‘Black Friday’ is the term used to describe the day that begins the Christmas shopping period. Originating in the US, Black Friday has gone global, as international businesses offer discounted prices and promotions on this day annually.
Amazon first introduced Black Friday to Europe in 2010. In its EU debut, the marketplace giant introduced ‘Black Friday Sales’ to the UK market. In the UK, Germany and France, Black Friday has become a more robust tradition. EU shoppers have to some extent embraced the US shopping holiday. Statistics show almost all EU consumers were aware of Black Friday in 2021. The report returned a near 100% awareness rate from each EU Member State. Cyber Monday awareness was also high but to a lesser extent.
Through the financial ups and downs of the last ten years, Black Friday has prevailed. Yet, as EU shoppers become aware of what they buy, Black Friday’s popularity hangs in the balance. Do EU shoppers appreciate a day that provides lower costs for products? Or are they turning away from the shopping tradition?
Black Friday 2021 in Europe
Statistics from Black Friday Europe 2021 show that sales were up. Although considered an in-person event, its EU adoption has had more success online. However, increased online sales may have also been a result of the COVID-19 pandemic and subsequent lockdowns. In France in 2021, online sales increased by 40% on the previous year. Popular categories among French shoppers were:
– Consumer electronics, which amounted to +185% of purchases and apparel made up +179%.
In Germany in 2021, Black Friday sales increased by 32% compared to the yearly average. But this figure shows a decrease from the previous year, which saw an 84% rise through the Black Friday period. Germany’s already saturated market may explain the slower and more turbulent adoption of Black Friday. In Germany the most popular categories proved to be:
– Consumer electronics which grew by +190% and hobby/leisure items by +181%.
How has Black Friday been received in Europe?
Black Friday in Europe has gained criticism, despite consumer enthusiasm in previous years. Movements like ‘Green Friday’ that admonish the sales frenzy are punctuated by the global climate crisis. In 2021, the environmental group Greenpeace organised a protest, building a high tower of packaging boxes blocking a department store in Osnabrück, Germany, during Black Friday.
They targeted this company for mass-producing textile consumer goods sold online. The group stated current packaging laws were not enough to combat the flood of disposable plastic waste. Their intention was to draw attention to ‘consumption alternatives’ during Black Friday. Many businesses across Europe have now initiated proposals to put a stop to plastic waste to reduce international consumption of non-biodegradable materials.
Fake Black Friday deals have also influenced a decrease in European enthusiasm. In 2020, Which? investigated Black Friday deals, finding that 98% of discounts were ‘available for the same price or cheaper in the six months after the sales’. Although consumers assume prices fall over time, they found that 85% of products had also been the same price or cheaper in months before Black Friday. Shoppers doing their due diligence will be aware of this trend and might be more vary of the validity of your Black Friday deals.
Supply chain issues have also caused apprehension over Black Friday 2022. The 2021 Suez Canal blockage caused major disruption for ecommerce businesses. After waiting months to restock warehouses or get items to customers, Black Friday sales volumes sparked issues for international sellers.
Sustainable Black Friday examples
Businesses are more commonly striving to be more sustainable, which has influenced many to approach Black Friday in a more ethical way. These brands have found a way to harness Black Friday’s surge in spending for the greater good:
Deciem – This brand extends its Black Friday promotions. Rather than encourage impulse purchasing on a single day, Deciem stretch Black Friday to span a month. This way customers can shop slowly with less pressure.
Made Trade – In 2021, Made Trade partnered with The Giving Grove for Black Friday. Together, with 10% donations from each sale, they planted 5 new urban orchards. This scheme creates local and renewable food production systems for local families.
Alternative ways to take part in Black Friday
Instead of the usual Black Friday practices, ‘Green’ Friday encourages businesses to run promotions that combine purchases with sustainable opportunities. Here are a few ways you can make a positive impact:
Use sustainable materials
Improving the sustainability of your materials should already be high on your list of actions. Black Friday can mean increased sales so more packages are sent out. Sourcing recycled and recyclable packaging materials is a great way of reducing your plastic waste contribution.
