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Black Friday, Cyber Monday and all the days around it were a HUGE success.
- The biggest and baddest online retail day ever seen!
- More traffic in a single day than in a normal year
- Triple digit revenue growth!
Retailers put out statements and press releases. Ecommerce platforms discuss gross merchandise volume. Vendors talk about their massive impact on transactions.
And the industry media gobble it all up and make sure it spreads.
And if I a look at my client’s’ performance of the past days, I also see strong to very strong sales numbers.
But there is a cost to all of this. One that’s too often glossed over.
Because while most of us are killing ourselves to provide amazing discounts, we’re really fighting for a piece of Amazon’s crumbles.
Especially on days like this.
So what’s going wrong?
#Winning At Black Friday
So what does winning Black Friday look like?
- Biggest revenue day in your store’s history?
- Adding more customers in a weekend than you would normally do in 2 months time?
- Customer lifetime value?
Usually all that’s talked about is #1. Overall sales.
Sometimes #2 is mentioned, the overall number of new customers. Ignoring that customers that come in on a heavy discount might not be the very best ones.
But that’s where it stops. Granted online stores making killer profits won’t be (and shouldn’t be) shouting from the rooftops. But profit and customer lifte time value is what it is ultimately all about for most of us.
In private conversations with clients, or with fellow ecommerce experts, these things do come up.
— James Gurd 🌝 🇬🇧 (@JamesGurd) November 27, 2017
There is a single mantra: more sales at any cost.
Can you really afford to give out 25-30-40 or even 50% off? And pay for free shipping on top of that? And pump more money into expensive advertising to notify people of those amazing deals?
1 – Let's think about Cyber Monday profitability for a moment. Here is an example of just how many units you have to move in order to equalize profitability. Look at what happens at 40% off and 50% off. pic.twitter.com/Eo1QBFqtaQ
— Kevin Hillstrom (@minethatdata) November 27, 2017
Most people are jumping on the bandwagon, and too few ask the hard questions whether this kind of behaviour is valuable in the long run.
The retailers (clients) that I've spoken felt it was more of a chore than anything else. They were doing it for the cash and not to miss out rather than any real benefit to their business. I also know some who opted out of the whole discounting fiasco.
— Matt Thorpe 👊💥 (@Thorpeedo) November 27, 2017
— Rohan Ayyar (@searchrook) November 27, 2017
That rather depends on the timeline you are assessing.
In the middle to long term it is a destructive phenomenon, but in the short term existing eCommerce providers need to eat.
Sometimes we have not got the time to stop bailing and repair the boat.#EcomChat
— 𝓜𝓪𝓷𝓵𝓮𝔂 (@LordManley) November 27, 2017
The more I think about it, the more I feel we’re playing someone else’s game.
The Mastermind Behind Black Friday
So is this all part of a conspiracy theory and are there some evil overlords playing us retailers as puppets?
Invented a long time ago by the retailers association to drive extra sales in the slump after Thanksgiving, the media eagerly picked it up.
In recent years I think it has become a me-too event. There is this peer pressure because you can’t be left out.
And media and vendors are turning up the pressure. In the months leading up to Black Friday, that’s literally all you see.
Tips, best practices, must-dos, checklists, guides, etc. Shopify even had a countdown timer on all their merchant’s dashboard 50 days in advance.
Everything to make it the best day of the year. But for whom? Themselves or their retail clients?
So if steeper discounts aren’t the answer, what can you do against all this pressure?
So what? Am I suggesting you just walk away from one of the biggest sales moments of the year?
No of course not. Consumers are looking for good deal and their wallets are open.
But do it at your own terms and not at all costs.
Here are a couple of things that I’ve seen retailers do that are very sensible answers to all of this madness.
1. Go earlier
Everyone starts promoting and sending emails around the same time.
So one thing you can do is to get ahead and push out your promotion or pre-sales before anyone else.
This isn’t a very sustainable tactic since that just spreads everything out over more days. But its something I’ve seen happen in the weeks before Black Friday 2017.
A good example comes from Dutch retailer Coolblue. They came up with Blue Friday. It’s Black Friday, but just a week earlier.
They packaged well. Claiming the postal services would be overburdened on actual Black Friday, they wanted to make sure that their customers would receive their orders in time. This angle allowed them to attract some PR to their event.
2. Exclusive early access for customers
A small variation on the above is the put out an early access deal exclusive for your existing customers. This has the additional value of rewarding them for their loyalty.
And if you have a couple of items that are at risk of selling out, you can play on the scarcity.
3. Limited discounts
Put together a good deal, but something that still is profitable to you. You might not maximize sales, but you will be closer to maximum profits.
You don’t know the economics of other stores, so don’t blindly copy their discounts.
4. Different promotions
Black Friday and deep discounts aren’t the best fit for every brand. Training customers to expect or wait for discounts is a slipperly slope.
And if you have a premium brands, those discounts might hurt you.
For Brand reputations thats a great move – offer items at discount but divorce yourself from the Black Friday hype. People are shopping and if they like your brand will check that.#EcomChat
— Simon Cox (@simoncox) November 27, 2017
5. Boost cart value
Here is a promo from shoe retailer Anothersole, 40% off on the 2nd pair. This is a smart deal, the big discount will get people to take action right now, but the full margin on the first item will offset some of that 40% to preserve overall profitability.
How To Create Your Own Black Friday
For retailers, there are only a handful of days/periods through the year that can really boost sales: Black Friday, Cyber Monday Christmas sales, Halloween, Valentine’s Day, Back to School, Super Bowl, World Series, etc.
But these are also the days when every other retailer is fighting for the same customers
You want to do your own thing and push hard when your competitors are asleep at the wheel.
The ever-amazing Seth Godin has come up with a blueprint we can follow to create our own Black Friday style event.
- Find something that people are already interested in doing (in this case, shopping)
- Add scarcity, mob dynamics, a bit of fear
- Repeat the meme in the media. Press releases, B roll, clever statistics regardless of veracity
- Do it on a slow news day, and mix in famous names, famous brands and even some hand-wringing about the plight of worker
It’s easier said than done. Creating and promoting a new event to promote your store might seem like a roundabout way to drive sales.
But if done well, the potential is huge.
Let’s take a look at two examples below to get some inspiration.
Amazon Prime Day
The company that has won, and will win all Black Friday’s in the foreseeable future of course is Amazon.
But that doesn’t mean that it is their prime focus.
To celebrate their 20th birthday, back in 2015, Amazon started with Prime Day.
Now it’s a recurring event in the middle of July, definitely a time when sales slide a bit for most of stores.
You need a Prime subscription to participate.
Like Black Friday, this has been picked up by media & vendors. The only difference is that’s this is Amazon’s own holiday.
The coverage surrounding Prime day is getting bigger with every year. The biggest websites on the Internet are giving the free publicity. And nobody seems to mind.
Knowing that there is money to be made, their huge affiliate network goes into overdrive to collect their own affiliate fees.
Not to mention that this event is in July. A Prime membership is required to participate. So when Black Friday rolls around, guess who has added a healthy stack of new members?
Nordstrom Anniversary sale
The second example is Nordstrom Anniversary sale, an event which generates “Christmas-like sales“.
The mechanics are very similar to Amazon’s Prime Day: middle of summer, huge discounts & affiliates pushing hard.
They have even refined their approach further, with Nordstrom credit card holders getting early access to the best deals.
Back to you
What will you do different next year? Let me know in the comments!