Black Friday 2016: new trends and future opportunities


Image credit: Fenwick

In 4 days it will be Friday the 25th November, better known to the world as Black Friday.

Black Friday has become very popular in Europe, with retailers using it to kick start shoppers into buying their Christmas purchases. In fact, it’s now so popular that retailers have extended it to Black Friday week! With more sales than boxing day, it’s a huge event for retail.

However, fresh on it’s tail is a sales day that originates from China called Singles Day (there’ll be more about this in our next post out very soon, stay tuned!), first let’s take a look at this years Black Friday predictions.

Some figures…

The popularity of Black Friday is growing faster in Europe and sales have increased dramatically over the years.

Around 14 million English customers will join the 24 hour sale, spending £2.3 million a minute, according to vouchercodes.co.uk and the Centre for Retail Research.

Let’s look at this year’s predictions from IMRG:

  • £6.77 billion forecast to be spent over the Black Friday peak period (Monday 21 – Monday 28 November 2016)
  • £1.27 billion to be spent on Black Friday (+16% higher than 2015)
  • £3.45 billion (51%) of total sales will be completed through mobile devices (smartphones and tablets)

According to a survey by PwC (on 2000 adults), people intend to spend more on Electrical and Technology items and Christmas related products.

black_friday

Top 10 categories shoppers will spend the most money on (PwC)

Around three fifths (57%) of consumers that were planning a purchase said they were now holding off in anticipation of getting a better deal on Black Friday/Cyber Monday.

Your opportunity: Baby Boomers

Baby Boomers have the biggest increase in predicted spend for 2016’s Black Friday. Recent research we conducted with this audience showed they are really into deals and discounts so now they’re getting more aware of and familiar with Black Friday this is showing in their huge increased predicted spend for 2016. Looking at their predicted spending growth compared to other age groups, this is a big opportunity for retailers and we would advise keeping a close eye on baby boomers in 2017 if you aren’t already. As they become more tech savvy, more comfortable with online spending and familiar with events such as Black Friday, they will be a huge growing market for retail. Remember they have a lot of spare cash and are very brand loyal customers (trust and quality are very important to them).

baby_boomers_black_friday

Average predicted spend by age range (PwC)

Want to know about the results of our recent Baby Boomer Research? Send us a quick message and we’ll let you know when we publish the results so you can be the first to read all about them!

Black Friday extended

Black Friday started out as a single day of discounting activity, which then became a weekend in 2014, an extended period in 2015 and is now spanning an entire week in 2016.

Amazon and other online retailers have realised that spreading shipment of orders into early November will positively impact customers’ satisfaction. Amazon has extended it’s Black Friday promotions to almost two weeks. In 2015, on Black Friday, the retailer sold more than 7.4m items in the UK. This was a record for Amazon, and sales equated to 86 items a second! This year, it will offer double the number of deals compared to last year.

Many other retailers have followed Amazon. For example, Debenhams, Sharps, Boots, Feel Unique and more have extended their Black Friday to an entire week of discounts.

The shift to online

Shoppers are choosing to look for deals online instead of the high street (64% online vs 17% in store), to overcome the chaotic scenes seen in shops in previous years (for more insights about shopping behaviour on Black Friday, check out our blog post Black Friday: Consumer psychology of grabbing a bargain) and never-ending waiting times at the till.

Retailers are now trying to spread out consumer spending. In past years, Black Friday has been typified by crazy situations in stores with shoppers fighting to pick up discounts, and websites crashing due to the enormous number of visitors.

Last year, the technical difficulties forced some consumers to head to the high street, however a lot of them left very disappointed as they couldn’t get the deals they expected to find online, with some customers even finding it cheaper and more convenient to click and collect via their mobile in store rather than purchase at the till.

Courier companies are struggling to cope with the rush of online orders, with Hermes asking 5,000 staff to work up to 20 days without a break to deal with the amount of parcels. The couriers’ working conditions really worried the Health and Safety Executive that has been mobilised “to ensure the company’s actions do not put the safety of its couriers as well as road users at risk” (The Guardian, 20th Nov 2016).

