Black Friday will soon be upon us (26th November 2021) – and that means flash sales, the promise of low prices and if previous years are anything to go by stampedes at checkouts at dawn.
Vertical Plus has been participating in Black Friday since the concept first took hold in the UK in 2013. It is traditionally a day that sees higher conversion rates, higher visitor numbers and therefore higher sales on a wide range of brands, as by the time it arrives consumers are pretty much expecting to find large discounts and deals all over the high street and online. Whether you agree with it or not, the lack of any Black Friday deals will normally hurt on that day as consumers quickly bounce to sites that have deals.
Black Friday started as an American sales tradition in the 1960s as a way of persuading the American public to go out and spend money following Thanksgiving and preceding Christmas. In America, it is the busiest shopping day of the year as Americans flood to stores trying to find the best deals. Stores typically open in the early hours of the morning, or sometimes as early as midnight. It is not unheard of that keen shoppers camp outside their favourite stores in order to get the best deals, and before products sell out.
Black Friday has been running as a concept in the UK since 2010 but in those early years it’s something only Amazon or Ebay customers would have noticed. Even then we did run some Black Friday campaigns on those channels for our early retail pioneers but as the concept was pretty unknown the impact was rather small. But by 2013 a number of significant retailers decided to go large on the event and it snowballed. We were seeing conversion and sales figures on key stores almost treble in size on that day alone – and where we ran midnight events we saw more sales in the hour between midnight and 1am than we had seen for the whole of October. On the high street there was widespread coverage of crowds scuffling to buy TVs at midnight as the online increases were matched with high street shoppers seeking offers through the tills.
This trend continued into 2014, 2015 and 2016 but some high street retailers, such as Asda, started to cancel the event saying customer feedback indicated they preferred offers to be spread over a longer period of time and given in a less riotous way. Since then Black Friday has significantly declined as an event for high street shoppers – and it was put to death at Christmas 2019 when high street stores employed armies of staff and security officers to face crowds that never arrived. Online shopping was widely cited as the reason for this – by then shoppers had realised they didn’t need to queue all night or fight with committed locals to grab a well priced TV – all they had to do was be in the right place at the right time – at home on a keyboard pressing refresh and grabbing the deals as they appeared on the screen.
This approach has pretty much set the standard in the UK now. Black Friday remains a key milestone in the Christmas calendar but good Christmas planning is more about longer term offers, discounts and pricing than it is about cramming everything into one day. Conversion rates at the end of November and into Christmas remain significantly high and online retailers can still use the event to optimise sales for those customers who still look forward to the event and are looking for special deals on the day.
If your business is planning to take part, then you will need an ecommerce strategy for your website in order to make the most of the event.
I think we can safely say that Black Friday no longer has the mad appeal it had in 2015. The psychology of rush sales like Black Friday is that customers believe that they need to be quick, that unless they are quick they could miss the boat and of course when it’s gone – it’s gone.
These days your ecommerce customer is much more sophisticated than that. They don’t really fall for rush sales or discounting tactics like they used to. Shopping from home gives them a chance to quietly research and consider their behaviour and compare prices.
So to make the most of Black Friday you need to work with this sort of consumer and understand how the modern, tech savvy customer operates.
At Vertical Plus we offer an 11 point online sales growth strategy. This strategy includes items like specific Black Friday campaigning but also includes more important building blocks that work well with the customer such as good product descriptions, photography, pricing, customer reviews, related products, appropriate multi-channel deployment, key links to your suppliers and brand reassurance.
So the following five Black Friday tips all assume you have all that right as well as a well designed website, a good multi channel strategy, a good supply chain and an informed knowledge of pricing, margins and yield. I would say that if you asked our ecommerce team what is the most important thing to get right at Christmas, they would never start with campaigning (and specifically Black Friday) as they know how important all the other elements are to a long term successful Christmas.
1) Campaigning
Campaigning is about letting your customers know that Black Friday is coming. It serves three purposes – reminding them that you exist (so you get on their shopping list), showing them in particular any existing products they can buy from you and then also telling them how they can benefit from discounts or offers on or around Black Friday.
At Vertical Plus our approach to campaigning forms part of our digital colleagues programme. A digital colleague is anyone who knows your business and communicates with it digitally. In old marketing speak this is classically called direct marketing – you are directly communicating messages with your customers. There are many ways and channels to do this online – through newsletters, through likes on Facebook, through followers on Twitter, TikTok or Instagram or even through marketplaces like Amazon and Ebay.
