E-commerce

“Retailers are desperate”: Why this e-commerce brand is ditching Black Friday

Retail businesses across the country are gearing up for a pre-Christmas sales rush with Click Frenzy, Black Friday and Cyber Monday just around the corner.

But Natasha Ritz, co-founder of online bag retailer ARNA, won’t be taking part. Instead, the business owner has told customers not to expect any discounts, launching an anti-sale marketing push in a bid to educate customers about the downsides of excessive promotions.

Ritz, who has been working within retail for 15 years, says the prevalence of shopping holidays in Australia risks further reducing consumers’ willingness to pay full price.

“Instead of trying to connect with customers and create a valuable relationship, retailers are desperate to make sales because retail is so flat,” Ritz tells SmartCompany.

“It’s important we call out and recognise behaviour in the retail industry that totally cannibalises long term growth … we’re not going to make any money, and we will see so many more retailers close down.”

Ritz has developed banners for her e-commerce website that flip the usual discount marketing on its head. They read: “We’ve got sales fatigue!”

“It’s really important for us to be open and honest with our customers,” Ritz says.

Taking place over the last weekend of November, Black Friday and Cyber Monday originated in the United States, but have become increasingly popular shopping holidays with Australian customers alongside the rise of local discounting event Click Frenzy.

Figures collated by Australia Post, the largest e-commerce fulfilment provider in Australia, show while the first week of December is typically the biggest week of the year for online sales, the last week of November took top spot in 2018, recording 28.7% growth year-on-year.

Such was the effect of discounting holidays on Australian retailers last year that Australia Post’s head of e-commerce Ben Franzi declared 2018 the “year of the discount”.

The increasing prevalence of promotions to the Aussie retail calendar has been a contentious topic among business owners in the sector in recent years, many entrepreneurs, particularly those in high-volume categories such as electronics, view the sales positively and participate eagerly in a bid to drive sales in the lead up to Christmas.

The flipside, particularly for smaller firms with cashflow considerations and lower overall volumes, is higher margins — and in a market where consumer wallets are being held tightly, that can be bad news for independents.

Ritz is unlikely to be the only independent retailer giving November promotions a miss, other business owners have expressed their own discontent with the shopping holidays in the past.

Sydney-based label Citizen Wolf adopted its own spin on the promotion last year, offering its first 250 customers an opportunity to participate in “Black Fry-dye” instead, where re-dying service for old jeans was given out for free.

Citizen Wolf co-founder Zoltan Csaki told SmartCompany last year he wanted to charge the narrative on Black Friday and send customers a message about the effects of rampant consumerism on the environment.

This article was first published by Smart Company and has been shared with permission.