Global CSO Damian Blackden gives us the lowdown on Black Friday, the American retail discount phenomenon that's going international.
Everyone loves a bargain. Globalisation, e-commerce, social communication and product reviews have all made the retail business more cut throat than ever.
As the market moves closer and closer to a state of perfect information, price has unsurprisingly become an increasingly important trigger for grabbing share and stimulating sales.
The concept of Black Friday isn’t new. In fact it was first mentioned as a post Thanksgiving shopping day as early as 1961, but it wasn’t until this century that it was regarded as the starting gun in the run up to Christmas, characterised by short term 20-30% discounts and beyond.
Total sales in the US have fluctuated between $50bn and $60bn over the last four years, but the average amount spent per person has remained consistent at around the $400 mark.
The retailers’ strategy to limit the number of reduced priced goods has had a direct effect on consumer behaviour. We’ve all seen chaos in the high street and on the news as ugly scenes play out in the aisles. Black Friday is therefore only for the brave and the committed.
This has meant that many consumers have taken to camping out to ensure they get first crack at the spoils, and a surprising 23% of all Black Friday shoppers in the US chose to sleep in the street the day before the sales in 2014.
Meanwhile retailers are in an ongoing battle re opening times, with many now starting to trade as early as Thanksgiving Day evening if legally permitted.
But it’s not just about physical store sales. Cyber Monday has been a reality for the last decade, and is traditionally seen as the Monday following Black Friday when many exceptional deals are offered by online retailers.
E-commerce and mobile in particular are unsurprisingly becoming more significant. Last year 27.9% of all online sales during the Black Friday period were on mobile devices, which represented a 28% YoY increase.
And consumers are becoming more sophisticated in the way that they engage with retailers. In the UK, where Black Friday has been a cultural norm for over five years, John Lewis reported that two thirds of its customers buy via physical and online channels, a figure that rose by 9% over the last 12 months.
No wonder that bricks and mortar stores, such as Argos are offering ‘click and collect’ facilities to e-commerce players. Or that Amazon recently opened its first physical store in Seattle a few days ago, whilst simultaneously pushing its Prime service which offers delivery within staggeringly short timeframes so that consumers can get their hands on the booty nearly as quickly as if they went into town.
Globalisation has meant that Black Friday, like many US customs has spread far and wide, in particular to Canada, Mexico, India, France and the UK. And given that so many sales happen across the planet in such a contained period, Black Friday has become a peak within a peak time for many worldwide retailers.
At Maxus we often use a wide range of online activities to target and amplify the promotional messages that are designed to maximise our clients’ sales and market share.
Last year for example we managed over 90 different audience segments for one retailer alone, with each carefully defined group receiving multiple individualised Black Friday specific advertising.
And another top 3 global technology manufacturer and retailer was continuously managed in shifts over 24 hours across the world, with the Maxus EMEA teams alone making over 15,000 ad copy and bid changes on a single day.
It’s therefore clear that the pace at which our world moves is getting faster, and our business is polarising. So there’s little doubt that Black Friday and Cyber Monday will scale significantly further, whilst competition and sophistication of marcoms strategies will intensify.