GETTING BRANDS BACK TO BLACK (FRIDAY)
Following our Summit where we ran a dedicated workshop with our founder, Anna Hart and brand strategist Georgie Billingham, we’re sharing our thoughts, findings and suggestions for the incoming Black Friday period.
The days are darker, the weather is colder and anyone you know who works in retail is doing overtime – it must be November. Overtaking January as the biggest month for sales in the calendar, November is now arguably the most integral shopping period for businesses large and small in the UK.
The term Black Friday was most likely coined as a reference to helping stores get ‘back in the black’ after a stagnant summer/fall sales period, which would inevitably take its toll despite a small boost from the days surrounding Thanksgiving. Ironically this has developed into an opportunity for consumers to be the ones reaping the benefits. The retail industry has slogged through 2019, with many labels already in ‘autumn sale' (which was unheard of a few years ago), so everyone (direct brands, platforms, stores and eCommerce) will be hoping November is the month to turn things around.
Considering that last year’s Black Friday fell on the weekend before pay day, a very awkward point for the majority of potential spenders, sales were phenomenal. Consumers spent £1.5 billion in the days leading up to the crucial weekend, a figure over quadruple the amount of a ‘regular’ week for the retail sector. The average woman in the UK spent £328 more than their usual monthly spend, a number that becomes more radical when you consider the same group only spent £140 on retail five years ago …across the entire Christmas shopping period.
Given the timing of this year’s week-long offer extravaganza, which falls neatly after pay day, we can only anticipate that sales will be higher. It should be noted that as impressive as the previous numbers are, although credit card usage was increased by 10% compared to 2017, the average transaction value (ATV) dropped by 24% – possibly indicating that although consumers are willing to spend more frequently, they’re willing to spend less – so the discounts need to big.
However, there is a lot to consider in terms of participation, whether you are a brand, a consumer or in fact, an influencer. Consumers have been inundated with compelling statistics that show the environmental impact of the retail industry and purchases are far more considered, not just on price, but on their sustainability. Equally, with 24% of global Black Friday revenue stemming from Amazon alone it’s evident that for direct-to-consumer businesses the shopping period isn’t the easiest thing to get on board with. Competitive pricing means that often a direct-brands RRP is already as low as they can go, and offering any further discount puts sales at an operational loss.
So, when do I start my Black Friday offer?
From what we’ve seen so far, Black Friday is now morphing into a general ‘Cyber Week’ of spending. 70% of brand participants had already gone into sale by the Wednesday before Black Friday.
Does it have to be a % off, and if so what discount should I be offering?
As previously indicated, your brand’s participation should be primarily led by your financial ability to discount. You shouldn’t ever feel you have to take part, especially when so much attention is given to the value of ‘shopping smaller’ and supporting small businesses.
But if you are in a position that your margins allow it, the starting discount is considered to be 20%, rising to 50% towards the end of the sales period. Consumers now consider anything less than 20% uninteresting – particularly for new customers where a first-purchase discount of 10% is often available.
That said, while so much focus is put on valuing the new customer, we suggest instead viewing the period as a time to reward and thank those who have previously bought from you. If we were a brand, we’d only offer a discount to existing customers.
Where does social media sit in all of this?
It can’t be ignored that social media, and therefore influencers, have a huge role to play in this. 80% of sales made by under 40s were assisted by social media content, the next most successful media form being brand’s own newsletters which drove 4% of sales. So, yes we advise using social media as a way to make consumers aware of discounts.
As a brand, should you run an influencer campaign during this time?
Our argument is, no. We don’t feel that either running or (as an influencer) taking on a brand campaign is a good thing during this time. For a brand, you’re essentially double (potentially triple) paying for a sale – depending on how much you are prepared to spend on a new customer.
Influencers will charge you their usual prices, meaning your ROI will drop as your average basket (the amount a single customer spends with you) will more than likely be less with the discounts.
We would instead suggest making sure influencers who regularly work with you are aware of your discounts and ask them what they need from your side to help them promote you (from an influencer’s perspective, they should always be prepared to shout out brands they genuinely love – and shouldn’t expect payment every time).
Affiliate marketing programs are a brilliant way to do this; perhaps consider offering an increased percentage of the sale value. For example, you could offer 5% for existing customers and 10% for new customers. This means you wouldn’t lose ROI on those who are already shop with you, but also reward sales – especially those driven by people are new to your brand/product/service.
As an influencer, should you participate?
The noise around the discounts during last year’s Black Friday was so large that many consumers ‘switched off’. Instagram’s statistics show that although the number of people ‘swiping up’ (following a call-to-action to visit a website, encouraged by an influencer) rose by 400% during Black Friday, the number of accounts that were unfollows (accounts choosing to stop following another account) also rose by the same percentage.
So that’s brands – as an influencer, how can you decide if Black Friday is for you?
Firstly, consider whether this is part of your narrative. Do you regularly share discount codes and notify your followers about special offers or sales from the brands you care about? Always remember that it’s unlikely that you will be the only influencer on your followers’ feeds encouraging them to make purchases – so make sure whatever you do doesn’t flood them, meaning you’ll lose them as a follower.
We suggest alerting followers to offers on brands and products they know you genuinely love – brands you’ve mentioned before, products you have recommended and services they know you use.
Also, and perhaps most importantly, make sure you stay true to yourself. Short term gains aren’t worth compromising your overall integrity, so if you usually express strong views on consumerism or sustainability, the likelihood is that the majority of Black Friday offers aren’t suitable for you.
So as a round up, we feel that as much as Black Friday is a huge sales opportunity for anyone in (and around) the retail sector, huge considerations should be made before investing valuable budget and resources to take part. Participation should leave a brand profitable, and not compromise anyone’s general ethics and usual practice.