Black Friday has become the biggest shopping day of the year for Britons, as retailers provide maximum discounts to kick-start the gift-buying season. This year on Black Friday, UK could witness sales exceeding £1bn.
The Nottingham-based Centre for Retail Research estimates sales for this year's Black Friday, which falls on 27 November, to touch £1.39bn (€1.97bn, $2.11bn). On the other hand, research firm Experian and e-retail industry association IMRG expect online sales to climb to £1.07bn.
This would be the first time that online sales in the UK would surpass the £1bn-mark in a single day. Although this is good news for online retailers, it comes with its pitfalls as many shoppers could send back unwanted items, which they would have hastily purchased due to lower prices. These returns alone could cost online sellers about £180m.
Of this, UK retailers stand to lose £130m just in handling returns of items sold on Black Friday, according to Clear Returns, a retail intelligence agency. The remaining £50m would be incurred due to costs related to lost margins, cleaning and storing, oversupply of stock and the lost value of a future customer.
Vicky Brock, founder and chief executive of Clear Returns said that retailers should consider every sale as a sale only when the customer decides to keep the item sold. "The promise of a Black Friday discount alone might not be enough to close the expectation gap and secure a 'keep'."
According to industry figures, between 25% and 40% of all goods purchased online in the UK are returned. On a category classification, while one in six consumer electronics items are returned about 30% of women's fashion products are sent back. Returns cost retailers in the country about £60bn each year of which one-third is from online shoppers.
Retailers will be prevented from selling the returned items during the crucial sales season as about £600m worth of goods purchased between Black Friday and early December will be tied up in the returns system by mid-December.
Clear Returns further stated that this year, maximum number of retailers will suffer from having their highest inventory of returns stock, tied up from the returns process on 12 December, a day it has decided to name as "Out of Stock Saturday".
This shows the gloomier picture of Black Friday, which is otherwise deemed as a successful trading day.