There is no doubt that Black Friday continues to be the biggest shopping day of the year. Over the past few years it has been rapidly growing in popularity.
Last year Barclaycard announced that from 25th November till 2nd December, sales volume was up 7.1% and sales value had rose by 16.5%, compared to 2018.
With this year’s COVID-19 restrictions and less people going into stores, we expect those increases to bigger than ever.
Where will people shop?
It’s fair to say, there has not been any mad rushes outside of stores, or people fighting over TV’s in Asda since back in 2014.
Even though last year’s Black Friday footfall on the high street had rose by 3.3% YOY, traditionally in the UK Black Friday has predominantly been online. A far cry from the manic shop scenes seen in the US!
With Covid-19 restrictions in place which limit the number of customers instore, we expect the online trend to continue as this year people will continue to decide to shop from their sofas.
How much is the right discount?
In previous years, brands have been more refined with their discounting, carefully using it to clear certain stock, as opposed to flat discount rates.
This year we expect Black Friday and the peak period will be more discount heavy than ever. It is estimated as much as £15bn of stock is lying unsold in stores from retailers underselling earlier in the year (Retail Gazette, 2020).
But how much discount is enough to give to draw customers in, but not too much to damage margin? When we analysed the discount rates from the top 500 retailers in previous years, predominantly brands use between a range of 20-50%, with the 30-40% being the most favoured bracket by retailers.
How much will customers be spending?
Consumer habits are much harder to predict this year with increased economic strain from the pandemic. According to eBay in August more than 1/3 of customers started their Christmas shopping earlier this year.
So, does that mean they will have less to spend over the peak period? Consumers spent on average £551 on Christmas shopping and celebrations last year, but this year 44% of are planning to spend the same, and a third (31%) actually plan to spend less.
But there will always be those bargain hunters looking for discounts and offers. As well some may have saved more money during the lockdown period therefore may spend more upon themselves this year than they did in 2019.
Lets not forget that for the second year running Black Friday will not only fall on a payday again this year, but it’s the last payday before Christmas – making the potential of high spending even more prevalent.
What is the most optimal timing?
Every year we start to see interest in Black Friday gain momentum at the end of October according to Google Trends data.
From RedEye’s own research of the top 500 brands, last year’s Black Friday ran for around 38 days, with brands sending from 1st October to 9th December, with most retailer’s launching their Black Friday campaigns on Monday the week before Black Friday.
We expect email volume to ramp up from the 16th November this tear with brands running typically for a two-week period with the highest send volume over the actual Black Friday
How can I collect new customers before peak?
Over the past couple of years, we have seen paid social ads increase in popularity as a great channel to acquire and capture preferences of a new customer before peak with brand such as Amazon and Dyson utilising them.
Paid ads encouraging prospects to sign up to brands to be the first to know about their deals, and then converting them via a direct channel such as email, results in a far lower cost tactic to acquire new customers opt in before Black Friday, as opposed to paying a premium to target new customers over the peak period.
Brands can cleverly use their existing CRM data to create lookalike audiences that will also help to make sure you acquire the most profitable customers.
Simply create segments such as previous peak purchasers, VIP customers, or those with recent website engagement such as browsed products or basket abonnements, to form the best lookalike audiences to use.
How can I capture what customers want over the peak period?
Customer behaviour completely changes during peak, so you need to use more relevant preference data to inform your segmentation. Some existing customers might be eagerly waiting for the big deals to drop from their favourite brands, others might not want to hear of a single deal.
For both existing and newly acquired customers brands should look towards capturing peak specific preferences to help inform both their segmentation and personalisation strategy over this period.
Product, brand or category preferences are essential to form highly personalised creatives through dynamic content and subject lines to draw the customer in to maximise your campaign engagement and revenue.
Alternatively, you could include additional channel preferences such as SMS reminders for when your sales are launched to increase the reach of your campaign. Brands must ensure that whatever data is collected, will form part of their campaign strategy to not let this additional data go to waste.
However, it is important to remember that not all customers will be interested in your Black Friday sale. In the UK customers are divided, with 48% of customers saying they are either not interested or do not intend to buy during Black Friday according to PWC.
If you send promotions to everyone, you risk in increasing the number of unsubscribes in your database. Simply try asking your inactive customers whether they want to opt into Black Friday sends or offer the opportunity to snooze emails for a certain time period, will enable you to keep hold of a larger – more valuable – database all year round.
Brands such as Papa John’s achieved amazing results with a 30% deduction in unsubscribes through offering their customers the opportunity to ‘snooze’ their emails for a short period of time.
Look out for part 2 which will focus on tips for during peak! Guiding you on deliverability best practices to avoid you not even reaching the inbox, along with managing the perfect segmentation mix!