Black Friday: Consumer psychology of grabbing a bargain

This year, online sales over the 24-hour Black Friday period are expected to surpass £1bn for the first time in UK history (last year they were £810m). £3.5bn in sales are expected over the whole weekend. For retailers, Black Friday is a huge sales opportunity but also creates pressure to keep up with the Joneses and discount items to an uncomfortable level. Combine this with the instore chaos we saw in the UK last year and it’s a pretty crazy time!

For Americans, Black Friday symbolises the start of the Christmas holiday shopping season. They take the Friday after Thanksgiving off from work, taking advantage of the long weekend to start their Christmas shopping.

Although Black Friday is still not very popular in Europe, in the UK it has very quickly become the biggest shopping day of the year, even beating Boxing Day.

The figures speak for themselves…

In 2014, UK consumers spent £810m online on Black Friday and they are expected to spend even more this year. According to IMRG & Experian, online sales will reach £1.07bn. If that prediction is correct, online sales will reach a record in the UK’s online retailing history, exceeding for the first time £1bn in just 24 hours.

The Centre for Retail Research estimates that in total (combining online and in store shopping) British people will spend £1.39Bn in just one day, this is 32% more than the previous year.

Black Friday Sales

Telegraph, 23 November 2015. http://www.telegraph.co.uk/finance/black-friday/12009461/Black-Friday-2015-the-best-bargains-and-deals-when-and-where.html

Who are Black Friday Shoppers?

First of all, let’s understand who are Black Friday typical shoppers: (IMRG 21 October 2015, http://www.imrg.org/-1bn-to-be-spent-by-uk-online-shoppers-this-black-friday)

  • Typically families with children
  • Aged between 35-55
  • Living in suburban or residential locations; they don’t have easy access to shops
  • Facebook users
  • Regular consumers of content on mobile devices

Compare this with Boxing Day shoppers who are more likely to be younger and live in urban city centres.

Their demographic profile has important implications for retailers. For example, considering that the most Black Friday shoppers don’t live in the city centre and don’t have easy access to shops, attention should be put in to planning and optimising the delivery service or in communicating details about deals, coupons, opening times, etc, through social media, to enable costumers to plan and organise their shopping.

How are Black Friday customers shopping?

(Simpson L., Taylor L., O’Rourke K. and Shaw K. (2011). An Analysis of Consumer Behaviour on Black Friday, American International Journal of Contemporary Research, Vol. 1 No.1)

  • They already have a specific product in mind
  • They buy particularly electronic media items
  • More willing to buy gift items rather then items for themselves

This year, consumers will be even more aware about the convenience of buying on Black Friday and shops will be even more crowded than last year, lines outside will be longer and tension will grow faster among the more competitive ones.

Last year, Black Friday was definitely a success, but retailers weren’t ready to deal with, quite frankly, the chaos that ensued amongst consumers, to the point that some of them have decided not to take part again this year. One of the most surprising retailers not taking part this year is American owned Asda, who will instead offer discounts spread across November and December.

Daily Mail, 28 November 2014, Manchester.
http://www.dailymail.co.uk/news/article-2852585/Mayhem-Black-Friday-begins-Shoppers-clash-supermarkets-trying-grab-bargains-Boots-Game-Curry-s-PC-world-websites-crash-thousands-start-hunt-Christmas-deals.html

Copyright LUKE MACGREGOR

Why is Black Friday more aggressive than other UK sales days

Last year, the situation got so chaotic that Telegraph renamed the day as “The Black and Blue Friday”. People queued in the cold outside shops for hours, then running and fighting their way to the product they wanted. But it’s not like this on Boxing Day or any other sale day in the UK…

So, what’s transformed the decent and respectable UK shopper into a merciless shopping, fighting machine?  Frustration can be a reasonable answer.

A lot of psychologists tried to find explanations and causes of aggressive behaviours and the Frustration-Aggression Theory (Dollard, Neal, Miller, at al. 1939; Berkowitz, 1969) is one of the hypothesis proposed to explain the phenomenon. The authors support the idea that when people perceive that they are being prevented from achieving a goal, their frustration is likely to turn to aggression and violence. The closer you get to a goal, the greater the excitement and expectation and consequently the more frustrated you get by being stopped.

The theory doesn’t suggest that frustration always lead to aggression, but in some particular circumstances can boost aggressive behaviours.

Black Friday might be one of those above mentioned circumstances.

