Whether you choose to partake in the annual extravaganza or support an indie-friendly alternative, there will be no escaping this year’s Black Friday. Many cash-conscious consumers will be holding out for bargains as they plan their Christmas present shopping while retailers will be hoping to boost revenue and shift excess inventory.
So, how might the current climate change the standard Black Friday formula? Here Simon Binge, commerce senior manager for customer transformation at Capgemini, offers some key strategic changes expected from bigger retailers for 2022 with some top tips on how indies can prepare:
· Pressure on costs to shape promotional activation: Retailers will be facing into enormous costs pressures across cost of goods, transport, energy and overheads, but will be cautious on passing the full burden of this onto consumers. While traditionally Black Friday has focused on money-off or percentage-off discounts, the cost challenges this year will lead to many retailers exploring value-add and bundling promotions. By bundling products together, retailers are able to drive higher average basket value while improving unit economics through efficiencies in warehousing and fulfilment.
· Campaigns to start earlier and run later: It’s well documented that many retailers will be heading into Black Friday with excess inventory due to a summer of depressed sales combined with supply chains strategies brought into play to combat disruption. Black Friday is a key period for clearing through excess supply, but with the aforementioned cost challenges, retailers may struggle to offer deep enough discounts to win the share of attention necessary in such a short-window. Many retailers will be looking to bring forward their key campaigns, and potentially run them longer than usual. Amazon’s October Prime Day event is an example of a retailer trying to bring forward the promotional period and generate buzz. Nielsen reported the event landed well with consumers as a ‘subdued’ Black Friday prequel. With consumers eager to strategically capitalise on sales and with many earmarking budget to utilise over the sales period, retailers should use this opportunity to sway consumers’ purchasing decisions.
· Retention over acquisition: Black Friday is already the most expensive digital marketing period but combining that with a World Cup means retailers will face spiralling acquisition costs. To combat this, retailers will need to focus on increasing order frequency from their existing customers through personalised offers and incentives. Similarly, owned channels and organic marketing like email, unpaid social, content blogs etc are lower cost alternatives to generating site traffic.
· Service as a differentiator: With commercial challenges affecting the depths of discounts available, quality of service becomes a big selling point. Retailers who offer fast, free delivery or omni-channel fulfilment and returns, will want to make sure this is marketed clearly, communicated frequently and, most importantly, delivered convincingly.