Retailers need brand new approaches to stores, staff, and discounts.
Black Friday and Cyber Monday (BFCM) used to be major retail events. Shoppers marked their calendars, camped out of retail stores, and woke up extra early to catch the best cyber deals.
That wasn’t the case in 2019.
Black Friday and Cyber Monday have evolved from being shopping “days” to becoming a month-long period of sales that start with “early access” promotions and previews and end with “surprise” sales extensions.
We can safely assume that Black Friday and Cyber Monday are becoming non-events and the data from 2019 supports this. Foot traffic was down on Black Friday despite an increase in overall sales during Thanksgiving weekend. What’s more, Cyber Monday sales were eclipsed by Black Friday for the first time, indicating that the lure of scoring online deals the Monday after Thanksgiving isn’t as strong as it once was.
It’s not all bad, though. The data shows that consumers still want to spend. And while they’re not heading to brick-and-mortar stores to make their purchases, physical retail spaces continue to play an important role, particularly when it comes to anticipating and fulfilling customers’ orders.
Let’s take a closer look at how BFCM has changed in recent years, and explore the ways that retailers can stay relevant.
Social and Mobile Apps Were Instrumental in Driving Awareness
During the weeks and days leading up to Black Friday and Cyber Monday, you couldn’t go on Facebook or Instagram without seeing Black Friday previews and ads for “early access” sales. Retailers across all categories (but particularly DTC companies) spent a whole lot more on digital marketing this year, with brands increasing their digital ad spend by 22% between Q3 2018 and Q4 2019.
Meanwhile, larger retailers leveraged their mobile apps to drive awareness. Both Walmart and Target aggressively sent out BFCM push notifications throughout the weeks leading up to Black Friday and Cyber Monday.
So, did all that promotion pay off?
Let’s look at the data.
Foot Traffic Was Down, but Overall Sales Were Up
Traffic to brick-and-mortar stores dwindled in 2019. According to ShopperTrak, Black Friday foot traffic was down 6.2% compared to 2018. A recent survey by the NRF surfaced similar findings. The study found that during Thanksgiving weekend, 124 million consumers shopped in-stores, while 142.2 million took their shopping online.
None of this should come as a surprise. It’s simply more convenient to find offers and products online these days, and shoppers don’t need to head to the store. Another reason for the decline in foot traffic on Black Friday is the “day” itself has become irrelevant, thanks to the fact that retailers are racing to offer deals earlier in the month — with some stores (e.g., Walmart) running holiday deals a full five weeks before Thanksgiving.
Why would shoppers wait to go to the store on Black Friday when they can snag great discounts days or even weeks in advance?
…Yet Stores Were Still Busy
Retailers may have seen fewer customers walk through their doors, but that doesn’t mean stores were dead on Black Friday.
As the Wall Street Journal points out, certain retail locations—such as the Target store in Brooklyn—didn’t see a Black Friday rush; however, employees in the store were still busy fulfilling online orders that needed to be shipped or picked up.
Many retail futurists have predicted that stores of the future will act more like fulfillment centers rather than “shops” where consumers buy products. Based on shopper behavior this year, it looks like this prediction is quickly coming to pass.
The retailers that will thrive in the future are those that can leverage data to inform their local stock management strategies.
A store will be an effective fulfillment center only if it stocks merchandise that local shoppers want. As such, retailers need to get better at tapping into trends and shopping patterns in their respective regions so they can ensure that every store’s inventory reflects the needs of those areas.
One way to do this is to leverage AI and automation technology like IBM’s Sterling Fulfillment Optimizer with Watson. Adopting solutions that take the guesswork out of fulfillment and automate parts of the process will enable retailers to maximize their fulfillment capacities — something that is crucial during peak shopping seasons like holidays.
Things also need to change from a staffing perspective. The demand for roles like greeters, associates, and clerks will wane as fewer people head to the store to shop. Retailers may need to hire or re-train in-store workers in the areas of BOPIS, online order fulfillment and customer support.
Cyber Monday is Losing its Luster
It’s interesting to note that Black Friday topped Cyber Monday as the busiest day for online sales for the first time, with 93.2 million shoppers compared to 83.3 million.
Again, this can be attributed to the fact that more Black Friday shoppers are spending money online. Retailers are offering attractive online deals before and during Black Friday, so the “cyber” in “Cyber Monday” isn’t a strong enough hook.
With virtually every merchant slashing their prices and offering deals early, the retailers that won BFCM were the ones with the most relevant offers.
Nordstrom, for example, promoted its designer clearance sale to shoppers who’ve previously browsed or purchased high-end items. The retailer also highlighted products that are “trending now” to showcase other popular items.
Data and analytics play a crucial role in these promotions. Retailers should ensure that their customer data is fed into their sales and marketing platforms, so they can offer the most relevant deals to the right shoppers and at the best time.
Aside from having the right data, creativity was key during this year’s month-long BFCM shopping event. Finding the right angle is important if you want to set yourself apart from the sea of discounts flooding into people’s inboxes and social feeds.
One retailer that made an effort to stand out is Ulta, which used “Friendsgiving” as a hook to lure early Black Friday shoppers.
Some Are Offering “Surprise” Extensions, but Are They Even Effective?
For many retailers, starting early isn’t enough. Several merchants ran extended Black Friday and Cyber Monday promotions to “surprise” shoppers.
But consumers have already caught on.
The move to offer deals early and then extend the promotional period simply adds to the fact that Black Friday and Cyber Monday have become non-events. We’re at a point when these days are just a regular part of the overall holiday shopping season.
The sense of urgency that Black Friday once brought is long gone. Shoppers know that even if they miss a deal, there’s likely going to be a new one tomorrow or next week.
As Tami Kim, a professor at the University of Virginia Darden School of Business told The Washington Post, “Retailers are offering more deals, starting earlier. But consumers aren’t excited.”
Where to Go From Here
Black Friday used to be a major shopping event that involved shoppers literally busting a retailer’s doors open. It used to be a loss-leader tactic to drive foot traffic with the hope that customers would buy other items while they’re at the store.
But the rise of eCommerce and the increasingly competitive landscape have made physical door-busting irrelevant. And while that same “loss leader” tactic can work online, retailers need to do more to truly win over holiday shoppers.
In today’s post-digital world, the key to winning BFCM lies in offering compelling and relevant deals — ideally ones that are based on customer insights that the retailer has collected in the months leading up to the holidays.
Companies should also rethink the functions of their physical stores during the holiday season. By arming their brick-and-mortar stores with the right data, products, and people, retailers can leverage these physical spaces to save costs and better serve shoppers.
The bottom line? The heyday of BFCM is over. Consumers are on to all the “previews” and “extensions”, so retailers need to get smart and creative to win.