Black Friday: Finding Method in the Madness
Black Friday hit the shops for the second time in the UK last Friday, and what a difference a year makes. Following the madness of last year’s biggest shopping day, this year saw retailers approach the chaotic day with a methodical approach that differed dramatically to 2014’s.
In light of this, Eric Fergusson, Head of Retail Services at eCommera takes a look at what changed this year and gives his predictions for 2016.
Retailers like Sweaty Betty, feelunique.com and All Saints tried to hit the ground running with a flat discount on everything. This can be a viable strategy for retailers with overstock across the board, but it is a risky strategy for most. Customers may come to expect such blanket promotions and hold back spending in anticipation; plus retailers run the risk that acquiring new customers through such tactics will result in underperformance by these cohorts in future years.
Advice for next time: Carefully consider the viability of this strategy given your current stock levels, weighing increased sales against the additional resources required to support the promotional event. Being able to fulfil orders to promise is also vital: this year some fulfilment partners are already struggling to keep up with demand, resulting in delayed deliveries and unhappy customers.
Sales on overstock and high-margin items only
This isn’t necessarily a new initiative but it is a proven one. This year saw retailers such as House of Fraser, Debenhams, Currys and Sandro all focus their sales around items that were overstocked in the warehouse or have a higher margin.
The benefits of this are obvious; retailers can clear the stock that they may not be able to sell at full price, whilst limiting the margin they are giving away. However retailers need to be sure not to focus on overstock too much as this may have a long-term impact on brand perception.
Advice for next time: Mix up your promotions. Be sure to use overstock in the sale activity but also include some current and trending products to keep consumers happy; otherwise you may run the risk of consumers who don’t know your brand feeling disappointed about the proposition and therefore not returning.
Declining to participate
Asda was the leading brand for this. Well known for the fistycuffs that happened in store in 2014, they decided to not participate at all this year. And by announcing that they were instead spreading their offers throughout the festive period, it was positioned perfectly with their overall proposition.
While the benefits of this particular strategy are clear - including less order frenzy in a short period, control over margins and better fulfilment - it may have left some customers disappointed.
Advice for next time: Actually we think Asda did a great job this year at managing expectation and offering a like-for-like, if not better, offer to consumers. However, one thing to remember is that pulling out of such a prestigious shopping day may cause consumers to shop elsewhere. But if you have a loyal customer base, as Asda does, then they will more than likely be back. Testing, testing, testing…
Unfortunately this was one thing that didn’t change in 2015. Many websites still saw significant downtime and errors on the website, most likely down to inadequate testing. Retailers must start the testing process by April in order to hit the ground running when peak season comes around. By finding the weak links and bottlenecks early on, retailers can avoid the disastrous “We are receiving a high volume of visitors right now, we will be back up and running as soon as possible” messages – who wants to see that when they are shopping for bargains?
Predictions for 2016
I would predict that Black Friday 2016 will see many retailers following the lead of big organisations like Asda and taking a step back from the day altogether. While the madness of Black Friday is unlikely to fizzle out in the US, I wouldn’t be surprised if over time we saw fewer and fewer UK retailers taking part as retailers begin to question the real value.
Some, like House of Fraser, have mastered the art of short sales, with their charity weekends and big brand discount days, and I would predict a lot more of this activity in the coming years. But one thing is for sure, the retailers who are going to take part must ensure they are prepped and ready for the huge increase in traffic and orders on that day. Test, test and test again and don’t compromise on the customer experience; on a day like Black Friday it is more important than ever.