Sales psychology: Why sales drive shoppers

Psychologists say that the allure of a bargain speaks to our human nature. Limited-time offers and last chance buys trigger the fear of scarcity and Fear of loss that drive us to buy. It makes us buy things we don’t really need, simply because we might not have the opportunity to buy them so cheaply again. IT’s how you end up with boxes of shoes in the cupboard that you never wear but you thought were an absolute bargain at the time you bought them with 70% off!

“People truly want to get a good deal, and so they might be less rational… when they can look in the environment and find different cues that make them think they’re getting a good deal, the decision-making is emotional” Kenneth Manning, professor at Colorado State University.

Did you know that sales drive our competitive spirit? We want to tell other about the great deal we got and we hope ours was better than theirs (even if we didn’t really need the item in the first place!). People treat it as a personal accomplishment to boast about.

Sales also have a positive affect our brain chemistry. In 2007, Stanford researchers discovered that when subjects shopping for clothes saw a sale price, the brain’s pleasure centre lit up. Sales, in other words, make us happy.

The sales environment also triggers consumers to part with their cash: “We are classically conditioned to hear this music, see these lights, even the experience of the shorter days and associate it with spending and shopping,” says Dr. Ramani Durvasula, a licensed clinical psychologist

So, be ready, 2015 Black Friday is just around the corner (27th November) and we hope and wish will be a good one, for both shoppers and retailers!

Fascinating insights: E-commerce expo day 1

This week we attended the London e-commerce expo to discover the latest statistics, technology and importantly, what’s predicted to be big in 2015. Here’s our write-up of the sessions we attended on day 1 (day 2 to come soon). What’s very clear is that mobile will be massive in 2015! New technology enabling more advanced tracking of customers offline and online will also pave the way for advanced data, customer engagement and retargeting across channels (more of this in our next blog post: day 2).

Driving Sales in a connected world

Tracy Yaverbaun, Facebook

facebook mobile
Mobile was a key theme in Tracy’s presentation. There has been a huge change in devices and multi-device use, for marketers this is a huge challenge!

Mobile is where the growth is and where it will continue to be but brands aren’t moving as fast as consumers.

Only 4% of budgets go into mobile but it’s where 20% of consumers time is. Everything has to work on mobile for facebook now.

80% of Facebook’s users are mobile. 26m daily users on facebook, out of these 23m are mobile .

Mobile is disrupting commerce. Physical shop real estate is shrinking so e-commerce is more important than ever. Yet the screen size is smaller so marketers have to work harder on the small screen real estate.

Consumers want msgs relevant to them at the right place at the right time. You need to consider:

1. Discovery. People can find your brand. The Facebook newsfeed is one of the best places for consumers to discover products. Most people check their newsfeed a whopping 14 times every day!

2. Personalisation. Personalisation at scale. E.g. Amazon used Facebook to only target people who didn’t own kindles and were frequent flyers (using their CRM to filter out people who had kindles). It’s all about ‘good targeting’.

3. Measurement. ROI no matter which device consumers start or end their journey. Mobile has a huge amount of traffic but a lot of brands discount this. Marketers are obsessed with looking at clicks but they don’t matter, what matters is return on investment. Even if people don’t click, they’ve seen your message and taken in your brand. Facebook now has cross device measurement capability.

The future of ecommerce is personalised discovery across devices and that you can measure every step along the way.

The future of mobile on the high street

Andrew McClelland and Matt Norbury

Future of mobile on the high street
What was very clear in this keynote, was that mobile is a huge, growing market and the key takeaway was that if you’re not focussed on mobile you are already getting left behind. Here are some of the key points:

Mobile growth is larger than tablet. 186% average growth in sales via mobile compared to 131% in tablet e-cmmerce. Average mobile conversion last year was 1.1%, this year 1.4%.

Basket size on mobiles is almost equal to desktop. £76 average basket value for mobile, average for desktop is £80.

8 in 10 smartphone users will use their smartphone at some point during the purchase process.

Mobile is critical to retail in the coming years. You have got to give people a real reason to engage – games and fun stuff. Add sufficient value that people keep coming back.

Don’t fear ‘showrooming’. Although people are using their mobiles inshore, most are actually just checking their email and social networks, not comparing prices.

