers make any profit at all on the high- profile Black Friday sale items. I am not sure if the ‘zero margin’ effect would be quite as pronounced here in the UK, but there is no doubt that everyone in the chain takes a considerable hit in terms of profit.
As ever, the media focused on the fact that some offers were not all they seemed, and there is no denying that some retailers used ‘smoke and mirrors’ tactics to imply huge savings which were perhaps not as great as were being portrayed. I declined the opportunity to print a press release identifying some of the guilty parties, as it would be palpably unfair to draw conclusions from a couple of individual examples.
The conundrum is arguably one of expectation versus commercial reality: consumers are looking for ‘wow’ offers that are almost too good to be true, and given the level of promotional activity that has already taken place over the past month or two, retailers rarely have much further wriggle room.
Timing is also an issue: many believe that Black Friday comes a little late for the toy industry. Some have suggested that it would be far more effective if it took place just after Bonfire Night – otherwise, there is a risk that consumers are being encouraged to delay their purchase in the hope of making incredible savings (which may or may not come), which brings its own set of challenges.
I have some sympathy with that argument, and also the accompanying belief that sales suffer in the weeks running up to Black Friday. However, I can also offer some tangible evidence which muddies the waters, from what some may see as an unlikely source – John Lewis.
John Lewis is not necessarily the first retailer which springs to mind when the subject of Black Friday is raised, but it may interest you to know that the retailer increased its sales by a whopping 37% last week, beating its forecast by 15%. I’m told that customer reaction to this year’s promotional offer was “unprecedented”, with high price point items selling out within hours. Drilling down into the details, John Lewis’ toy department sales were indeed down during the two weeks preceding Black Friday, but it took just three days last week to make up that loss, illustrating just how significant that week has become for many retailers.
I’m looking forward to seeing NPD’s take on the event, and welcome feedback from retailers of any size and proclivity as to the potency of Black Friday – another example of a disruptive retail initiative which presents both challenges and opportunities for the whole toy community. Is it a blessing or a curse – or maybe even a bit of both?
Elsewhere this week, I was delighted to join a delegation of toy people for a BTHA reception at the Houses of Parliament, which aimed to enlist the support of MPs in the ongoing battle against online counterfeiting and attendant safety issues. It is a subject on which my views are pretty well-documented, and one which I am sure I will return to at the appropriate time – but now is not the time. Over 60 MPs and many of their staff joined the reception, so there does seem to be genuine parliamentary interest in engaging with the toy community on this contentious subject. Well done to the BTHA – and Kerri Atherton in particular – for setting up the event. It’s Kerri’s last day at the BTHA today, and I know she will be very much missed as she heads on to a new challenge at the London Mayor’s office – we join with the BTHA in wishing her all the best.
While we were there to talk about the online safety threat, the majority of people I spoke to on the day had another subject on their mind – Brexit. I think we’d all have appreciated the opportunity to get some clarity from the parliamentarians present – although I suspect that many of them would have had as much idea about what is going on as we do (i.e. not a clue). The next ten days or so are clearly going to be pivotal, so I’m sure it’s another subject I’ll be returning to sooner rather than later. And I did rather like Barry Hughes’ comment on twitter that we should have been served Eton Mess as part of the lunch buffet…
The eagerly-anticipated Jazwares range of Fortnite action figures officially goes on sale this weekend, although there have been rumours that stock has been appearing on shelves up to a week ahead of the embargoed release date – with Asda the main culprit. Reports have suggested that the tills wouldn’t accept a sale before 1st December, and managers were refusing to override this when challenged by customers, but it does beg the question as to why they put them out in the first place – maybe Asda got them mixed up with the cornflakes or something?
Finally, I’m hearing rumours that Disney’s Frozen sequel may have a few surprises in store; chiefly, that the core themes of the first movie – ice, snow and general coldness…. there’s a clue in the title – are being side-lined this time around. The style guide is said to be something of a departure too – and, according to licensees, not necessarily in an altogether good way. I also gather that the licence is being pitched as a 50:50 boy / girl split, which may raise a few eyebrows. The inevitable secrecy (some might say paranoia) surrounding the project makes it difficult to know just how accurate these rumours are – but as one licensee has taken to referring to the new movie as ‘Defrosted’, it does seem likely that it is not a complete exaggeration. It will be fascinating to see how retail buyers and movie-goers react to the new twists…