The ‘Amazon Effect’ Could Disrupt Traditional Festive Retail for Good, Says Ve Global

Ve Global’s CEO Morten Tonessen has warned that traditional festive UK shopping dates, including Delivery Cut-Off Day (December 21) and January Sales, “may lose their place in the modern retail calendar”, as a result of Amazon’s growing market influence.

The assertion follows the release of the ad tech company’s report on the Golden Quarter (November 1 – January 7) revealing major declines in spend across key dates in the festive trading period. This has been attributed to record Black Friday spending in the UK and “spillover” from Amazon’s Black Friday Week beginning the week before (November 16).

Spend on Black Friday last year rose by 352% compared to the average day according to Ve’s data, while spend was up by 66% of the average Golden Quarter day within the week before.

Shocking the market

“Amazon’s Black Friday shocked the market into life earlier than expected and put spending at odds with the traditional festive calendar,” said Tonessen; “With many retailers struggling to compete, there was an earlier start to the discounting which resulted in shopper fatigue that impacted long-established sales events.”

January Sales took the worst hit, seeing a decline in online sales (-29%) and traffic (-19%) compared to the period average; Delivery Cut-Off Day, which usually causes a last-minute flurry, saw sales plummet 31%.

Boxing day sales bucked the trend in overall decline, with UK retailers seeing 18% more sales compared to the Golden Quarter average.

Ve’s recently appointed non-executive board member, Baroness Michelle Mone OBE, cautioned retailers of the risks of opting for a “short-term” competitive edge by starting festive sales strategies early; “The key lesson from last year’s Golden Quarter is to plan your digital strategy carefully, identify and take advantage of prime days and times in the continuously evolving retail calendar.”

Amazon was estimated to have hauled in between 45-50% of all online sales across Black Friday according to GBH Insights which commented on the e-commerce giant’s “eye-popping” performance. Throughout the course of 2017, the company’s stock rose well beyond 50%, putting founder Jeff Bezos’ net worth over $100 billion, albeit briefly.