Provide wifi. Wifi in-store is becoming a requisite – people expect it. Some people will leave a store if it doesn’t have wifi. Good for the guys whilst the girlfriend is shopping – keeps the boyfriend happier, keeps the girlfriend in the store for longer, everyones happy and the girlfriend has spent more.

Personalisation is big. 70% of people will give personal information and preferences to get something valuable in return such as offers.

Use beacons to measure footfall. Can measure uplift of message and conversion from a voucher you sent them. See the full end-to-end conversion, starting online, ending offline.

Five tips to make sure that customers transact with your app

David Pope, Jumio

Mobile commerce transactions

25% of downloaded apps are NEVER used.

Nearly 66% of consumers making purchases on a tablet or phone, regularly abandon their purchases during the payment process.

David explained his top five tips to get customers using and buying from your mobile app:

1. Be aware which operating system or platform will deliver the best return for your app. Interestingly, although Google Plays market share is way more than Apple’s, Apple’s users actually spend more – almost five times as much! ios users display 6 times the engagement of android users and tablets drive about 20% more spending on avg. Avg spending is 89 eur for tablets, 67 for pcs, 66 for smartphones. Although this isn’t the same in every industry and he specifically excluded travel and gaming as not applicable.

2. Be sensitive to data privacy concerns that may inhibit app usage. Trust is the number  barrier to growth of mobile content and commerce. 99% of users will not share their contact information. Less is more. Don’t ask for location, don’t ask how old the user is, don’t ask to access their contacts – greed for data gets in the way of transactions.

3. Reduce payment friction. This is all about your User Experience. David specifically talked about the keystroke level model – timing how long it will take customer to type data into your forms and working to reduce this number. And the gestalt laws of grouping (this is a more general design rule). Quite rightly, he pointed out that lots of apps still show alphanumeric keyboards for numeric data input – this is really frustrating and time consuming for your users. He also spoke of form length as important for reducing friction and gave the example of one change reduced to just 4 fields that resulted in 160% increase in conversions.

4. Balance functionality with speed and performance. There is a direct link between the performance of an app, number of downloads and its rankings in the app store. Tagman widget for calculating performance optimisation for your app. David recommends taking an MVP approach.

5. Build customer retention into your app. Integrate social features e.g. Sephora. Create a sense of community and use timely reminders, e.g. Map my run. Promote the benefits of your app, e.g. Swiftkey, tells you how much time you saved compare to normal keyboard. Personalise your customers experience.

Jumio
David’s aim in describing the above, was in promoting his product, Jumio. Basically instead of typing in their details, your customer would use Jumio on their mobile to scan their credit card and all the fields on your form would be populated automatically (Fastfill). Apparently this aids validation and reduces fraud. Note, legally, the customer still needs to manually enter their CVC number. It’s claimed that the average increase in form completion rate is 18-33%, coupled with less data entry errors.

Watch the video:

The customer journey report 2014

Dave Chaffey, Smart Insights

Dave’s slides can be viewed below. He placed focus on the customer journey and how wide it actually is – you need to focus on all channels, both online and offline and how people interact with / switch between them. It’s also important to use the right language for each of your personas to appeal to them in the words they use.

It was fairly disappointing to see that only 33% of respondents in the survey make use of usability studies but I’d be willing to bet that these 33% are the more successful companies. Clearly, there are a lot of companies that need to make greater use of user research methods as opposed to just analysing numbers.

Beware of the box: Don’t let your commerce software dictate how your business works

David Winterbottom

David’s presentation was from  a more technical viewpoint, being from a developer background originally. I loved his approach to writing software requirements which is called YAGNI (You ain’t gonna need it). We often experience feature / scope creep in our UX world and we’re always battling against it, so YAGNI is definitely an acronym I’m going to be using! Quite rightly, David also advised that companies shouldn’t write a long list of software requirements at the RFP phase as this should be open at this stage to allow the company you work with to come up with the best solution, otherwise you’re already limiting them and telling them the solution.

I also liked the example that in Korea, customers can now scan QR codes to purchase things in the store. Soon, you’ll also be able to have your items delivered so that they’re waiting for you when you get back home (very cool).

David spoke briefly about an open source platform they’ve created called ‘Oscar‘. It’s totally free, designer friendly (apparently), and mobile by default. It’s built in Django and quick for prototyping which David said can be done in just a few days.

Read part 2 : More fascinating e-commerce insights for 2015!