Black Friday, Cyber Monday – the retail atomic bomb
As retailers, every year we prepare (and brace ourselves) for Black Friday and Cyber Monday in November. However, we’re not just planning and bracing for the two days where conversion rates explode and consumer spending goes into meltdown. Instead, because of the insatiable consumer demand and retail participation in both events, we are now dealing with a period of around ten days that include sneak peak’s, VIP access, final sale, absolute final sale days and any other creative way that allows us to expand the epicentre of the two big days.
Online retailers are expanding both in the duration of their promotions and the depths of discounts offered to ravenous sale shoppers causing significant disruption to not just November trading but the entire ‘peak period’. Our participation has perpetuated the consumer’s expectations for this discounting ‘creep’ both pre-and post the two days.
While unprecedented volumes of sales are being made in this expanding sales window at significantly lower margins, savvy shoppers are only compounding the dilemma by spending less of their money and more of their time researching. These shoppers are entering the Black Friday/Cyber Monday period equipped with a target list of the places they intend to attack that has been scouted for the lowest price and free shipping included.
Like the moment an atomic bomb is dropped – the pressure sucks everything in to its centre from miles around, then explodes into a thermonuclear mushroom of low margins and discount drunk consumers. And while this bomb may help win that year’s battle, the long-term impact on the e-commerce environment is devastating – its consequences are felt far beyond the immediate term and it takes years to clean up.
As the Black Friday/Cyber Monday retail phenomena has exploded in Australia, retailers with bricks and mortar presence have also joined the battle for their share of wallet, creating equally appealing sales and promotions led by high impact marketing and communications campaigns designed to drive footfall in store where Average Order Value’s and conversion rates may be higher and the lure of impulse purchases greater.
Like the atomic bomb, the outcome of all of this is mutually self-assured destruction. But hope is not lost for retailers. Over the past two-three years there has been some radical responses to the Black Friday/Cyber Monday period, born out of both business principles and turning the mass consumerism event into a force for good.
In 2016, an American outdoor retailer opted to shut up shop for the day, both online and across their network of 218 stores, turning this margin protecting move into a powerful communications campaign that inspired their customers to get out and enjoy the outdoors instead of frantically comparing prices. The media buzz and social following generated by their campaign produced enough awareness and goodwill to benefit sales in the remaining holiday period – they saw meaningful year-over-year growth – and reassured them to follow it up again the next year. For them, the benefits of remaining true to their customer proposition far outweighed the risks and it paid off.
Most inspiring, is adventure, apparel brand Patagonia who decided it would be a nice gesture to planet earth, to donate their entire global revenue (yep, not just a per cent of profit or their profit, but all its revenue) to a variety of environmental organisations. This astoundingly generous and thought-provoking response to a day of mass consumerism has earned them priceless brand equity, loyalty and mass global exposure.
Let’s face it, as much as you’d love to change the world, that most likely isn’t on the top of your strategic objectives. But, that doesn’t mean you need to find yourself in duress during the impending Black Friday/Cyber Monday discounting and low margin onslaught.
There’s a common theme among those who not just survive but thrive in this period: strategic planning. These businesses made their decisions not because they wanted to save the world, but because saving the world is part of their business.
Slash your prices (aggressively) and throw in some red, high impact advertising and you’ll ensure you’re at the sale party, like many others, but is this the smartest approach for your brand, margins and sustainability for the wider peak period? The key to thriving is finding how to use this period to promote your underlying strategic objectives and customer proposition.
Here’s some other considerations that might help pique your interest in thinking a little more creatively, tactically and sensibly and about the period:
Be present in the calm before the storm
Marketing budgets are often ramped up and unleashed in full force, during peak of the battle (24 -27 Nov), consider the importance of the customer research period (late October onwards) ensuring your products and brand is visible during this period.
Customers are thinking differently, so should you.
Metrics and KPI’s go wild during this period but don’t be misled by some of your results. Many shoppers during this period may be ‘one off’ mission shoppers/bargain hunters – update your ROI targets / expectations of customers acquired during the period.
Don’t get lost in the sea of red (or black)
Creativity in both promotions and marketing seems to shrink at the same rate as margins. Strong creative ideas around what your black Friday/Cyber Monday offering is, communicated well in the right environments will help cut through the noise.
Protect some product
Don’t let customers ravage all your most desirable product at a lower margin. Think about engineering or acquiring some specialist products to serve up during the maelstrom and consider curating Black Friday/Cyber Monday environments so it’s clear what’s included and what’s full price and why.
Gentleman and gentlewomen, start your engines
Consumers have pockets full of change and it’s burning. Traffic and propensity to purchase is at its peak, you need a detail plan for the period and every department needs a readiness plan, high alert and ready to respond to any issues with haste.
Even Apple get involved in Black Friday/Cyber Monday but inspired by those famous words consider carefully your strategy, what your customers seek outside of just prices and how your business can do something incredible.
It can be scary to change your normal approach to this period, but you put a lot more of your business at risk by not going in prepared with a strategy that aligns with your objectives. There is still time to prepare the right strategy for this year’s peak holiday trading period.