Black Friday has become the highlight of the Christmas season and a microcosm of the wider trends impacting retailers today.
In anticipation of our upcoming report on Black Friday, we’ve taken a look at the numbers, and identified three key lessons retailers can learn to drive success during crucial peak periods and beyond.
Mobile matters more than ever
Black Friday and Cyber Monday 2015 hammered home the need for retailers to take mobile seriously. While mobile traffic has been on the rise for some time, growing by 2000% since 2010, there has been a question around the lower conversion rates seen on mobile, and if consumers were really shopping in this way, or using mobile more for research and comparison (IMRG, June 2015). Black Friday 2015 put aside any doubts, with over half of visits to e-commerce sites coming from a mobile device, and more than a third of sales now coming from this channel — up from just 4% in 2010. This confirmed what digital leaders, such as Shop Direct, had started to recognize in June of 2015, seeing smartphones creep ahead of tablets to become their fastest growing sales channel (Ecommerce week, 2015)
Get relevant with returns
Returns is another issue that comes to the fore during Black Friday, with estimates suggesting that UK retailers are incurring costs of up to £180m on goods purchased during the 24 hours of Black Friday (Telegraph, November 2015). The majority of this cost comes from handling returns, never mind the fact that by mid December up to £600m worth of stock is tied up in the returns process, unavailable for sale and losing margin. Returns are inevitable, and in the short term retailers have sought to pass rising costs on to their customers. Truly innovative retailers look to the source of the problem, to better understand their customers behavior, and offer relevant solutions. The psychology at play on Black Friday, of scarcity and urgency, makes it even more important for retailers to understand who they are targeting with discounts, and the likelihood of whether they will end up costing the retailer more money than they make.
Pick and mix your peaks
From the Christmas creep to Cyber November, retailers have sought to differentiate themselves through earlier start dates and week long offers. The result is an extended the holiday shopping period that some suggest dilutes the power of Black Friday, leading to claims it is greying out. However this is not necessarily a bad thing, knowing how and when to focus your discounting strategy is key - last year Argos did a roaring trade on Black Friday, but this distorted their overall results (Guardian, 2016). Some have called for the end of Black Friday, while others have started to build their own shopping holidays based on the phenomenon, such as Amazons ‘Prime Day’, which actually surpassed their Black Friday results (Tech Crunch, 2015).
These are three huge challenges for retailers today and there is no one size fits all solution. Our upcoming Black Friday report will examine these game changing trends and more, weighing up the benefits of Black Friday for different types of retailers and offering recommendations for success on Black Friday and beyond. If this has piqued your interest then sign up for our Black Friday breakfast where we'll be exclusively launching the report.