Black Friday: Why Sapelle Won’t Be Partaking

Black Friday: Why Sapelle Won’t Be Partaking


_79356587_tesco2Black Friday is an American retail tradition that sees huge markdowns on everything from fashion to white goods. Its a great day for Americans to shop, having just celebrated Thanksgiving. For most people, this is the start of the Christmas shopping season, therefore what better way to get things going than by bagging a few hot bargains?

Thanks to the likes of Walmart and Amazon, the tradition has crossed the pond and caught on here in the UK, with more and more retailers offering massive discounts in the days around Black Friday.

As we planned our marketing calendar this year, it was very tempting to participate in this growing trend and devise some clever offers that would show how competitive Sapelle is. After all, if this is the busiest shopping day of the entire year, why wouldn’t we want to partake in a slice of the revenues to be generated on the day?

But the more I considered it, the more I realised that Black Friday is a game that we could play at our own peril. As is the case with most of the discounting activity we see in the run-up to Christmas (and in actual fact, throughout the rest of the year).

I remember last year planning our Pop Up shop in Covent Garden during November, and being acutely aware that, while we would be offering our shoppers high quality products at full price, other retailers would have started their ‘pre-Christmas’ discounts already. It was going to be a challenge to attract shoppers into our space if everyone else had ‘SALE’ posters in their windows, and then to justify our prices, even though they compared favourably with most of those around us.

Thankfully, our products do speak for themselves and, once you’ve seen the workmanship and talent that’s gone into them, if there was any question of pricing, it fades into the background. And thankfully, there is a growing population of discerning shoppers asking the right questions and seeking to find out the story behind the products they buy. We have them to thank for the rise of the ethical side of the fashion industry.

But there is a perennial challenge for Sapelle and others in the ethical space, especially those that back fairness and transparency across the entire supply chain (customers included). The fact is, if we’re offering a fair supply chain – including fair prices for our customers – then the gap between our retail prices and cost prices should be reasonable. This is what differentiates us from those who might be marking up the price of their products by several multiples. And this is why there’s less for us to play around with when it comes to discounting activity.

I was listening to a Retail specialist being interviewed on BBC Radio 4 this morning, who stated that retailers participating in Black Friday may be employing strategy to sell stock at a 20-30% discount now as opposed to having to sell it at 50% in the post-Christmas sales. It makes sense, I guess. If you have that kind of margin to play around with, i.e. if selling an item at 20, 30, or even 50% can still deliver a healthy margin to your bottom line. Otherwise, discounting behaviour can be potentially damaging when you’re practically paying shoppers to buy your clothes, for the sake of being seen as competitive.

Excuse my moment of nostalgia here, but there was a time when we had Summer sales at the end of the Summer and January sales at the end of the winter. Full stop. And these were mechanisms for retailers to clear their stock and recover cashflow, so as to buy in the next season’s stock. I’ve lost count of the number of mid-season, mid-mid-season, blue cross and all manner of other sales we see now on the high street. This is surely no longer a case of clearing excess stock, but a marketing tool that can only be employed effectively if we start the season with products at inflated prices.

In my previous life in the Financial Services industry dealing with high street retailers and multiples, one issue that was constantly quoted by the vast majority of FDs and CEOs was how the culture of discounting was impacting their margins. And yet they have to play the game in order to remain competitive and retain their customer base. Effectively, retailers have created a rod for their own backs, and no one seems inclined or able to stop this trend.

The damage is not only financial – we now have a population of shoppers who shop by discount. Hold tight to their purses because they know the item they want will soon enough be discounted. I know people who say they’d never buy anything that’s not on sale. But the question is: how fair a deal is buying an item that cost £20 to produce, retails at £120, then gets discounted by 50% to £60 compared to a similar item that retails at full price for £60 to start with?

So today as shoppers frantically bag bargains in the Black Friday sales, and we continue to trade with our fairly-priced products, I regret that our ability to discount is restricted by our already fair prices, but at the same time, I’m immensely proud that we offer our customers a great deal – all year round.

I look forward to a day when there’s enough transparency in the retail sector for the public to really understand what savings they’re really making.

 

 

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