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Industry Insights Retail Affiliate Marketing

The Black Friday litmus test: what it says about the current state of retail

By Robert Davinson, Content Analyst


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December 11, 2018 | 5 min read

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Everyone remembers the litmus test from chemistry class at school, where a piece of litmus paper is dipped briefly into a liquid substance to determine its level of acidity. A simple test devised to draw broad conclusions from a single factor; whether the paper would turn red or blue. The retail world has a similarly simple test for gauging its own state of being, only this one has a decidedly darker hue. Black Friday.

The Black Friday litmus test: what it says about the current state of retail

The Black Friday litmus test: what it says about the current state of retail

It offers a snapshot view on the state of retail globally, thanks to the mass adoption of the event by consumers, brands and publishers around the world.

This year the affiliate network tracked almost £500m in revenue across the wider Cyber weekend thanks to an army of publishers promoting thousands of advertiser partners.

But what did all that activity tell us about the current state of the industry?

Department stores aren’t just losing out offline

The high street has been suffering for some time now and barely a week passes where there isn’t more news of a high-profile chain being forced to close. Whether it’s House of Fraser’s administration in the UK, or Sears filing for bankruptcy in the US, the department store model is one that has undeniably felt the pinch at a time when the whole notion of real-world shopping appears to be in a state of flux.

And that is a pattern that bore out online over Black Friday too. Comparing the major advertiser sectors for which we tracked activity, the department store category was significantly down across a range of metrics including AOV (declined from £133 to just £90) and share of sales (down by over 6%).

Graph 1

By contrast we saw sizable growth for both the ‘electronics’ and ‘health & beauty’ sectors and, although ‘clothing & accessories’ was down in general, it was notable how well fast fashion brands did during the event. While debates currently rage over the ethical consequences of these retailers’ cheap, ‘throwaway’ products, consumer appetite for them showed no sign of abating with the AOV of these brands swelling by 24%.

Consumers are increasingly aware of how to save money

Black Friday is all about saving money. Those pervasive black discount labels are a synecdoche for the event itself. What’s clear though is just how shrewd consumers have become in ensuring they find great deals. An array of websites provide innumerable ways of reducing your spend, and a growing familiarity with these may have played a role in reports that whilst sales increased during the event, actual spending was marginally down.

And looking across Awin’s markets we can see that for almost all of them, the primary type of website generating sales was a discount code or coupon site. Only in Sweden and the US was this affiliate type ousted to the number two slot in favour of cashback sites.

Graph 2

As these sites continue to increase in popularity, retailers will need to develop innovative ways of protecting their margins.

Sales via mobile continue to grow, but with regional bias

Awin had predicted in the run-up to Black Friday 2018 that it might be the first time we witnessed mobile sales breaching the 50% threshold. Although that didn’t happen, there were markets, such as the UK, where handset sales did usurp desktop ones.

Overall, the network saw an average increase in smartphone sales of around 10%, but behind that headline were a number of details that revealed more about where this growth was primarily occurring.

Regionally speaking, while mobile growth was relatively flat in the US and France, markets such as Germany and Poland saw sizable increases (albeit from lower starting points), indicating an evolution of consumer habits there.

Graph 3

In fact, Poland’s mobile sales almost trebled compared to 2017, a rise that mirrors the increased use of social media there (around 2m new Polish users became active in the last 12 months), with its propensity for being accessed via mobile.

With Awin tracking almost £80,000 every minute of the day during the four-day spending splurge, the Cyber Weekend affords a unique opportunity to gather the kind of ecommerce insights that are invaluable for understanding changing trends and patterns in retail as we enter 2019, and the inevitable challenges and opportunities it will create.

Industry Insights Retail Affiliate Marketing

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