As Black Friday is less than two days away, everyone who’s got skin in the game is getting febrile: retailers are barely able to restrain themselves from putting out offers before Friday, whilst the consumers have probably been scouring the Web, formulating their plan of attack.
However, they are not the only players in the game. Considering just how big last year’s Black Friday was, the payments industry is also preparing itself for the incredible surge in payments, working their analysts overtime to quantify just how much money will be spent – and more importantly, how.
What is Black Friday?
Black Friday is a bit like Halloween in the sense that it is largely an American phenomenon that has been brought over here for commercial purposes – but also similar because anyone who gets involved in it automatically becomes a terrifying monster.
It runs on American schedule because it takes place the day after Thanksgiving, which is always the fourth Thursday of November. This year Black Friday is on 27th November.
Online spending increasing
How much and how people will pay is where things get interesting. Despite the fact that the majority of the money will be spent in face-to-face transactions, it is online that looks to be the winner. The discount event will boost footfall on the UK high street with in-store transactions predicted to surpass £1.1billion, up 4 per cent on 2014, according to figures from Visa Europe.
It expects £1.9 billion to be spent via its cards alone, with £721m forecast to be spent online. However, despite being a lower amount, that figure marks a 17 per cent increase from last year and a staggering 61 per cent on 2013, suggesting that e-commerce transactions will come to dominate Black Friday in years to come.
That’s why Visa says this year’s event will be driven primarily by the growth in e-commerce, as consumers become more comfortable with using mobiles and tablets to shop on the go. This has already been shown by recent figures from the UK Cards Association, which found the number of card transactions made on the internet increased by 20 per cent in the past year.
Doing all my Black Friday shopping online ?
— scherry . (@thinkpink__) November 25, 2015
— Jennifer (@redfuzzycow) November 25, 2015
“This is shaping up to be a huge weekend, online and in-store, for retailers. We’re looking at a combined £1.9 billion being spent on Black Friday as retailers discount across both mediums,” said Kevin Jenkins, managing director UK & Ireland at Visa Europe.
The Experian-IMRG research comes up with a rather more extreme figure than Visa: it says that British consumers will spend £1.07 billion in one day online.
“The 2015 Christmas period is on track to be another record year for online retail in the UK. We expect that Black Friday will continue to break new ground for online shopping, passing the billion pound mark for the first time,” said James Miller, senior retail consultant at Experian Marketing Services.
By comparison, the Centre for Retail Research has more modest figures, with online spending on Black Friday expected to reach £966m, and £1.39 billion in total.
The average shopper is expected to spend £176 on Black Friday, according to data from Nationwide.
What’s the point of Cyber Monday then?
Cyber Monday has come to describe the Monday after Black Friday, when online sales traditionally peak. However, last year consumers spent £720m online during Cyber Monday, a whole £90m less than on Black Friday.
Don't really understand these stores that say "Black Friday deals all day online"..isn't that Cyber Monday?
— Annie Galiani (@heyannieitsrita) November 25, 2015
This year, Visa says that compared to the £721m predicted to be spent with its cards online during Black Friday, only £629m will be spent on Cyber Monday – showing that the gap is widening, unsurprisingly when one considers that many retailers will make most of their offers available online, thus defeating the whole point of Cyber Monday.
“Black Friday’s growth is really coming online in particular – that’s where this year’s surge is going to come from. It’s also firmly become the bigger brother to the more traditional Cyber Monday,” added Visa Europe’s Kevin Jenkins.
The Emerging Payments Association (EPA) held a conference on Wednesday, 11 January to discuss its most recent report, and discuss the impact ... read more
Jonathan Quin, co-founder and CEO of World First, explores how established financial institutions and newer fintech disruptors stand to benefit from collaborating with one another in the fast-moving financial services sector.
With advancements in technology and the subsequent availability of data, it seems surprising that banks seem to know less about their customers than ever before.
In an era where cheques are largely a thing of the past for organisations that operate within these shores, many people will be surprised to learn that many overseas B2B payments are still made by cheque.