Black Friday sales may have come online in recent years, but the consumer sentiment has still prevailed that the best deals are reserved for those who camp out on the sidewalk or make a trip to a store.
The pandemic has upturned this notion, however, and most retailers like Target, Walmart, and Best Buy have already declared that stores will remain closed on Thanksgiving in an attempt to avoid risky crowds — moving the Black Friday season more solidly into online territory.
While the outlook for eCommerce this Black Friday seems bright, digital brands are still bracing themselves for the unknown. We interviewed eCommerce experts and surveyed approximately 400 digital brands in the Yotpo community to determine what businesses can expect from the 2020 Black Friday and Cyber Monday season.
Say hello to Cyber November and early holiday shopping
Black Friday has slowly been morphing into a multi-day affair, helpfully prodded by Amazon’s month-long online sales. This year though should firmly put an end to the chaotic optics of in-store shopping mania.
Not only are major retailers closing their physical doors on Thanksgiving, but many have announced earlier promotions this year. Target will be “stretching out the savings” to make shopping safer and more convenient, while Macy’s is starting deals right after Halloween. We expect many retailers to follow suit, especially as Amazon has pushed its Prime Day event to October.
According to a Salesforce prediction, holiday demand will be pulled earlier in the shopping season, not only due to the halo effect from Prime Day deals, but also because of consumers’ concerns about personal safety, delivery delays, and product availability. We expect retailers and brands to push holiday promotions and deals more heavily during this time to leverage the buzz and excitement.
“Our research showed that 51% of retailers and brands did a promotion during Prime Day last July,” says Rob Garf, VP of Strategy and Insights at Salesforce. “We anticipate that 10% of holiday sales will be pulled into October this season due to the manufactured shopping event. Marketers should not sit on the sideline during Prime Day this year”
Brands are optimistic about sales
Considering the immense growth that eCommerce has experienced in 2020, it’s no surprise that digital brands are generally optimistic about sales during Black Friday. About 42% of our surveyed brands felt their business would perform better this Black Friday than previous Black Fridays, demonstrating an overall positive sentiment going into the holiday.
But they’re being cautious with Black Friday inventory
Despite the positive outlook for digital brands, there is still some wariness that comes with Black Friday 2020. While sales may be high, brands don’t know how high — and that can have serious repercussions on inventory.
Lillian Tung, Co-founder and CMO of Fur, said during a recent AWIE Online event that her team is planning the same efforts and inventory as previous years. “Depending on one week of sales we either have 12 months of inventory on hand, 12 weeks of inventory on hand, or 12 days of inventory on hand,” Tung said. “It fluctuates by the day which is incredibly stressful from a founder and cash perspective.”
This may be why 69% of our surveyed brands said their Black Friday campaign plans have not changed due to COVID, despite the promise of eCommerce growth.
“If 2020 has taught us anything, we just don’t know what’s around the corner,” says Melanie Travis, Founder and CEO of Andie. “We are taking a cautious approach to inventory buying for the rest of the year given that. While Black Friday/Cyber Monday has the potential to be enormous, we would just prefer not to be over inventoried, as a safety measure.”
Brands will shift promotions to focus on surging products
Inventory considerations aren’t just limited to quantity. Some brands have shifted their product focus going into Black Friday and the holiday season based on trending interests during COVID. For example, clothing manufacturer Kellwood Apparel noticed that their core products, like denim jeans from their Democracy Clothing line, were experiencing increased interest.
“Based on Democracy’s analytics, we have adjusted our assortment for Thanksgiving through Cyber Monday,” says Rose Olson-Jannuzzi, eCommerce & Digital Leader at Kellwood Apparel. “And, we updated our promotional strategy to align with the changes in demand by product category.”
Consumer interests will continue to be impacted by the pandemic, and brands should lean into the products that are performing the best in order to drum up excitement during the shopping bonanza.
Brands will reach new audiences through partnerships
For many eCommerce businesses, Black Friday is an opportunity for prospecting. According to Nik Sharma, CEO of Sharma Brands, the latest trend in reaching new audiences is through strategic partnerships.
“This year I’m seeing a lot of brands start to partner up with other brands that have the same target customer,” Sharma says. “It’s an opportunity to cross-sell or build audience and awareness, without spending too much to do so.”
Sharma believes the lowest hanging fruit for brands this Black Friday will be to cross-sell to a partner’s audience, or include partner products in their holiday offerings. The latter can act as a value add for shoppers that also exposes them to new brands.
Deep discounts will be balanced by high AOV
Not all brands want to push major discounts during Black Friday. But brands with product offerings that are well-suited to high volume purchases are more likely to offer eye-catching discounts this year.
