by Kris Tait
Black Friday is a landmark holiday in the retail calendar, so much so that in previous years, some industries have seen the post-Black Friday madness amount for as much as 40% of their yearly revenue. The day is famous for frenzied shoppers desperate to snag a holiday bargain, and stores find themselves fighting against one another to see who can make the biggest reductions.
This year, instead of viewing Black Friday as a fleeting day of discounts, retailers need to think long-term and use the event as an opportunity to build strong relationships with customers both new and existing, to maximize sales all year round.
It’s easy for retailers to get caught up in a race to the bottom with big discounting days like Black Friday, but our research shows that while a flash sale sees a sudden spike of customers, it often does very little for long-term growth. Last Black Friday, we saw a 141 percent increase in revenue over the four-day weekend of all retailers surveyed, due to a 59 percent improvement in conversion rates.
However, huge discounts meant that average order values (AOV) were up only 0.5 percent. There is clearly a large correlation between order values and price reductions; those who partake in Black Friday by offering larger 40 percent discounts will see a week-on-week drop in AOV of 12 percent, so it’s important to strike a balance.
Fail To Prepare, Prepare To Fail
Black Friday is almost here, and although sales have already begun, it’s never too late to deploy smart tactics, drive sales and learn more about customer behavior. The data you collect this Black Friday can be incredibly useful in understanding how to approach sales periods throughout the next 12 months.
Simple things like ensuring your mobile and desktop websites are prepared for the increase in traffic may sound like a given, but a website going down is a sure-fire way to infuriate customers and lose their business. Moreover, last year we found that over two-thirds of Black Friday’s traffic was mobile, so having a robust app or website is essential.
Black Friday is also a great opportunity to make sure your customer data is well managed so you can figure out who your top prospects are. Reward loyalty and make sure your existing customers are targeted first. A great example is Mr. Porter, who do a 2-3 sale preview to loyal customers first, before opening up to the masses. Alongside this, agree strong messaging between all marketing departments so that your customer sees a consistent message across search, social and email.
By using the power of clean and consistent CRM data, your offers and messaging can all be linked to user behavior, which should increase conversions. This should be a prerequisite in your plan – particularly when all brands are battling for a share of your wallet. In the few days ahead of the event, I’d expect to be reminded across social ads; using countdown ads or offering discount teasers at peak times of day. At this stage, excitement should be building and retailers should be making their final online preparations.
When the big moment finally arrives, you still have the opportunity to make the biggest impact, by maintaining a flexible approach. Keep a close eye on your most popular discounts and be aware of stock levels to then modify marketing efforts accordingly. This will prevent customers from feeling disappointed if they miss out and show that you have a deep understanding of your audience. Editing offers and keeping copy dynamic will encourage customers to return time and time again.
Throughout the Black Friday period, be adaptable and monitor your customers closely to learn from their behaviors. By using the event as an opportunity to get to know your key audience, you’ll be rewarded with invaluable data and customer loyalty all year round. I’d challenge all brands to do some post-event analysis, which discounts worked, how did this impact AOV, is 20 percent or 25 percent better. Even if sales did see a spike, was this really a successful Black Friday for your brand?
Kris is Managing Director of Croud’s US business and has been an integral part of Croud for eight years. Kris is responsible for driving overall growth and development of the US business – encompassing sales, marketing, operations and client strategy.