A recent study by Tink has brought to light the diminishing allure of Black Friday among UK consumers and merchants.
The research, involving over 2,000 consumers and 500 online merchants, indicates a stark 40% of consumers are hesitant to engage in Black Friday sales due to increased living costs. Furthermore, two-thirds are reducing their non-essential spending.
This trend poses a significant challenge for merchants as the festive season approaches, with 56% of consumers planning to tighten their belts, and almost half of the merchants are bracing for a subdued peak season. The fear of bankruptcy looms for 27% of the merchants surveyed.
Interestingly, the once irresistible Black Friday deals are now scrutinized by consumers, with 34% finding them less enticing due to regular discounts available year-round. Merchants echo this sentiment, admitting the Black Friday discounts do not stand out compared to other promotions.
Despite the strain on profit margins, with 46% of merchants feeling the pinch, there’s a consensus that Black Friday participation is a ‘necessary evil’. The study further reveals a return rate of 31% for items purchased during the event, spotlighting the importance of an efficient returns process. With customers returning more items than before, a swift refund process is critical, yet 33% of merchants struggle with repayment settlement.
Amid these challenges, merchants are not backing down; 28% plan to invest in their returns procedures, recognising the competitive edge it can provide. Innovative payment solutions like Pay by Bank are touted as a strategic move to enhance customer experience and financial efficiency.
Tink’s SVP Payments & Platforms, Tom Pope, emphasized the crucial role of a smooth returns process amid rising costs, advocating for Pay by Bank as a strategic solution that could transform a major seasonal challenge into a competitive advantage.
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