Will 2020 Be the Year to End Black Friday?
Retail has been hit especially hard by the pandemic, with smaller local merchants often facing a much more difficult climate than their larger competitors. While large national chains have faced difficulties, with a record number of retail bankruptcies this year including those of Century 21 and Brooks Brothers, many local retailers were also forced to shutter due to the same prevailing forces. In-person, brick-and-mortar retail has been decimated this year, giving an advantage to retailers that already had an online presence before the pandemic and to those that were able to adapt quickly.
E-commerce platforms like Shopify saw record growth this year, as retailers bolstered their online presence to contend with their customers’ new shopping preferences. Customer habits have shifted immensely, with online shopping’s rise to retail dominance accelerating greatly in just one year. In fact, the current e-commerce landscape looks a lot closer to what we would have expected in 2030, signaling a full decade leap ahead in just a few months.
While this changes the equation for many retailers, it also gives them new tools to compete effectively. With more stores embracing e-commerce, there is more online data available to track the competition, bolster SEO, and offer discounts that most appeal to evolving consumer needs. Tapping into these strategies will help stores big and small execute during this year’s holiday season.
The evolving definition of Black Friday
Black Friday has always been a predominantly in-store event, with its counterpart Cyber Monday leading the e-commerce surge. While the two perennial shopping days have been slowly morphing together over the past few years — with sales spanning the whole weekend and many retailers offering online markdowns starting on Black Friday — the best Black Friday deals were always reserved for in-store shoppers. This is what led to massive lines, with people waiting in the early morning hours hoping to scoop up a doorbuster deal on a television or video game console before they sold out. This year, with the pandemic surging again in many parts of the country, these busy scenes will not be possible. This has pushed retailers to drastically shift their usual plans.
Many retailers, like Best Buy and Walmart, started their Black Friday sales in late October, offering multiple sets of deal days where certain products were discounted or offered as online doorbusters for a limited time. This gives shoppers an entire month or more to look for deals but also poses challenges for retailers looking to keep up with their competition. There’s no longer one weekend to monitor but rather a full month where competitors will be offering a revolving series of deals.
Evolving shopper preferences caused by the new normal also create challenges. The status quo of Black Friday’s past is out, and the data gathered from prior years is no longer useful. While business and evening attire or travel products like luggage may have been popular items in the past, they’re no longer needed by many consumers who now seek athleisure and new kitchen gadgets as they spend more time at home. Deals that may have drawn shoppers into a store in the past might no longer be as alluring. To compensate, retailers need to leverage more recent online data and insights that better reflect new customer preferences. This data needs to be collected in real-time to give brands the most advantages to offer customers the right deal at the right time and maximize sales.
The key to holiday sales success – online data sources
The shift to an online and month-long Black Friday presents an opportunity for retailers, especially smaller brands that entered the e-commerce world for the first time this year. On past Black Fridays, they were limited to a customer base in the area of their stores, but they now have access to a much larger market and can really maximize the holiday sale season. It’s still a challenge to compete with larger competitors that have vast shipping networks and name recognition — not to mention that discounting products for an entire month is just not feasible for many smaller shops — but the obstacles are not insurmountable.
This is where resources like online data collection come into play. They even the playing field for retailers large and small by allowing them to see how competitors are pricing similar items and how long sales are lasting. With many big-box retailers hosting several different deal periods, smaller retailers can use data to time their own discounts to correlate with just those couple of days rather than the whole month. Online data also gives insight into what product categories are trending with shoppers. This will not only let retailers better predict how much stock they’ll need but can also be an indicator of what items might not need as big of a discount to still drive demand. It’s through targeted, data-informed offers like this that retailers can get a leg up in this new Black Friday — and get it fast.
The abnormality of the 2020 holiday shopping season gives retailers a real opportunity to shift their strategies, adopt new technology, and set themselves up for success for years to come. Just like the pandemic has accelerated the overall shift to e-commerce, prompting many smaller retailers to go online for the first time, it’s also underscoring the importance of leveraging online data-driven insights so businesses can more effectively target their discounts. This is something that many in the retail industry and beyond are already recognizing the need for, with 49% of IT decision-makers already using online data collection for market research.
These drastic changes in the retail landscape are not likely to revert back to their 2019 norms once the pandemic is brought under control. Customers have been exposed to how much easier it is to do their holiday shopping online, with deals springing up the entire month, and it’s going to be much more difficult to entice them back to long lines and crowded shopping centers in future years.
Black Friday this year will probably look a lot like it would’ve been in about a decade; we’ve just accelerated the online shift. 2020 will be the year that Black Friday and Cyber Monday stop being shopping ‘days.’ They’ll be turned completely upside down for years to come as retailers embrace a holiday shopping season of deals, strategized and targeted based on insights from online data.
Or Lenchner is CEO of Luminati Networks.