BLACK FRIDAY: High Street Retailers Facing Tougher Competition From Brands Selling Direct

Black Friday could not have come soon enough for some CE and appliance retailers as they look to reignite tepid demand from value and discount minded shoppers.

Several appliance retailers who are surviving on replacement appliance business, are looking to Black Friday revenue to bolster sales ahead of what could be a “poor” holiday sales period” said a Deloitte analyst.

getting a good deal appears to be the order of the day with big brands such as Samsung, Sony, LG Electronics moving to strip share away from mass retailers with major deals offered if consumers buy direct from their own e commerce portals.

Last week LG Electronics who have grown their direct sell sales this year, was out spruiking Black Friday deals on their web site for TV’s and appliances.

A 65-inch LG OLED evo C4 4K Smart TV which was selling for $4,299 is now being offered at 50% discount, while a Samsung Frame TV was reduced from $4,999 to $3,460.

“These are deals that won’t go through a high street retailer, and if you couple the direct sell by major brands with what Amazon are selling and you have a clear picture of how much business retailers are losing in store traffic” said a Harvey Norman franchisee.

Brands such as Lenovo who are offering 58% off PC’s and HP who are offering 50% off notebooks  are  offering direct sell Black Friday deals in an effort to avoid having to give retailers a 40+ margin.

LG Electronics splash banners spruiking Black Friday Deals

Samsung, splash banners spruiking Black Friday Deals

Retailers claim that are consumers are continuing to pull back on discretionary purchases of consumer electronics such as smartphones and appliance, instead they are sticking with older model devices.

Another issue facing retailers and brands selling direct is that Google has been accused of “de-indexing” publishers web pages in the lead-up to Black Friday, amid concerns the search visibility of some e-commerce publishers who have revenue generating deals with big retailers will be greatly diminished.

“It hasn’t happened in Australia yet but is tipped to hit before Black Friday one source told The Australian.

“It’s a big power move by Google.” said one impacted organisation.

By de-indexing news sites, the media outlets lose the passive income as fewer readers are engaging in e-commerce on their sites.

An Australian spokesman for Google said they were unaware of the allegations levelled against the company according to News Corp who sells sponsorship deals to e commerce sites and brands such as LG Electronics.

Black Friday, which falls on November 29 this year, has become the busiest shopping day in Australia in recent years, making it more lucrative for some retailers than the week before Christmas.

US media has already reported titles such as Forbes, Wall Street Journal, CNN, Fortune, and Time affiliate businesses had seen their search visibility fall dramatically, thus compromising their capacity to capitalise on their e-commerce deals with retailers and brands selling direct who have sponsorship deals with media Companies as opposed from buying direct from Google.

Some observers claim that the coming Black Friday weekend is facing the real possibility of being less important after severing retailers started spruiking Black Friday in the second week of November.

In the US this has already had an effect on some big retailers with Target stock being taken down 21% because of the effect of early Black Friday deals.

“Consumers tell us their budgets remain stretched and they’re shopping carefully as they work to overcome the cumulative impact of multiple years of price inflation,” Target Chief Executive Brian Cornell told analysts last week.

Several retailers including Big W, Walmart and Target have extended their one-day seasonal Black Friday discount offers into a sales event lasting weeks in a bid to tempt consumers to keep spending, as data suggests that their spree which has driven economic growth is beginning to falter.

This is not unique to Australia, in the USA where Black Friday originated and inflation is lower than in Australia the practise is starting to have an impact on Black Friday sales.

“We’re seeing this drag-out of incentives to try to widen the window within which retailers can draw in more consumers,” said Gregory Daco, chief economist at adviser EY Parthenon.

“The likely reality in this holiday season is that we see fairly subdued sales because volumes are growing, but at a moderate pace — and [retailers have] much less pricing power.”

Retailers were “incentivising via discounts and different forms of promotions” for those at the lower end of the income spectrum while also “trying to grab higher-income individuals to make purchases during this wider window”, he said.