Updated on: 25/09/2023
Impacts of Global economic events on Black Friday 2022
As the Black Friday 2022 period ended, I thought it would be interesting to see how order volumes have changed over the past three years, specifically in months leading up to and including November.
My reason for focusing on the last 3 years specifically probably isn’t a surprise but in case you’ve been living underground, it’s because a lot has happened over this timeframe. In 2018 we thought Brexit would have the biggest economic impact on the UK economy in the short-to-mid-term. Little did we know a viral outbreak in China would cause a pandemic in 2020, with it creating global supply chain issues (amongst other things) which we then spent 2021 trying to start recovering from. Then Russia’s invasion of Ukraine early in 2022 caused even further instability. All of which left us with a powerful cocktail of destabilising issues, resulting in slowed economic growth worldwide and many nations, including the UK, entering a recession.
Sure, the past years have been a gift for media outlets, who have had plenty to talk about, but for most it’s been particularly challenging. For industries that rely on people to have money in their pockets to spend on nice to haves, such as Wholesale & Retail, it’s been a period of having to adapt quickly to ensure survival.
In 2020 we were seeing those that were able to operate online able to generate huge growth. With people essentially a captive audience stuck in their homes, buying things online became one of our favourite pastimes. Whether that was to buy essentials or supplies for our newfound passion for home improvement; it has since been reported that COVID-19 accelerated the shift to e-commerce by 5 years.
In 2021, articles were suggesting the balance of retail sales had been restored back to pre-pandemic levels with in-store sales rising and e-Commerce growth slowing. I guess with our newfound freedom, it’s only reasonable to conclude the draw of the out-of-town shopping villages became too strong for most.
How do online order volumes for Black Friday 2022 compare to previous years?
A sample cohort of 2020 Mintsoft customers showed that orders received from online channels between 2020 and 2021 increased by 31%. This is compared to a 45% increase in 2021; and an all time low growth rate of 6.7% in 2019. Thus, confirming the reports of slowed growth in 2021, but not to the levels of pre-pandemic levels as suggested.
When we looked at the % increase in orders between an average of prior months and November; there is no significant difference with 2020 seeing an increase of 52% and 49% in 2021.
Anyway; 2020 and 2021 are now both distant memories, so what about this year and the future? 2022 has been the year of economic shrinkage with commercial property being sold off, including even Amazon who have admitted they may have bought too much warehousing space. Is this the end of eCommerce growth? Well, not exactly. When we look at the same 2020 cohort of customers, we see that from 2021 to 2022 order volumes increase by 17%; not at the same 31% or 45% growth of the prior two years but still higher than the 6.7% growth reported in 2019.
In the lead up to the Black Friday period there were opposing theories being discussed; would shoppers tighten their purse strings and not buy in the same volumes during this period; or would they in fact buy more during this period, taking advantage of deals to be had and stocking up for the future. Well; now we’ve concluded that period we can see the results. A 43% increase in order volumes in November compared to the months that preceded it. So no people didn’t stop buying but that is still a statistically significant decrease on the 52% increase in 2020 and 49% increase in 2021. Maybe people were trying extra hard not to get sucked into the great deals on offer, albeit not entirely successfully.
Analysing the impact of the cost of living crisis on Black Friday 2022
All very interesting stuff, but what’s the conclusion of all this analysis? Well, it’s safe to say the retail sector is tightly linked to global events. But it also seems that it is more robust than other sectors; able to continue to see strong growth despite external factors trying to prevent it.
I suspect for this robustness to continue those in the sector will need to continue to maximise their productivity and ability to adapt quickly. This is one of the reasons why we see so many fulfilment warehouses investing in combined Order Management and Warehouse Management Software like Mintsoft to automate as much of their fulfilment process as possible. Freeing them to spot opportunities to adapt to maintain their growth and keep them ahead of their competition.
Should you review your order fulfilment processes?
As a busy sales period, such as Black Friday ends, you may be reflecting on how your company performed and wondering how you could improve productivity and efficiency for the upcoming year.
Whether you’re a 3PL or an ecommerce retailer, investing in a 3PL management system or order management software will help you understand what stock you have, where it is and when it needs replenishing, making your business run smoothly throughout the next 12 months, and next busy sales period.
Book a call with one of Mintsoft’s Consultants to see how our solutions could help automate and streamline your stock management, order fulfilment and even monitor shipments.
