Christmas is getting closer. Soon there are Christmas lights everywhere. Mistletoes will decorate the houses, Christmas carols play on the radio, and altogether it creates this unique sentimental atmosphere. With it comes the holiday shopping madness named Black Friday and Cyber Monday.
Both are other events after Halloween, which found their way across the ocean and settled in Europe. Many European companies take part in it, fearing not to get a piece of the cake.
However, with all this hype and big anticipation, it brings up the question of whether to follow the stream or opt out.
“It’s the most wonderful time of the year” according to Andy Williams singing about Christmas. Indeed, it’s a beautiful period, where everything is about giving and sharing.
But let’s push these sentimental Christmas feelings aside for now. We bet, Andy Williams when creating this song in 1963, had not faced the commercialized Christmas we are dealing with nowadays.
Christmas season is more than just these nice emotions. What “giving” involves in our modern age, is a certain kind of pressure to find the right presents for family and friends. Some people spend hours on thinking what to buy for their loved ones, while others prefer the adrenalin kick by shopping one day before Christmas in packed stores.
And then there are the typical holiday shoppers. This type prepares itself already since the beginning of September for two of the most popular shopping days every year: Black Friday and Cyber Monday.
Have you ever wondered how these days emerged?
Back to the roots
Black Friday is not a usual friday. It is the friday after Thanksgiving which heralds the start of the holiday shopping season. Where the name comes from is still debated, since several events in the U.S. got called “Black Friday” in the past. Some theories claim it had its origin centuries ago in 1869.
Around 1950, policemen in Philadelphia used this term for the crowds and traffic jams in the city which came with the holiday shopping season, as to name an example. One of the most common explanations since the 1980s for the origin of the name “Black Friday” is retailers’ compensation of financial losses made during the year. Those were covered by the high amount of sales of the holiday period. As at this time red ink numbers were replaced with black ones, the name seems quite reasonable, right?
And Cyber Monday?
Cyber Monday appeared the first time in the year 2005. With the growing popularity of online shopping, the monday after Thanksgiving was the most successful sales day for online retailers. As they also wanted to get a share from the holiday shopper’s budgets, this marketing term was invented to persuade online shoppers to buy with discounts on this day.
Amazon was one of the first companies initiating Black Friday in Europe by promotion this day in 2010 for the first time in the UK. Meanwhile, it is a global phenomenon.
But what is all the fuss about those days?
Bargain hunters’ motives
Finding a deal is a powerful experience. By receiving a coupon, 63% of consumers would change their mind about an abandoned cart. 67% would be even willing to Like a Facebook page to receive a 25% discount or more.
However, it is more than only saving money and economic benefits. A lot of things are happening on a psychological level. In some perspective, it has something to do with “hunting and gathering” which goes far back to our evolution.
Still, shopping with discounts is also about emotions. 40% of shoppers feel smart when they make a bargain. It’s also a matter of pride and taking power as a customer away from the retailer. Further, regret plays a role. It is about being sure not to regret an early purchase with a small price reduction which could receive another discount a couple of weeks after.
Black Friday – A great opportunity?
This day meanwhile attained a status of being indispensable for shoppers. Especially the deal-hungry ones are already in great anticipation for this day to arrive. Some of them even willing to risk their lives in the panicking crowds storming in the early mornings into the shops.
On the one hand, Black Friday and the period until Cyber Monday can be a great opportunity for your business to attract some customers which are receptive to spending their holiday budget. Hence, there is the chance that prospects buy products which are not on discount since they would like to get their holiday shopping done.
The “downside” of Black Friday
On the other hand, especially when you are running a smaller company, it is hard to attain sales in the arena with big multinational brands that fall back on huge budgets.
Not to forget that you do not only compete with advertising budgets, but also with steep discounts offered by the big players. The line between providing excellent deals and being profitable at the same time is for small businesses (SMB) often very thin. Aggressive price slashing is one of these games an SMB can’t win.
From the inventory perspective, Black Friday is an event which can not be planned easily. The number of potential sales is hard to forecast. This confronts retailers with difficult inventory planning. Not to forget that sales increase equals a rise of order returns.
