“You’re not going to believe this,” you say. Your grandkids look up from their Thanksgiving dinner. “We used to get up at 3 a.m. the Friday after Thanksgiving just to go out shopping. You’d wait in line outside, in the cold, in the middle of the night, for hours. When the store’s door finally opened, people trampled each other just to get cheap TVs!”
Sounds crazy doesn’t it? The only thing crazier than the pandemonium associated with one of the busiest shopping weekends of the year, is that it may already be on the way out. Based on the trends that retailers aren’t talking about, Black Friday as we know it could become no more than a strange memory; sooner than you think.
Consumer spending on Black Friday weekend has plummeted more than $8 billion in just two years. It hit its peak in 2012 at $59 billion. 2013 was the beginning of the fall, coming in at $57 billion. And 2014 marked the worst Black Friday weekend in years, hitting a mere $50 billion.
If you’re like many of our advertisers, you may not think the fate of Black Friday has much of an impact on your business. Maybe the dollars spent on Black Friday don’t make or break your bottom line. However, understanding the rise and fall of the Black Friday phenomenon can change the trajectory of any business. The trends that are eroding Black Friday’s performance could be hurting you, too.
The Event is Crumbling
The Black Friday Event was once the perfect storm of persuasion. The offers were too good to refuse. Retailers dramatically slashed prices on brand new, big-ticket tech items (like HDTVs) to drive people into their stores. They harnessed scarcity by only having a limited number of doorbuster sale items. Supplies were truly limited, which forced people to be first in line if they wanted a chance at the best deals. An individual retailer’s exclusive offers raised the sense of urgency even more, because one could only get them by being physically present at the moment the event started.
The Black Friday Event also created the net impression that the entire store was on sale even if it wasn’t. In 2012, the average consumer spent $423 on Black Friday. The doorbusters may have gotten them into the store, but they left with far more than just the sale items.
In its inception, Black Friday was bound by cultural rules that limited the scope of the event. Those limits actually increased the sense of urgency. Families would scour the newspapers for the best deals after their thanksgiving dinner and chart out a plan for the longest shopping day of the year.
When retailers started opening their doors earlier and earlier on Thanksgiving Day to squeeze in extra shopping hours, they may have killed the goose that laid the golden eggs. It forced families to choose between shopping and pumpkin pie. By extending the sale, they also stripped away what made Friday’s early start special.
By having Black Friday week and even month in some cases, the net impression that the whole store is actually on sale falls away. Each deal is getting weighed on its own merits, stifling the frenzy and undermining a retailer’s ability to use sale items as a gateway into more spending. By 2014, the average consumer only spent an average of $381, down 10 percent from 2012.
At Marketing Architects, we’ve seen firsthand in our advertising just how powerful an event can be. An event implies an end date which elevates the urgency of your message and offer. Anything you can do to convey scarcity, exclusivity and fear of loss will increase your response rates. As long as you have cross-channel support for your events, you’ll see a lift in conversion as well.
Mobile Deal Stalkers
Another trend that’s undermining Black Friday sales is the rise of mobile browsing. Rapid mobile browsing allows consumers to cherry pick the best deals and avoid everything else. With total visibility to pricing everywhere at their fingertips, consumers were armed against lackluster deals. On Thanksgiving 2014, mobile devices drove 52 percent of all U.S. internet traffic. For the first time, consumers did more browsing on their mobile devices than on their PCs.
The shift toward mobile was bad news for any store banking on a big day. Mobile conversion is significantly lower than any other form of online shopping. According to an e-commerce mobile report, the average conversion rate for a desktop was 4.3 percent, 2.8 percent on tablets, and a mere 1.4 percent on mobile phones. When a mobile consumer does place an order, they’re buying 20 percent less product and their lifetime value is 22 percent lower.
The takeaway for advertisers? No matter what your CTA says, a rising number of consumers will check you out on their phones first. Having a mobile-friendly experience is paramount in capturing as much mobile conversion as possible. Remember that consumers aren’t experiencing your brand in a vacuum anymore, either. So if the offer you’re advertising isn’t a real deal, your conversion rates will suffer across the board.
The Rise of Cyber Monday and Retail’s Kryptonite
The sharp fall in retail pandemonium has given rise to a new tradition in holiday shopping. The day after a long weekend of family and festivities, people are logging into their work computers and shopping in record numbers. With a 15 percent increase in online sales in 2014 over 2013, Cyber Monday has become the largest online shopping day of the year.
The rise of Cyber Monday has revealed Black Friday retail’s Achilles’ heel: fast, free shipping. Amazon has set the gold standard with lightning deals that provoke immediate action while delivering rock bottom prices free of retail overhead. Since many of the purchases are for a holiday that’s still almost a month away, the immediacy of retail isn’t much of a benefit. Big box stores are struggling to come up with compelling reasons for their customers to compromise Thanksgiving plans, stand in line, fight for parking, and find child care just to go shopping.
The idea that people only go to retail on Friday and only shop online on Monday is nothing more than a retailer’s fantasy. The lines are blurred. Retailers can’t stop customers from price shopping online any more than a direct response advertiser can force their audience to call. Consumers have more power than ever. They can cover serious ground to find the best deals and they’ll chase them however they choose.
That’s why an omni-channel marketing strategy is crucial. Deal seekers are constantly on the prowl and if you can meet them wherever they choose to shop, there’ll be a massive audience ready to buy from you. A compelling direct response message that cuts through the clutter to deliver an irresistible offer is exactly what they’re looking for.
There’s never been a better time to go direct. Let’s talk so we can prove it to you. Marketing Architects has everything you need under one roof to launch campaigns in TV and radio with the online optimization to get them working together.