Additionally, evaluating your logistics practices can also be a good way to spot where improvements can be made in your supply chain. Ensure your brand uses fair trade standards and an environmentally conscious means of shipping goods internationally.
Educate customers on your mission
Encouraging thoughtful consumer purchases on Black Friday means educating customers on why your product is worth the sale.
Giving customers information on your aims and approaches to sustainable business enables them to also give back through purchasing.
By doing so, you build better relationships with your customers and gain loyal shoppers who will advocate for your brand.
Contribute to charities
Another option to consider is donating a percentage of each sale to a charity. By doing so you can show your efforts to reduce your business’s impact on the environment. Groups that support rewilding, tree planting, plastic waste clean-up, or ocean conservationist groups, are great options when looking for an organisation to donate to.
Consumers today do their research. Shoppers are becoming selective, as reports of global pollution and environmental damage saturate the news. Customers will want to know what your brand stands for and the ways you are working toward becoming a greener business. Even if you haven’t yet implemented these plans, be transparent about your intentions from the off. Greenwashing can easily (and rightly) ruin a brand’s reputation, so be honest, your customers will appreciate it.
VAT and Black Friday
Extra VAT consideration will be necessary to take part in Black Friday 2022. Your enterprise needs to add value not only to customers but to our planet. People will be searching for brands they can trust. If done right, Black Friday 2022 could set you on a path to gaining authenticity and loyalty in the EU market. If you’re keen to take part positively in Black Friday, VAT should be considered before the event.
VAT rates throughout the EU vary. Each country sets its own rate, and this can change depending on the item’s classification. When sending goods anywhere within the EU, you might need to be VAT registered at that location. Rates across the EU range from 17-27% and using incorrect rates could cause a major headache when it comes to filing VAT returns.
It’s important to apply the correct EU VAT rate depending on where your customer is located. This can be done during checkout if you sell on your own website. If you sell on a marketplace and you’re a non-EU business, the marketplace will calculate and charge the correct rate of VAT. EU businesses selling on a marketplace will be required to apply and collect VAT from customers themselves.
Pricing has long been the basis for Black Friday’s appeal. Offering discounts on goods can encourage consumers to buy and buy more. This increases average basket values and opens your business up to new customer pools.
For EU-based sellers, the OSS (One Stop Shop) Scheme can help when selling in higher volumes throughout the EU. With OSS you can report all intra-EU sales through a single quarterly VAT return. Regardless of consignment value, you can send throughout the EU using your OSS portal to collect and report all VAT owed.
For non-EU-based sellers, increasing numbers of EU sales means more imported consignments. If you sell to any EU customers, you will need to be VAT registered wherever they are located. However, rather than a VAT registration in every country where you have customers, you can register for the IOSS (Import One Stop Shop) Scheme. This allows you to register in a single EU Member State and report all distance sales of imported goods via a monthly return. You will only be eligible for IOSS if consignment values stay below EUR 150. When running promotions during Black Friday, IOSS users will need to ensure this threshold is heeded to avoid extra fees and customs requirements.
Stock levels can be of concern during these sales events. If you run a scaling business, you may have limited space to store products. Using a 3PL could remedy these issues. Many 3PLs available today have implemented strategic sustainable transportation operations that reduce unnecessary journeys and harmful emissions. By using a 3PL to store your stock, your items could be effectively closer to customers and can limit excessive emissions that stem from frequent long-distance shipping. Additionally, as 3PL companies are now charged for waste removal, solutions to reduce overall disposal have been implemented by many.
Keep in mind that storing goods for sale in an EU 3PL will require you to have a VAT registration at that location.
This year, with a rise in ethical consumerism and environmental responsibility, there may be a more conscious Black Friday event this year. Participating businesses will need to thoughtfully present their offering and explain why it’s worth a purchase. Becoming sustainable is a learning curve for most companies, but long term, these efforts will reap significant rewards.
If you have any questions about VAT and how to get registered before Black Friday, get in touch with our team who can help.