Black Friday is dead – long live delightful customer experiences

Holiday Shopping Day Sales

Traditionally, Black Friday is the start of the holiday shopping season – a landmark to jump start the busiest buying time of the year. But with more screens and devices, increased consumer expectations and more competition between retailers driving earlier and earlier sales, retailers should call time of death on this out-of-date tradition.

This year, the National Retail Federation (NRF) estimates that overall traffic for Black Friday was down 3.6 percent from last year’s traffic. While comScore data (also shown above) shows online sales are up, that in-store traffic slump amounts to nearly $7 billion less spent over the holiday shopping weekend this year versus last year.

Yet despite this slump, NRF projected a total 4.1 percent growth in overall holiday shopping this year. Taken together, these facts suggest that holiday shopping isn’t slowing down, but rather shifting away from traditional holiday door-busters to instead reward retailers with more well-rounded plans.

 

Retailers are taking the punch out of Black Friday

Retail deals site DealNews reported that Thanksgiving day had 30 percent more Editor’s Choice deals (sales that offered all-time price lows or best-of-the-year discount) than Black Friday for the second year in a row. Similarly, Adobe reported that online shopping on Thanksgiving (or ‘Grey Thursday’) instead of Black Friday yielded average savings of 24 percent.

By offering bigger discounts at earlier times, retailers are competing to get to holiday budgets before each other and, as a result, Black Friday is less important.

Google saw this reflected in search trends as well – with “a shift away from “tentpole” events such as Black Friday” but earlier searches for terms around Black Friday associated with deals:

Black Friday Searches - Google

 

Via Google.

This year, deals started rolling out as early as the first Saturday after Halloween – now dubbed “Orange Saturday” – marking a potential new start of the season. Store traffic and revenue are projected to steadily continue and spike on Super Saturday – the last Saturday before Christmas.

 

Consumers are moving out of stores, off of devices and into multi-screen shopping experiences

As Black Friday falls by the wayside, so does its more tech-savvy iteration Cyber Monday – but not because users are moving offline or off-devices.

First written about in 2005, Cyber Monday started when workers returned to offices on the Monday after Thanksgiving and continued shopping while taking advantage of their business’s better Internet connectivity. Since 70 percent of Americans now have high-speed Internet at home, the factors that led to Cyber Monday are no longer relevant and shoppers are behaving differently.

Tracking online sales on holiday shopping days, IBM found that online traffic on Cyber Monday is highest between 5:30 and 8 p.m., meaning after work hours.

cm-report-graph-2014

 

Via IBM.

In the same report, IBM also found that 41.2 percent of all online traffic was mobile, up 30.1 percent over 2013, amounted to 22 percent of total Cyber Monday online sales, also an increase. This is consistent with estimates that between 30 and 50 percent of e-commerce traffic comes from a mobile device.

But more than just shopping and exploring products on devices, shoppers are moving between mobile, web and in-store in seamless but meaningful ways. Research from Google in 2012 found that 90 percent of shoppers moved from one device to another during a purchase process. Today, nearly 50 percent of 25–34-year-olds use their phone to shop online while standing in line at a store.

Consumers already view purchasing as a multi-screen experience, which makes dedicated deal days for different purchase behaviors, like online versus in store, irrelevant.

 

Retailers can build on success and remix the parts of Black Friday that work

While Black Friday as we knew it may be on the decline, the importance of the holiday shopping season for commerce is here to stay. To better drive sales in the future, retailers can build on what works with current shopping holidays but adjust to emerging shopping behaviors.

 

Instead of broad trends, target segments based on unique behaviors

Black Friday and Cyber Monday were built on the knowledge that consumers need holiday gifts, employers have high-speed internet, etc. Today’s marketers have the luxury to tap into big data to drive targeted, personalized holiday offers rather than directing marketing initiatives based on broad-sweeping trends.

Instead of thinking about when a customer might go online versus in-store, think about the different jobs that different devices fill in the sales process. For example, customers turn to cell phones to improve in-store shopping (by finding the store or storing a coupon) once they’ve decided on a purchase. Tablets, on the other hand, fill the job of research ahead of a purchase decision:

Mobile Shopping Activity from Nielson

Via Nielson.

Customers are turning to mobile to simplify their purchase process more and more – 30 percent of revenue on Black Friday came from mobile, a nearly 50 percent jump over last year. For Cyber Monday, mobile held 41 percent share of traffic.

Customers are turning to mobile devices to fill specific niche roles within the sales process, and by considering how these jobs fit into the path to purchase, marketers can improve the customer experience and drive more sales.

