Black Friday bargain hunters beware

The industry association for web retailers, IMRG, has predicted that online sales on November 27 will hit the £1bn mark this year in a first for British retail. This represents a 32 per cent rise compared to last year and will far outstrip sales on traditional shopping dates like Boxing Day and New Years Day. The industry has also been fuelling the fire by promising days or even weeks of deals to lure in Christmas shoppers.

This week Asda said it would ignore Black Friday. Owned by US giant Walmart, it was Asda which with Amazon was responsible for bringing the phenomenon, along with Cyber Monday three days later, across the Atlantic only two years ago. But last year it was embarrassed by scenes of shoppers fighting over TVs, and now says customers “don't want to be held hostage to a day or two of sales."

Retail analyst Nick Bubb has said Amazon remains fully committed to the promotion, as well as stores such as Currys and PC World, while Asda “wanted to avoid any risk of reputational damage”.

Justin Opie, managing director of IMRG, said he expected to see a “Black Friday period” for some retailers, but added that many deals could be tempered to prevent the sector taking a hit. “Last year, anticipation of Black Friday led to a slow start to the Christmas shopping season and panic-discounting by some, which impacted on profit margins. So the availability and rate of discounts will need to be rationalised this year for it to be sustainable.”

That has led to fears that sneaky discount tactics could be widely deployed to prevent Black Friday hurting the sector’s profitability. The Advertising Standards Authority has taken action by issuing a cautionary message about misleading promotions in the run up to this year’s event.

ASA has told stores to avoid “being inaccurate or exaggerating the savings that can be made”, saying the recommended retail price (or RRP) used to illustrate reductions must be genuine.

It provided the example of a complaint upheld against Mothercare last year after it failed to prove a car seat - which it claimed was discounted from £49.99 to £24.99 - had ever been sold at the original RRP.

It said: “When stating a ‘was’ price, advertisers must be able to demonstrate that this represents the genuine ‘normal’ selling price. This should usually be the price at which the product was available for at least 28 days before the reduction (unless the ad makes clear that this is not the case), and it should not generally be available at a reduced price for longer than the ‘was’ price.”

It has also told retailers to make a ‘reasonable estimate of demand’ for certain discounted products so as not to mislead consumers over the likelihood of getting them. ASA added: “Phrases like ‘subject to availability”’ aren’t likely to be sufficiently detailed. If stocks are limited this should be made clear in the ad.”

This could leave the likes of Amazon, which kicked off its Black Friday promotions last week, open to more scrutiny this year, as it plans to give customers who sign up for Prime membership (at £79 per year) early access to quickfire deals before the general public. Some 30,000 deals are being offered early to Prime subscribers in the US, but when asked how many would be offered on a similar basis in the UK this year, an Amazon spokesman would only say it was a ‘selected’ number of deals.

Customers have previously complained on social media and Amazon’s forum about the company’s so-called hottest ‘lightning deals’ selling out too fast.

There have also been questions about Amazon’s pricing policy in the days leading up to Black Friday, with one shopper suggesting the firm had hiked the price of two popular DVDs less than 24 hours before they were reduced last year.

Writing on Amazon’s own forum, Andre Peter Willey said the Big Bang Theory complete box set went up in price by 44 per cent overnight to £89.91, before it was reduced to £34.99, while the cost of a Lion King DVD rose 32 per cent to £30.99 before falling to £17.49. Mr Willey said the deals were still worth buying but described the advertised discounts of 61 per cent and 44 per cent as “blatantly misleading”.

The US firm has been further criticised for charging up to 15 per cent more on products like the popular video game Call of Duty Black Ops III and Beyonce’s ‘Pulse’ perfume compared to its competitors in recent months. Price checking firm Flubit said the “great Amazon price myth” was leaving consumers consistently out of pocket across a range of items, including games, books and toys.

Bertie Stephens, chief executive officer of Flubit, said independent retailers did not charge the same commission to host products, enabling them to pass on savings to consumers. “Take the cost to sell on Amazon out of the equation and merchants are able to price much more competitively, which delivers instant savings to online shoppers. To an extent, you could say that the size of Amazon and strength of its brand have become its Achilles heel.”

Flubit’s research found that the biggest savings could be made in games, where top selling products typically went for 11.1 per cent more on Amazon than elsewhere. Beauty products came a close second with a 10.5 per cent price gap, while books and toys sold for 10.1 per cent and 9.6 per cent more respectively.

Amazon declined to comment on either Flubit's research or Mr Willey's claims.