“Black Friday is a time for high-volume orders,” explains Sharma, “and a lot of brands will put together steeper discounts with lower margins but selling at a much higher volume. For example, an energy drink brand might sell 12 cases at 50% off instead of three cases at 20% off. The discount is high, but so is the AOV, and they’re playing the volume game.”
Shopping continues to go mobile
It’s unsurprising to learn that mobile usage has increased considerably during the pandemic. According to a Yotpo consumer survey, time spent on mobile phones increased by 30%, and approximately 72% of online consumers are using mobile devices to shop. This will continue into the Black Friday season, making it more relevant than ever for brands to consider mobile-first experiences when building campaigns.
More stores will offer click and collect
In Shopify’s May financial report, the eCommerce platform highlighted the rise of BOPIS: Buy online, pickup in store. Only 2% of Shopify merchants were using this feature before the pandemic, but within a matter of weeks that number grew to a staggering 26%.
Click and collect is an essential offering for brands with a physical presence, especially during Black Friday. Macy’s announced that curbside pickup would be “huge for this holiday season,” while a variety of smaller retailers are dabbling with “parking lot popups.” Any brand with a physical location should consider offering curbside pickup this Black Friday to make shoppers feel comfortable, while still giving them the option of immediate access to goods.
Standing out from the crowd will be key
Black Friday and the holiday season is always a fight for consumer attention, but now that the major players are fully online, everything is at the shopper’s fingertips. eCommerce brands will need to find strategic ways to stand out from the competition and create a sense of urgency that matches the demand of the holiday. Here are some key areas that brands will be paying particular attention to this Black Friday.
Investing in search early in the season
While impulse and discovery are major pillars for Black Friday, it’s often a day for mission-driven shopping, especially with the holidays around the corner. Consumers have something they want, and they’re in pursuit of the best options. Search will heavily drive these shoppers, both in terms of early research and day-of browsing.
As Black Friday and holiday shopping creep earlier this year, brands will need to tease customers in advance of their promotions to capture early researchers. They should also ensure that their Google Shopping presence is buttoned up with glowing user reviews and ratings to stand out from the pack.
Taking advantage of lower cost ads
Despite the increase in online viewers during the pandemic, CPM prices for paid ads across channels have actually plummeted. Many businesses have pulled back their advertising spend because of COVID, which has resulted in lower costs for brands that can afford it. It seems probable that we’ll see lower than usual costs for Black Friday digital ads, allowing brands to get more value for their money.
Avoiding competing on price
While a race to the bottom on pricing isn’t as relevant for direct-to-consumer brands, it still holds that digital brands should go beyond basic discounts this Black Friday; discounts are easy, and every brand will have them.
Exclusive access and rare promotions on tentpole products can do more to drum up excitement than a flat sitewide discount. Brands that have star products that are well-reviewed and beloved by shoppers should use them as a carrot during Black Friday.
Creating a sense of urgency
Retailers love to push the in-store Black Friday experience because it’s incredibly effective at creating a sense of urgency and motivating shoppers with the fear of missing out. Some of that urgency has been replicated online by Amazon and others by staggering the release of deals and including visual triggers like countdown clocks.
These tactics will continue this year, and we expect some stores to get even more creative to rise above the noise. SMS marketing is a growing channel for eCommerce marketers, and by nature it aligns extremely well with the needs of Black Friday. On average, text messages from brands have a 98% open rate and 90% of messages are opened within three minutes. We expect digital brands to use SMS this Black Friday as a tool to trigger shoppers with time sensitive promotions.
Creating a post-purchase experience that resonates
Customers who are making multiple purchases online are going to be bombarded with communication from a variety of businesses. Brands that are prospecting during Black Friday will need to cut through the noise in order to turn one-time buyers into repeat customers.
“The post purchase experience is going to be really critical this year,” Sharma says. “Brands need to provide something that customers actually want to see, not just general brand stuff. It could be as simple as following up with a great email, or introducing a loyalty program that gamifies additional purchases.”
Meaningful connections with customers will be crucial
While eCommerce will be hot this Black Friday, brands are unsure of how consumers will feel about the mega shopping holiday given the current state of affairs. This was reflected in our survey, where brands seemed split on judging consumer interest; 42% of brands felt that there will be higher consumer interest in Black Friday this year, 28% thought interest would be lower, and 29% thought it would not be impacted at all.
Lillian Tung from Fur emphasized that brands should be focused on campaigns that resonate emotionally this year. “Focusing on the care aspect of it will be a big thing for us,” Tung said. “There’s going to be more tied to the emotion, thinking about positivity, and taking the time to [reflect on] what’s been a challenging year.”
According to Sharma, another way to respond to potentially weary customer sentiment is to focus on products that people would want to buy no matter what. Rather than creating special products for the holiday, brands can just make it more convenient to purchase the things they truly want.
Regardless of how brands prepare for Black Friday this year, there’s no doubt that eCommerce will be huge.