Spending growth across the European Union is on track to outstrip the US this Black Friday, according to analysis by Ingenico, the global leader in seamless payment.
Based on its payments data from 2016, spending uplift in the bloc is expected to be in excess of 450% above an average Friday, nearly three times the 162% spend increase in the US, and higher than the UK’s 318%. Transaction spending values are also anticipated to be significantly greater across the EU over the November sales bonanza.
“In light of these forecasts, retailers of all shapes and sizes should consider ‘opening the borders’ to Europe to take advantage of continental Black Friday fever to supplement sales performance at home,” said Gabriel de Montessus, VP Retail Global Product and Marketing for Ingenico Group. “As Black Friday enthusiasm slows in the US and the UK, retailers in these markets should be looking to mainland Europe for new opportunities to significantly increase purchase volumes and values over the festive sales period. Retailers with a cross-border presence are likely to be the big winners this year.”
Online shopping is expected to be a key channel for sales this year throughout the EU. Last year, Ingenico processed 29% more online payments during the Black Friday weekend compared to the same period in the previous year, and the business has already made preparations to handle an even greater number of online payments in 2017.
“This growth in online shopping across the continent provides a great opportunity for smaller UK retailers looking to take advantage of booming Black Friday participation in Europe,” added de Montessus. “Provided they have the infrastructure in place – not just a great website, but a frictionless payments system tailored to local payment preferences and languages – they can tap into this peak in demand to expand their customer base far beyond their home market, laying strong foundations to grow their business in the future.”
Ingenico’s findings also warn retailers about the importance of getting their payment acceptance strategy right this Black Friday. Retailers are typically more aggressive when it comes to accepting payments during the sales period, declining 3% fewer transactions than an average day. This can lead to a significant bump in sales – with IMRG estimating £1.23bn in Black Friday sales last year, this equates to a significant £37m extra accepted.
However, such an aggressive approach can have repercussions further down the line, as retailers have to process time-consuming returns requests. According to figures from Ingenico, 54% of the total number of returns from Black Friday were made by mid-December and 70% by Christmas Eve. Handling these during the busy trading days of December can interfere with the processing of new transactions. Meanwhile, returning goods ties up stock in the mail system, resulting in unwelcome stock shortages that can lead to consumers abandoning a sale.
“Black Friday isn’t the only important trading period at this point of the year. Retailers in the UK and elsewhere in Europe need to remember that they have December to look forward to,” said Gabriel de Montessus. “A single-minded and aggressive pursuit of strong sales in November, without thinking about post-purchase issues, can have a negative impact on December performance, potentially undermining a retailer’s Black Friday achievements. Retailers need to take steps now to create the capacity to handle returns alongside new transactions now so they are not caught out next month.”
In the run-up to Black Friday 2017, Ingenico is providing guidance and support to retailers in preparation for sales over the Black Friday weekend:
See our infographic here for an insight into spending uplift across the 28 EU member states.