Next week we will enter the next wave of shopping extravaganza with the US grown Black Friday and Cyber Monday taking centre stage. Most retailers will extend their events across the weekend and even until Tuesday creating a 4/5 day shopping frenzy. Most retailers will participate in these events both in-store and online, thereby offering a well rounded experience to customers who pre-empt store bought purchases amidst the frenzy.
So what impact are these events having on our customer shopping habits?
The reality is these events are having an enormous effect on how we shop, considering the vast majority of retailers now take part in these events. Traditionally, December has been the peak of the retail season, with last minute purchases driving sales the Saturday before Christmas and post Christmas savings prompting customers to queue outside stores on boxing day.
Black Friday weekend shopping events have created a significant shift in traditional shopping with Inside Retail reporting; “This will be the third consecutive year in Australia where online sales drive November into position as the highest dollar and volume sales month of the year.”
The popularity of these events is propelled by the level of discounts offered across the globe. According to US site The Balance, discount levels increase to 37% off during the shopping weekend in the US. The discounts levels are more aggressive here in Australia with Black Friday Global reporting that, “the average discount will be 53% off in 2018.” This high level of discount will have a knock-on effect into December and is no doubt driven by retailers wanting to compete with Amazon as who will take part in their first Australian Black Friday weekend event.
Despite the impacts already seen, Black Friday is relatively new in Australia; these events are expected to continue to grow from the +39% growth reported in 2017 by Inside Retail, with 57% of Australians expected to shop Black Friday 2018 according to research from Black Friday Global.
The weekend of shopping is good news for eager customers, but a growing concern for retailers as they eat into full price sales pulled forward from December and continue to educate customers not to purchase full price. Those retailers who take a stand and do not participate, risk being perceived as expensive or uncompetitive losing out on vital sales and risk end of season stock issues.
Black Friday and Cyber Monday have impacted traditional Christmas and are now too big for retailers not to clearly strategise their involvement. Retailers need to plan and work these events into their overall margin expectations for the year, understanding how the early discounting is going to impact margin and how they can offset this throughout the remaining weeks leading up to Christmas.
So, what is this telling us about the future of Christmas selling period?
Retailers again will be challenged to move with the fast pace of customer preferences and ensure they dive into the data of the Black Friday weekend, taking the lessons of 2018 to form robust strategies for 2019. December will continue to disappoint, and as more and more customers shop early, retailers need to find innovative ways to delight their customers focusing on service, experience and convenience.
Building a strong emotional connection with customers across multiple channels during the Christmas period will become crucial in taking customers’ attention away from price, inspiring them to step away from their screens and into stores, thereby opening the door for add-on sales.
In stores, retailers need to evolve, bringing the joy of giving to the front of their customers’ minds and igniting the magic of Christmas. Staff will continue to be a crucial; excellent product knowledge, timely assistance with items customers have researched online, advice with product selection, and most importantly, staff ready to collect payment will be key priorities. Convenience will continue to be top of mind for customers and so retailers will need to push the boundaries of convenience offering more and simpler ways to browse and purchase in-store and online.
Influences on customer shopping habits have moved from local to global, as we enjoy the shopping frenzy leading into the festive season and continue to be amazed by the figures of Singles Day 2018. With such fast paced changes globally, we encourage retailers to consider; what will November/December shopping look like next year?