Battle Lines Drawn Between Amazon & Retailers Over Black Friday
A head-on battle between local retailers and Amazon is set to play out again next week as Black Friday looms.
Some observers claim that the emergence of Black Friday, which offers many products at heavily discounted prices, is stripping profits out of local retailers such as Harvey Norman, JB Hi Fi and Bing Lee, as well as organisations like Kogan and Catch of the Day.
ChannelNews has been told that several retailers have moved to buy cheap, bottom-end products in an effort to compete with Amazon.
In some cases, the retailers have been mirroring the US “outlet mall” strategy, where branded products of lesser quality than originally manufactured are passed off as genuine and sold to consumers.
In the US, brands such as Samsung, Apple and TCL have already moved to announce discounted deals that will be available on Black Friday, while many others are refusing to identify their deals ahead of Black Friday for fear of the current sale of its products stalling.
In general, customers are driven by deals, and during this period, retailers will often go above and beyond in an attempt to cater to these key sales periods – with many tailoring its brick-and-mortar and online offerings to better prepare for what has become one of the biggest days in the retail calendar.
Competition during these periods have become so intense in recent times that several retailers, according to The Wall Street Journal, have been working backwards with its suppliers to set starting prices that, after all the markdowns, will yield the profit margins they want.
The Wall Street Journal found that several retailers will slightly increase the “normal price” of an item in the days before their Black Friday sales so that the discounts offered will seem more enticing for consumers looking for a good deal.
The report claimed that there was an 8% increase in a fifth of the sale items it tracked before Black Friday, and a 23% uptick in the pre-sale prices of toys and tools.
Black Friday this year will fall on November 29, although many will try to take as much advantage of the period by offering deals during the lead up, so keep your eyes peeled for any announcement from your favourite retailers and brands for more.