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Black Friday has become a fixture in Switzerland. It’s been eight years since Manor first brought the American cult of shopping to Switzerland. When the Swiss department store group offered customer card holders a 30 percent discount on all product lines on November 27, 2015, it initially came as a shock. And it is also a starting signal for numerous other retailers to firmly include this shopping event in their agenda.
30 percent in 2023 won’t be enough to shake Swiss consumers out of their lethargy during Black Friday Week, which begins now and peaks on Black Friday, November 24.
Corona shopping boom has an impact
“Swiss households are increasingly cost-conscious; “The willingness to spend is low,” says Nordal Cavadini, retail expert at management consultancy Alixpartners in Zurich. Many shoppers had already purchased classic Black Friday items like home electronics, entertainment and household items during the pandemic: “In 2023, people don’t want to spend a lot of money unless the discounts are really attractive.”
Thanks to almost a decade of experience with the Black Friday phenomenon, local consumers have become smarter. They realize that not every deep discount automatically means you’ll get the best price in the industry for the product you want. However, Julian Zrotz, founder and managing director of pricing platform Blackfridaydeals.ch, says it’s often double-digit discounts at the start of the customer journey that trigger them: “90 percent of consumers will probably be attracted by high percentage values.” For fashion lines with traditionally high profit margins, a 30 percent discount used to be enough, but today it needs to be higher: “40 percent is the new 30 percent. Or even: 50 percent is the new 40 percent.”
No extraordinary Black Friday expected
Zrotz doesn’t expect a spectacular Black Friday harvest in 2023. The benchmark is usually non-food sales of 500 million francs, roughly three times that of a normal business day. “According to our forecasts, around 490 million francs will be sold on Black Friday 2023 in classic non-food areas such as fashion, home electronics, home and home furnishings,” says the Black Friday campaign correspondent. Zrotz. “The small increase in sales compared to last year is due to inflation; Inflation-adjusted sales are approximately the same as 2022.”
Cavadini is also leaning in this direction: “I predict that the 2023 edition will still yield less when adjusted for inflation, if not in nominal terms.”
Black Friday is a tough time for retailers every year. Not only in terms of the use of staff capacities, the stability of e-commerce systems and logistics, but above all in terms of pricing policies. Because dropping prices just before the Christmas season, which usually thrives on stable margins, is actually nonsense from a business perspective.
Black Friday is a welcome opportunity for brand owners and retailers to draw attention to themselves. Fine art is about being attractive in terms of price but not compromising too much on profit when it comes to the Christmas business. Luca Pastorino, Swiss sales manager at software service provider Salesforce, explains the approach this way: “Get good sales and win new customers without unnecessarily straining profit margins or emptying warehouses.”
Competition intensity determines discount levels
Ahead of Black Friday, Salesforce Switzerland conducted a population-representative survey of more than 500 people on the mood of Swiss consumers and identified the trend for “background shopping.”
But that’s why discounts are unlikely to suddenly skyrocket, says Pastorino: “But that doesn’t mean retailers will buy their way to success at unusually high discounts. After all, many retailers are under strong pressure on profit margins.”
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This article was first published on the paid service of handelszeitung.ch. Blick+ users have exclusive access as part of their subscription. You can find more exciting articles at www.handelszeitung.ch.
Pastorino draws a different price picture: “We will see very targeted discounts. “Discounts of 10 to 20 percent are very attractive for brands and retailers that keep their price policies constant throughout the year,” he said.
When it comes to Black Friday discounts, the competition varies depending on the situation. According to Julian Zrotz, this is a new trend he saw on Singles’ Day on November 11, the day of sales on imports from China: “In an important area like electronics, retailers have been less aggressive with prices. This may have something to do with the loss of retailers like Steg or Microspot. If the number of competitors decreases, the remaining dealers will have to offer less low prices.”
However, in areas with many competitors, such as fashion, home appliances, telecommunications and sporting goods, the following applies to Black Friday, Swiss Edition 2023: If you cannot directly trigger customers with a deep discount. Start, you won’t be among the winners.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