Email traffic has largely shifted to mobile, so device usage should also be a consideration for the tried-and-true email offer. Email continues to do the job of informing customers about deals and offers, but marketers may be missing out on additional revenue by not optimizing what offer they send when to the device customers are accessing at that time of day:

eMarketer research on email timingVia eMarketer.

Taken together, marketers can consider these shopping and email trends to send relevant offers at particular times of day, rather than general offers on certain days of year.

Specifically, customers may find mobile-optimized email offer with coupons useful during commute times while ‘gift-guide’ type emails may work better during work hours or later in the evening, when they’re viewing on their desktop or tablet.

 

Give customers incentives, but don’t limit yourself to discounts

As retailers battle each other to send out the biggest discount the earliest – often not publicizing all of their deals so they can undercut competitors at the last minute – they are limiting themselves to competing only on price. Deals increase the motivation for shopping, but competing on price ignores what’s unique about a brand.

Apple, for example, offered customers an extra gift card rather than slashing prices, giving a higher value product rather than devaluing their existing product. Since Apple customers are buying into a high-performance brand, a deal that increases value makes more sense.

Outside of monetary value, retailers can add value in the form of utility – helping customers more easily find the product they’re looking for, discover related products or even save on bundled products. By analysing what different customers buy and even looking at what products customers buy together, retailers can send more relevant offers rather than blindly hoping a lower price will be relevant.

At the same time, non-profits and charities are leveraging Giving Tuesday, their own holiday day, to get donors to spend more by tying it into a bigger, united movement on the day. Rather than offering gifts, which can cheapen the giving process in the same way discounts cheapen goods, they are using the day as a rallying cry, proving the added value of unity.

 

Conclusion: win the holiday shopping season by knowing your customer

Ultimately, Black Friday is dwindling because it has stopped being a useful tool for customers and retailers alike. By leveraging data to drive holiday marketing initiatives, retailers can build new and relevant holiday shopping experiences.

Today, you’ll find everything from wine to cars on sale on Black Friday, but luxury retailers treat the day a bit differently.  Where most big box and low-end retailers open on Thanksgiving and offer a plethora of dirt-cheap deals, luxury retailers will open at a reasonable hour and offer a sprinkling of deals.

Luxury retailers are tailoring the holiday to their customers, and more retailers can adopt the same practice.  One game company even got customers to spend “$5 more” on Black Friday by knowing their customer.

With the right data, marketers can send relevant offers to customers and turn the holiday season from an onslaught of cheap deals to a season of helpful gift guides and meaningful purchases.

Background photo for featured image from Alan Carter via Flickr Creative Commons.

Challenge: Communicate an acquisition

A few months ago, I was interviewing with a company that challenged me to come up with a communications strategy for announcing a merger. This post includes all the deliverables I put together for them, which I’m posting publicly thinking they might be helpful to someone else.

They challenged me to communicate an acquisition:

A medium-sized tech company is acquiring a smaller firm in the same industry. As the chief marketer for the company, how do you:

  1. Inform key stakeholders
  2. Maximize benefit for the acquiring company
  3. Explain changes to customers

 

I decided to focus on a fictional B2B content management company:

  • The acquiring company (ContentBox) is a B2B content management platform focused on local retailers across a wide variety of verticals. The product includes extensive analytics features out-of-the-box and a huge variety of templates.
  • It is acquiring a video player and analytics platform (VidMedia) to integrate into the existing system. VidMedia is primarily used by freelance or smaller production houses to host and share video content, similar to Vimeo or Wistia.
  • One key challenge in this transition is that a high percent of VidMedia customers do not currently also use ContentBox either because they are not interested in a more extensive CMS (40%) or they use a competitor (20%). Due to resource constraints, ContentBox has decided to keep the VidMedia player available but stop providing support or updating the tool after a 12-month transition period. Customers who use VidMedia but not ContentBox will see no changes for 3 months, then move to the ContentBox back-end interface for 6 months before the VidMedia stand-alone product is phased out at the end of 12 months. VidMedia has data on what CMS, if any, its customers use.
  • Within 3 months, ContentBox users will see new video features and analytics within their existing interface. They will not see any further changes.
  • Communication plans have already been determined for internal stakeholders (investors, employees at both companies) and what’s left now is to determine how to communicate to external stakeholders – existing customers of both companies, industry press and other influencers for potential customers.

 

Here’s what I’d do:

Download (PDF, 4.6MB)

 

This document includes both the overall marketing strategy and the transition plan, as well as a few work samples created for this challenge.