15 November 2018 | MOF Team
In this article, Matter Of Form asks why Black Friday is struggling to keep apace with transformations in the retail sector. It will assess how retailers can set themselves apart in the Black Friday battleground increasingly headlined by Amazon.
Black Friday has long been a focal point of retailer’s calendars, offering incredible promotional sales and extensive brand awareness.
But, the significance of the 24-hour retail bonanza is somewhat dwindling. In what has become an arms race of price slashing in the weeks before Thanksgiving, the day has stretched to a whole season of sales. Retailers are neglecting in-store experience as they attempt to compete with the dominance of Amazonian eCommerce channels and brand values are being forgotten in the face of rampant consumerism. Despite the overwhelming potential of Black Friday, the day could be nearing self-destruction.
This article will suggest how brands can capitalise on new visions of retail to ensure maximum returns this shopping season.
Black Friday is being diluted by the plethora of sales taking place weeks before and after Thanksgiving. One day shopping sprees are no longer synonymous to Black Friday with the rise of Amazon Prime Day and Alibaba’s Singles Day last Sunday (which raked in more cash than Black Friday and Cyber Monday combined).
So, at a time of mini shopping frenzies all year round, what can businesses do in order to make sales and garner new customers on Black Friday?
According to Retail Dive, retailers must host ‘special events’ targeting superconsumers. This will bolster their customer relationship management systems and enable them to innovate their own special 'Black Fridays’ comparable to Amazon’s Prime Day and Alibaba’s Singles Day.
One such example could be to cater to your highest spenders. Nordstrom is offering private dinners with designers for their 'icon' shoppers and Nike's new flagship store in New York City will have a members-only floor with exclusive products and personal shoppers.
A simple but sure way to stand out from the crowd is by simply having the right product in front of the customer at the right time, especially when traffic to online retailers is up by 220% on Black Friday. Harnessing developments in big data and AI will ensure a seamlessly managed inventory and personalised distribution, and a memorable shopping experience.
In 2017, for example, fashion retailer River Island attributed an 82% in Black Friday sales to a campaign driven by real-time sales data which allowed them to use a live dashboard to optimize their keyword strategy as the discount period played out.
There's no denying that the rapid growth of eCommerce has transformed Black Friday over the last twenty years.
Big box retailers such as Amazon and Alibaba have lead the way in offering top-level purchase convenience. In store purchase is no longer a necessity, evident in the 4% decline in people visiting stores on Thanksgiving and Black Friday.
Nevertheless, the store will endure as a key sales channel. A study by the International Council of Shopping Centres indicated physical stores increased web traffic by an average of 37%, and, similarly, closing a store decreases web traffic to a retailer’s site. Moreover, 77% of shoppers planning to buy online and pick-up in store expressed they were likely to spend additional money at that store or adjacent stores.
Speaking to Retail Dive, Adri Biran CEO of space rental firm Splacer explained;
"Brands have also realized that sometimes the social engagement generated from an interactive experience is more important than merchandise purchases in the moment."
Target has utilised this understanding in their approach to Black Friday: the store plans to launch thousands of ‘hours of joy’ across the US so children can test new toys. Similarly, Walmart are hosting in-store parties with free coffee and cookies.
“Create a welcoming experience and you can change opinions”, says Forbes.
Lastly, an obsession with profits has made a mockery of the shopping holiday. Farcical high street riots, trampling and live streamed fist-fights over 3D flat screens are symptomatic of capitalism gone wild, and is creating a level of disillusionment with Black Friday.
With consumer trust at all-time-low, it’s essential retailers stay true to core brand values. Rose Marcario, Patagonia’s CEO, wrote on the company’s blog that Patagonia will take the profits from all sales on Black Friday and donate them to “grassroots organizations working in local communities to protect our air, water and soil for future generations.”
Not only does this validate the company’s values with clear action, but ensures employees feel proud of the movement Patagonia is creating surrounding Black Friday.
Similarly, REI has gone as far as to close its stores on Black Friday as part of an effort to encourage people to spend the day outdoors. "We've stayed healthy partly because we've stuck with our core values — like giving our employees time to do what they love with the people they love during the holidays," comments REI’s CEO, Jerry Strizke to Retail Dive.
Stritzke's theory is that Americans are seeking "something more" than a simple deal when they shop. Instead, customers are seeking connection. If they identify with a company's values, customers reward that company with their loyalty.
It’s evidently paying off. In 2015, the first year the company closed for Black Friday, REI posted its largest-ever membership growth, and it increased revenue by 9.3% to $2.4 billion.
Forbes commented, “It’s taking Black Friday and turning it into something bigger and more important than a big sales event. There is nothing wrong with making a profit, and these companies are doing so. Yet, in addition to making money, they are racking up points with both customers and employees, as they showcase their culture and demonstrate what they believe to be important.”
There is a new paradigm for shoppers and retailers. Whilst the significance of Black Friday is certainly diluting with sales extending well before and after Thanksgiving, embracing new perceptions of retail will set brands apart.
Segmentation of consumers offers opportunity for brands to host targeted in-store experiences and build positive brand awareness. Moreover, as sustainability and wellness become central tenets of millennial lifestyles, retailers can inject new meaning into Black Friday. An honest, open approach aligned to brand values has served companies well, even if that means closing the store on one of the busiest days of the year.