As the last thing to mention that highly discounted products may evoke the impression that they were prized to high before. Customers may not buy anymore during the year, as they are waiting until Black Friday to get the “real prize”. In other cases, they don’t like to purchase products for regular prizes anymore because they expect to receive coupons also during the year.
Which is your overall goal?
It’s necessary to consider the long-term value of Black Friday; if everything is about giving discounts in order to get a sales bump.
According to a customer survey about Black Friday from Periscope by McKinsey, only 5% of UK citizen indicate, that they expect to get inspiration or rather motivation through personalized discounts. Besides, 43% would welcome additional discount on top of general promotions. Almost the same percentage would also favor earlier access to Black Friday deals.
This is quite interesting and proves the impersonality of Black Friday. Hence, Black Friday is calling for a more customer-centered and personalised approach. Indeed, 79% of shoppers look for a deal in loyalty and reward programs.
Customer strategy left behind
It might seem like an amazing period to generate a high number of sales and also a less expensive way to acquire new customers. From a marketing point of view, it can destroy all effort put into your customer strategy.
The objective of every business is to create strong, long-lasting customer relationships. And above all, to maintain loyal customer which are a less price-sensitive.
During the Black Friday madness, it seems that the overall goal gets often forgotten, though. The strategy of companies joining the Black Friday as well as Cyber Monday often tends in giving promotions to stale merchandise. Most products are only available in small amounts why only a little number of people can benefit.
Unfortunately, those buyers are most of the time not the loyal customers you are looking for, but the ones who are in constant search of bargains. That leaves the essential question for customer loyalty strategy unanswered at this point.
Another counterproductive aspect of Black Friday is a weak or even harmful customer experience which works against your goals to provide excellent customer satisfaction. Due to a strong focus on sales and the simultaneous lack of a good customer shopping experience, the chance that they won’t return is particularly high.
Do your own thing!
We won’t lie to you, holiday shoppers expect discounts. But why are not starting your own campaign before the big Black Friday wave is coming?
Black Friday and Cyber Monday are days people buy on impulse. Rarely the product what you had in mind is on promotion. Almost 30% of Black Friday shoppers in the UK claimed in 2017 to not even have determined a budget but buying things they like.
That would mean that this share of shoppers does not have a specific brand in mind. Hence, they are not waiting for a particular product to be on discount. These indecisive buyers want to get inspiration from you on what to purchase. Here is where you can take over, and surprise them with your special offers. Moreover, as you are one of the first ones offering deals, prospects cannot compare discounts.
The number of companies opting out of Black Friday is increasing slowly. Some of them redefine it and spend for example money to charity for every acquired sale in this period. Others add a free promotional item to every regular purchase. Another idea is to collaborate with influencers to promote your deals, which helps you stand out the mass. To be different can get you ahead of your competitors.
Easy collection of customer data.
Even if you might generate not as many sales as your competitors, you can go out as a winner by collecting customer data. In order to gather data from the higher number of website visitors and thus feed your mailing list, you could run a contest and let them win several prizes. Furthermore, it’s a perfect way to receive consent under GDPR for future marketing mailings.
It’s not a question of if, but how!
Despite having no Thanksgiving tradition in Europe, Black Friday and Cyber Monday found their way to establish. They create pressure to provide steep discounts to customers and competing with popular brands.
We recommend not to ask yourself whether to take part or not, but rather to figure out how to take advantage of all the deal-seekers and transform them into loyal customers. Like above mentioned, there are many opportunities to create value for the customer AND your company. It’s significant that behind your actions stands a reasonable strategy.
For offering great deals, there is no Black Friday or Cyber Monday necessary. Don’t forget that you are the one to choose what promotions to provide in which period of the year – also right before Thanksgiving. You will have the advantage of being less vulnerable to price fights with big competitors since there are no other discounts to compare.
Nevertheless, you should not be completely unprepared when the official Christmas shopping season kicks off. In any case, you need to get your website ready for a higher number of visitors during these days. With all this shopping frenzy more the majority of people prefer to shop from home or on mobile.
And don’t forget, even with a poor sales performance, a good preparation and the right strategy can bring you valuable insights about your buyers. This can pay out in long-term for you.