Blog Post - John Beechen, Oct 19 2016

Making sense of the online shopping phenomenon, Black Friday

Making sense of the online shopping phenomenon, Black Friday

What can UK retailers learn from the major discount days around the world?

Retail Week recently approached John Beechen, Head of Managed Services at Salmon, a Wunderman Commerce Company, for his view of the online phenomenon that is Black Friday. A snapshot of John’s comments feature in Retail Week’s whitepaper, which can be downloaded here. Here’s what he had to say:

1. How did these shopping days come about?

“Peak shopping days are largely a result of the US Thanksgiving phenomenon which is a day perfectly situated before the Christmas shopping period, and it simply expanded from there. Discount shopping days have all been selected around times of year where gift-giving in their respective countries takes place, and this is where retailers saw opportunity to capitalise on this and issue sales to capture further customers and sales. In the UK and US, Black Friday has become the focal point for Christmas gift shopping.”

2. What’s driving their success?

“It’s a confluence of the fact that consumers now know the time period when items will be on sale, and are choosing to wait for those days before purchase and the maturity of ecommerce as a shopping platform. The discounting of products and ease of shopping online is driving the success, and we are also seeing increasing success online with shoppers looking for the best deals and doing research beforehand.

“Online is actually an especially powerful channel in peak times because the digital-savvy shoppers that now drive the market know they can avoid the rush in-store. Discount days are gaining momentum in their own right, with consumers competing to buy products in a rush to buy gifts and retailers competing to offer the best deals.”

3. Which are the most popular and why? Can any of the international ones be replicated in the UK?

“The most popular is China’s Singles Day due to the sheer volume of its population. In the UK however, it is clear that the most popular one is Black Friday, which this year we actually expect to become more of a ‘Black FiveDay’ – a peak shopping period spanning five days, not one. There is a ton of opportunity for the days to be replicated far and wide. Retailers can even create their own days, which we have already seen with the likes of Amazon Prime Day coming over, creating its own peak period.

“Nowadays, every public occasion or event is an opportunity for a sale. It is likely that we are going to see peak sales days increase as a result, and the phenomena occur at any point of the year, given a retailer’s ability to create a buzz around it.

4. What have discount days told us about shopping trends and consumer behaviour?

“Online, discount days have shaped customer behaviour. Customers now look for products days before the sale and save it until the discount occurs. That same ‘smarter shopping’ principle also sees customers go online during busy periods to avoid the often manic instore experience.

“Discount days have also reiterated that, regardless of high levels of traffic and footfall, consumers still expect high levels of service and for the shopping process to run as smoothly as it would on a typical shopping day, which is something retailers need to prepare for during heavy lading times.”

5. Is ecommerce and mcommerce driving the popularity of these days?

“People are in a period now where they will opt to shop online rather than go to store. The ease of going online is driving a significant level of traffic. Consumers are able to spend less time shopping, buy much more and find their deals much more easily through searches on the website. As well as this, thanks to the increasing ease of the returns process, customers are much more willing to buy items as the whole process is becoming far more efficient.”

6. Why is it vital that retailers understand and learn from them?

“It is important to understand and learn from them so retailers can adapt their offerings and ensure they are providing the best experiences possible for their customers. Previously, it was important for retailers to have a good instore experience, then came the ecommerce experience, and then mobile experience. Now however, retailers need to apply what they learnt last year and ensure that they are approaching it from an online first focus. They need to ensure they are able to market their products online as best they can and make the transactions as simple as possible for customers.”

7. Which retailers have made a success of these days and which have struggled - and why?

“Retailers that have succeeded in capitalising on discount days are the ones who have created a marketing atmosphere around the day. The ones that have properly marketed their special offers and discounts, and ensured they have thought about their sales day strategy so it aligns with their sales channels, are the ones who are best prepared for the day. The ones that unfortunately have not done so well so far are the ones who have failed to recognise the online audience, and only prepared for high volumes of customers instore, and not online.”

8. What are the dangers of having too many discount days? Or should more opportunities be embraced?

“It is still unknown if the dangers outweigh the opportunities of having many discount days, as currently the market has not been over-stimulated with too many of them. If too many days do occur, it is likely that consumers will defer their purchases until those times. However there is an opportunity to alleviate some of the pressure in having more than one discount day.

“Black Friday last year saw an increase in traffic of four to eight times in volume over regular shopping days, which is extreme. If there were a few days spread throughout the year, this would provide shoppers with more of a choice and not set all their sights on a single day. We have begun to see a trend however of retailers spreading their peak trading days over the course of a few days. This year Salmon predicts that Black Friday will span a five-day period, becoming more of a Black Friday Week, as retailers cotton on to finding ways to manage the discount and high volumes of traffic in a more organised manner, in order to take the pressure off whilst still providing customers with great deals.”

Find out more about Salmon’s Peak Operations Service