November is home to a new holiday.
Black Friday is the unofficial festival of shopping which falls the day after Thanksgiving. Its name refers to the fact that retail businesses move ‘into the black’ (profit) on this day.
Originally an American phenomenon, in recent years Black Friday has spread throughout Europe and the wider world, with Canada, Mexico, Australia, China, Japan, Russia and India all in on the act.
And even countries that don’t experience Black Friday can expect to see spikes in trade over a few special days a year. These moments of increased demand are simultaneously an opportunity and a threat for retailers.
In this blog post, I’m going to look at what makes Black Friday so important – and how retailers can take advantage of the opportunity it affords.
A growing global trend
Black Friday, and the accompanying Cyber Monday, is a pivotal moment for retail businesses, because it’s a huge sales opportunity. During this shop-a-thon weekend consumers are not just browsing, they are buying. Retailers see their store traffic declines stabilize, conversion rates improve, while their online scores big.
Last year, for example, a total of £1.4bn was spent on online sales in the UK on Black Friday – an increase of 11.7%. And Black Friday spending across Europe is growing. In 2017 in Germany, sales rose to €6.5bn and France, where Black Friday brought in €5.3bn. And this is not to forget the Nordic countries, where Black Friday sales have increased by 187% since 2013.
But as much as it’s a moment to seize sales, it’s also time to protect your brand.
Customer expectations remain high, even in times of heavy demand like Black Friday. If you can’t cope with the increased number of orders, if purchased items aren’t despatched on time, or if your website keeps crashing, it will impact the way customers see your business.
The right retail technology can enable you to succeed during Black Friday, by providing you with the agility and flexibility you need to cope with a sudden rush of buyers.
There are some inspirational examples of retailers who have taken Black Friday as a chance to showcase their customer service capabilities.
Some of these big successes include Amazon, John Lewis and H&M. Their consistent pricing strategies, speed of delivery and tech capability under pressure have created a strong level of customer service which leaves customers keen to come back year after year.
These retailers, different as they are, all have one thing in common. When it comes to Black Friday, they made sure to prepare, and get the right infrastructure in place.
A successful Black Friday starts in the cloud
Preparation for Black Friday is crucial. And this starts with one very important technology: the cloud.
Cloud delivers scalability, so that your business can meet demand peaks during seasonal cycles or short events like Black Friday.
It also enables you to run your business at a lower operating cost, while improving the e-commerce user experience that plays such a vital part in Black Friday. This means preventing sites from crashing and ensuring that pricing and stock level information is consistent across all stores so that every customer gets a fair deal.
But being able to respond to business with speed and control is just one piece of the puzzle: you also need to know your customer. Using the cloud as a foundation to collect data about your in-store, mobile and online customers will enable you to provide a more personalised experience for every individual across sales channels.
This is the very essence of good service – and it will result in improved customer loyalty in the months after Black Friday.
And you can’t neglect the physical shop floor in all of this. Retailers must think about how they operate when the shop floor is crowded. How can you reduce queuing at tills, prevent theft, stop out-of-stock, and ensure non-stop delivery of promotional messages on interactive displays? Digital store IoT will prove vital here, supported by the cloud.
Fast and reliable payment systems are vital. Customers want to get in and out of stores quickly, so that they can move on and make the most of sales in other stores. And the best foundation for these kind of payments systems is the cloud.
Top tips for a better Black Friday
As Black Friday becomes a bigger and bigger part of the sales cycle, it’s increasingly important to make the most of it.
So here are three steps to help you seize the Black Friday opportunity.
- Be insights led – If you pay attention to your customers’ behaviour over Black Friday, including their choices, preferences and delivery details, you can use this information to create a more personalised experience for that customer next time they shop, and be even more prepared for Black Friday next year.
- Consistency is key – Black Friday is a multi-channel event. Customers look online and visit stores in person – the savviest will even do a mixture of the two. You need to ensure your pricing is consistent online and off-line and avoid promising a customer an item which has already sold out. If you don’t join the dots between your online and in-store business, you won’t be able to keep customer promises across all channels – and the impact on customer experience and sales will be noticeable.
- Don’t forget the supply chain – Customer delivery expectations are high and ever increasing thanks to the influence of big retail giants. Black Friday is the manifestation of this phenomenon: people who buy things during this period are looking for an indulgence, and they want it quickly. Efficient supply chain management is crucial if you’re going to be able to get products to your customers on time. New technologies like artificial intelligence (AI) and RFID tagging will be valuable for this task, since they provide detailed real-time insight into the whereabouts of your stock at anytime, anywhere.
All these come into play for Black Friday – or, in fact, any time that sales are on.
Black Friday is a chance for retailers to secure sales and customer loyalty. In this way, it represents an immense opportunity for today’s businesses.
As retailers become more intelligent and technologically capable, we can expect to see more innovation and invention in the way they approach Black Friday. They will start to run their own Black Friday-esque events, something Amazon has already started doing with its Prime Days.
But for now, it’s crucial that retailers carry out the basic elements – effective sales, delivery and service – at times of such high demand.
In order to do this, they will have to start preparing effectively, by taking the journey towards Black Friday before Black Friday.
Those that can achieve this promise to build their brand for this year and beyond.