The value of sales from UK online goods and services dipped by 0.8% between October and September 2015, according to the Office for National Statistics (ONS).
A rare decline for e-commerce purchasing arrives in the lead up to Black Friday on November 27, where spend in Britain alone has been tipped to reach £1 billion.
To put the drop into perspective, the ONS’s review of online sales over September 2015 yielded a 4.5% rise compared with the month before, and a 15.2% increase year on year.
While online sales last month hit a value of 11.2% greater than the one achieved a year before, the drop shows signs that this year’s Black Friday will help set the record straight come the end of November.
Calm before the storm
Retail sales in general increased 3.8% over October compared to the year before as retailers began their pushes for Christmas sales. ONS states that £28.8 billion was spent in the UK both online and offline during last month, above the £28.7 billion in October 2014.
A 0.6% decrease between September and October of this year has been attributed at least in part to the early murmurs of Black Friday deals as Brits look to get the best value for money.
“Retailers have taken a minor hit in sales this month, but this is not surprising given the timing of Black Friday, and shoppers saving their money in anticipation of this sales period,” comments Dan Wagner, founder and CEO of Powa Technologies – a provider of e-commerce solutions for retailers.
Black Friday does however come with a caveat for retailers who wish to capitalise on the increased level of spend. Last year’s Black Friday caused warnings from Andy Street, CEO of John Lewis, who described the condensing of five weeks of trade into one day as “challenging” due to issues with fulfilment.
Here is Andy’s interview with the BBC about Black Friday being a ‘blessing in disguise’ for his own store.
A hidden picture?
In further warnings for retailers, a report from Clear Returns highlights the emergence of a ‘returns loop’ caused by people sending £160 million worth of Black Friday stock back from where they bought it.
The study brands Black Friday as a “gloomier picture” than foreseen due to a range of goods being returned, and resources being stretched.
Vicky Brock, CEO and founder of Clear Returns, states: “Our data suggests the true cost of acquiring customers during such promotions is likely to be very high; at peak trading periods anything between 15-50% of promotional items might be returned at a time when staff will be stretched to fulfil other more profitable orders in the run up to Christmas.”
Wagner, of Powa Technologies, also touched on the disguised nature of Black Friday in the aftermath of the ONS figures.
“The heavy discounts retailers make on Black Friday, may attract shoppers in large numbers, but will still come as a double-edged sword and may not benefit them in the long run.”