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In the run-up to Black Friday 2021, shoppers were ready to spend, but fashion and beauty retailers struggled to get stock on shelves amid global supply chain disruptions. This year, the opposite is true.
Shipping delays and over-ordering have left many retailers with a glut of inventory. Meanwhile, in the face of rising inflation, the threat of recession, and Europe’s energy crisis, there is uncertainty over whether and how much consumers will spend. As a result, as retailers seek to clear stock, this year’s Black Friday markdowns have been early and aggressive, despite the sustainability implications.
In the UK, the number of Black Friday sales running in the first two weeks of November was up 78 per cent on 2021, according to e-commerce trade organisation IMRG and digital consultancy Capgemini. American retailers are also discounting earlier this season, the National Retail Federation (NRF) notes. Several retailers are running promotions of 50 per cent off or more. Even at the luxury end of the market, which has so far proved relatively resilient to the economic downturn, retailers including Harvey Nichols, Net-a-Porter, Bloomingdale’s, Neiman Marcus, Farfetch, Liberty and Italy’s Rinascente are running Black Friday promotions of between 25 and 50 per cent off, albeit some only on selected lines.
However, with consumer sentiment low across the UK, US and many European countries, this may not be enough to shift stock — and there are questions over how many items will be returned as the cost-of-living crisis continues to bite. For fashion, this means excess inventory may clog up warehouses into Christmas and beyond, with serious cash flow repercussions.
“Supply chain issues have created problems, especially with items arriving late and potentially out of season. Suddenly you’re in a situation where you over-ordered and it arrives at the wrong time,” says NRF’s VP of research development and industry analysis Mark Matthews. “We expect to see a lot of discounts going into the holiday season with retailers trying to move some of that older inventory to make shelf space for the new things that are coming in.”