Black Friday has been and gone for this year, and reports suggest that retailers have yet again smashed sales records across the board.
Online sales in the UK have drastically improved from last year while high street brick and mortar retailers have continued to suffer. Conversion rates and traffic numbers have shot up compared to averages over the rest of the year. Attention from businesses will now shift towards specific fulfilment methods to be able to retain the customers they have gained during the event to maximise future sales. But where did Black Friday come from and how has it turned into the busiest period of the year for retailers?
Black Friday and Cyber Monday, or BFCM for short, has become an unofficial national holiday across the globe over the last two decades. Retailers in all industries dedicate the fourth weekend in November to slash regular product prices for a limited time in order to boost sales and acquire new customers to increase long-term revenue streams. The event has become increasingly popular in more and more countries across the world. Image source
The evolution of Black Friday
Initally started as a one-day event in the USA in the 1950s, Black Friday was dedicated to giving consumers the best deals on various products before reverting back to normal pricing the following day. Today, retailers dedicate multiple days to the event, with some businesses, such as Very.co.uk, teasing Black Friday deals weeks before the event takes place. The continual development of ecommerce has, however, changed the game as retailers are now able to promote BFCM sales and events directly to target audiences on multiple online platforms. Since 2005, Black Friday has been the busiest shopping day of the year, aided by the introduction of Cyber Monday, thus stretching the event out and allowing smaller retail websites to compete with established high street brands. Other countries have since adopted their own Black Friday campaigns, including South Africa, Japan, New Zealand and the UK. In the UK, the event has grown rapidly over the last five years, with companies like ASDA leading the charge. And in 2017, retail sales in the UK grew faster in November than in December for the first time. The big winners of BFCM 2018 were the companies that stretched the event out over one, two and in some cases three weeks. Amazon, John Lewis and Very all came out on top with John Lewis reporting a record sales week for the event. Itâ€™s no coincidence that the demand for BFCM has grown so much that brands are able to justify turning the event into a week-long affair. Image source
How do retailers profit from BFCM?
The idea of offering every potential customer deals of 40 per cent, 50 per cent and sometimes more off the original price of a product may appear damaging to a companyâ€™s profits, and this is the case for many businesses across BFCM... But what these companies get in return for losing out on money is extremely valuable, and that is customer retention. The economics for big retail companies during BFCM is simple: sell loss leader products at heavily discounted prices to be able to sell customers different products in the future. Itâ€™s a method of securing customers beyond the shopping holiday. The advantage of BFCM for retailers is that consumers are more likely to make a purchase without knowing too much about a particular business, instead focusing on the potential savings. To make a business stand out from the thousands of retailers offering similar discounts over the week, follow-up efforts and company efficiency must be prioritised. It is not enough to expect customers to return to your business because you offered them a good deal on BFCM. Now you've captured the customer with a great deal, fantastic fulfilment and a website that hasn't fallen over, what do you do to keep that customer coming back for more? Image source
Redbox Digital client: Latest in Beauty
UK-based beauty box company, Latest in Beauty reported conversion rates of more than 50 per cent above average across BFCM, highlighting how an efficient and effective ecommerce system can produce results over the busy period. Latest in Beauty also reported that its biggest day for orders, highest conversion rate and biggest single hour for traffic for the week all came on Thursday, not on Black Friday or Cyber Monday. This shows that the development of BFCM appears to be going beyond just two days of popular trading and growing into a full week of discounts. It also highlights that businesses are taking advantage of the expansion of the event by starting discounts earlier, appealing to consumers before the â€˜officialâ€™ beginning of BFCM. Image source There are many things that businesses need to do to every other day of the year to keep customers interested:
Have an accessible website
Having a website that is quick, customer-friendly, and mobile-friendly is vital for businesses all-year round, but even more critical over this busy period, where a significant traffic increase is expected. Site speed is essential during BFCM, and if your website and ecommerce system are not optimised, then the chances of a customer going straight to a competitor with similar discounts are likely. A recent Loqate report stated that two-thirds of consumers would abandon a purchase if they encountered issues entering their address during the checkout process. Consumers want the process to be as quick and efficient as possible, and if it isnâ€™t, your business will lose potential long-term customers.
Prioritise email follow-ups
Following up with a customer is vital. Requiring customers to enter their email address at the point of purchase allows you to keep them up-to-date with the status of their order, and it also gives you a platform to build a strong consumer-brand relationship with them in the future. Simple thank you emails, suggested product emails based on previous purchases or emails giving customers an opportunity to review their experience in case anything went wrong are all ways in which to develop a strong bond with a customer and make them feel valued. Giving consumers a chance to speak to you directly even when they are making a complaint can retain customers who otherwise would not return to your brand.
Offer extra incentives
Rewarding customers for choosing your brand for their purchases will draw them back to your website in the future. Offering incentives like 20 per cent off your next purchase â€œas a thank you for shopping with usâ€, or allowing them to join a loyalty scheme to receive benefits in the future means they are more likely to stick with you. Something brands like The White Company do seamlessly, offering a â€˜sneak peekâ€™ on sales, product launches and exclusive discounts for those who subscribe to their loyalty programme.
Have a cracking social media voice
Research gathered by Synthesio revealed that in a period of one month before BFCM 2018, the phrases â€˜Black Fridayâ€™ and â€˜Cyber Mondayâ€™ were mentioned over two million times on Twitter. More and more people are using social media to look for the best deals available to save time on visiting websites individually. Social media is an essential tool in the build-up and aftermath of BFCM that businesses must take advantage of to succeed. This can be achieved by structuring informative and entertaining social content around the relevant customer demographics of the business and making them aware of the exact BFCM deals coming up, meaning the consumer is more likely to remember you when searching for the best deals during the week. Image source
How Successful was BFCM 2018?
Sales continued to rocket worldwide during BFCM this year, with the UK being no exception. The decline of the UK high street continued to show, with sales only increasing by a mere 0.5 per cent across the period and footfall in physical shops plunging by 6.5 per cent compared to BFCM 2017, the biggest drop in three years, according to data from BDOâ€™s High Street Sales Tracker, which takes into account date from over 85 retailers. Online sales, however, shot up by 30.8 per cent compared to averages over the week, crowning BFCM 2018 as the biggest Black Friday event in the country for four years. The event also gave the British retail sector an injection of Â£7bn and payment service provider Barclaycard reportedly had a record number of transactions over the period, up by 32 per cent compared to 2017. Marketing giant Amazonâ€™s dedicated BFCM campaign of speed and efficiency alongside a personal, developed customer service appeared to work again this year. They experienced a record-breaking event in the UK, with British consumers buying as many as 100,000 toys and 60,000 beauty on the first morning of BFCM. Read more about Amazon's omnichannel efforts this year in our blog, 'Amazon: The home of Black Friday'.
The adopted shopping holiday from the United States is showing no signs of slowing down, and BFCM 2018 has demonstrated that the online retail market is stronger than ever, with shoppers choosing convenience over the high street for yet another year. Maintaining a high-quality ecommerce system and using the event to retain customers for the future is vital for the success of businesses at a time where products are sold for much less than usual. As Black Friday and Cyber Monday has once again smashed the records set in previous years, the figures for 2019 are set to raise the bar once more. Utilising discount campaign periods can have an astounding effect on brand awareness and customer growth, but businesses must make this an all-year-round effort to really reap the rewards, ensure customer retention and continue to see growth. Featured Image source: Screwfix