The more targeted and specific a direct marketing campaign is – the better the results. For example, generic newsletters generally have a pretty poor conversion rate. For an average online retailer the conversion rate of newsletter subscribers is about 1 sale for every 10000 customers. So every 10000 newsletter subscribers you will find only 1000 of them will ever even notice your emails and of them, only 100 will actually engage with them to click through to your website. Of those 100, if the offer is right, only 10 will buy. This means you need around 10000 newsletter subscribers to create 10 sales. For large companies this is a pretty decent way to generate income – especially if you can vary your offers and send out newsletters on a regular basis. But for smaller retailers with less than 1000 subscribers it’s not too uncommon for newsletters to generate zero sales.
Newsletter campaigns aren’t really all that different to social media campaigns. You are putting out messages to customers who are normally doing something else at the time of getting the message so the key is to grab their attention and try to persuade them to stop what they are doing and buy your products instead. Or put a seed in their head so that when they do go shopping they think of you. So the three golden rules of campaigning are:
Just because you have sent it to them doesn’t mean they read it. In fact most don’t. You are not that important in their lives. The key to campaigning is to recognise this and make yourself more important to them. I like to call this campaign magnetism. Only consider campaigns that catch the eye and are good enough to draw customers away from what they are doing. You could be wasting money on campaigns if they lack magnetism.
Only spend money on banners, ads, newsletters and social campaigns that catch on. Campaigning is generally about raising visitor numbers so at Vertical Plus we always track the effectiveness of everything that we do in terms of visitor numbers. The type of visitor is also important so we track their effectiveness in terms of sales generated. As we are a performance based business we will track the time spent on campaign creation, management, advertising fees and other activities against visitor numbers and sales. This way, we only spend time and money on the campaigns that work.
Don’t be distracted by campaigning. At Vertical Plus we generate around 98% of our revenue on partnerships on activities outside of direct campaigning. It looks good but if that is all you do then you are not focusing your time and effort in the right places.
2) Look after your loyal customers
What you discount and how you approach discount has a large effect on your customer loyalty and the impression of your brand. Every time you run a sale event or an offer you are saying to customers that they should potentially wait for the next sale or offer before buying from you. Even worse, you are saying to customers who have bought from you in the past that they potentially have been overcharged and they should have waited.
Always try to give better offers to loyal customers through loyalty programs or other customer driven offers and make them better than offers you would make to existing customers – especially if they are repeat purchases. We always find it important to communicate with existing customers through early Christmas campaign banners and newsletters to incentivise early sales and reward them for early engagement and loyalty.
3) Give appropriate rewards
If you are a brand leading company with a strong customer base and a small number of products you would approach Black Friday very differently compared to a company with lots of different products across a wide range of customers. Are you a Wilko type store selling a wide range of goods from gardening to light bulbs or are you a niche hats and scarves eco business looking to create a relationship with a small number of customers? If you sell a wide range of goods without a particular brand message then Black Friday is going to be about discounting and competitive price selling. If you sell a range of unique goods then Black Friday is going to be about giving customers at most a small gift to say thank you.
4) Create clever campaigns
Everyone will be promoting their business during Black Friday. Advertising space will be crowded, as everyone tries to get their names out there. Inboxes will be flooded, adspace will be expensive as demand surges, and brand’s social media activity will skyrocket. How will you stand out?
Make your email subject lines pop, use interesting, updated imagery to catch people’s attention, and make as much noise as possible on all your marketing channels. It’s not just about offering the lowest prices – it’s a battle for your customers’ attention. If they are looking for deals make sure they are good ones and ones that the customer will feel is worthwhile. Otherwise don’t bother – as poor deals can often be counter productive to your reputation and even to your bounce rate.
5) A better time to sell?
The Christmas 2021 supply chain could well be threatened this year – and for this reason you do not want to be thinking about getting rid of all your stock early – especially at huge discounts. We often find that by the end of the first week in December, for example, you can sell products at a really good margin as other retailers have gone out of stock.
There are many many opportunities to sell more around Christmas at higher margins – don’t discount and then go out of stock.
This really isn’t a case of having to get Black Friday right and all will follow. In fact you are better off holding onto your product margin and optimising your advertising campaigns to correspond with surges in demand over the whole 8 week period. Spend more time looking at products that are selling normally and optimising them. Review adwords expenditure regularly. Check supply chains of top selling products and get more of those in.
We hope you found our insights useful. If you’re stuck for strategy and need help, please do get in touch with us for an informal chat.