Black Friday. The retail holiday that drives consumers by the masses into the retail marketplace for door-busting deals. It’s also the day that traditionally marked the first day of moving from “red” losses to “black” year-to-date profits for many retailers. It’s no surprise retailers put extra time, resources and effort preparing for this big day, but as retailers look to connect with their customers more frequently, is it surprising the day after Thanksgiving remains such a powerful customer engagement point?
“Black Fridays have become a cultural phenomenon, a bit of a marathon for many people”, says Kelli Hollinger, Director of the Center of Retailing Studies at Mays Business School, Texas A&M. “But things are changing. For example, prices are now guaranteed online so that the in-store price matches what is offered online. This gives consumers more choice and control over how and when to buy.”
“Consumer shopping behavior is shifting toward finding deals year-round, so the traditional ‘big sale’ days are somewhat less important,” says Steven Kirn, Ph.D. of the David F. Miller Retailing and Education and Research Center at the University of Florida. “Perhaps it started with ‘Cyber Monday,’ and then ‘Small Business Saturday,’ but it appears to be a larger trend to spread holiday sales over a longer period, which makes a lot more business sense.”
Despite the extension of holiday sales and desire to get the best deals everyday, Black Friday still generates a lot of buzz and excitement. It’s also one of the biggest days for retail operations such as inventory flow, staffing, security and logistics.
“At Harte Hanks we help our retail customers connect with their customers every day,” says Kevin Berthiaume, Logistics Lead for Harte Hanks. “But in preparation for Black Friday, success is about scale and execution. To date, our logistics team helped Kohl’s deliver 100s of millions of inserts. More than 10 million of those inserts needed to arrive timely in preparation for Black Friday. We understand the importance of delivering on that kind of volume any time of year, and the significant impact it has on our customer’s business.”
“Consumers are increasingly geared to shop for deals year-round,” Says Kirn. “They wait for sales and then buy. They generally think opening prices are set high so that the retailer does not lose money when they finally put items on sale. There is a difference between consumer attitudes and behaviors. Consumers will say they want everyday low prices, but their actual behavior is to prefer to wait for sales. JC Penney ran into this problem. They marked their prices down 40 percent, but sales dropped. Consumers interpreted the low prices as a sign of low quality. They wanted to buy when items were on sale and did not trust everyday low prices from JC Penney.”
In a recent conversation with Steven Kirn Ph.D., he shared some interesting shifts in consumer perception reflected in a survey released this week:
“Just a few years ago, shoppers said that 25 percent off was a ‘good deal’ and enough to influence them to buy. A new survey released this week suggests it is necessary to discount up to 60 percent to be considered a good deal.”
This increase is deal seeking further emphasizes the need to establish valued relationships with your customers in order to take them beyond price points to valuing the experience with the brand.
Ken Bernhardt, is the chairman of the Harte Hanks Marketing Advisory Board and Regents Professor Emeritus at Georgia State University’s Robinson College of Business. As Ken sees it, the rise of digital shopping together with increasing consumer procrastination have resulted in the Saturday before Christmas replacing Black Friday as the busiest shopping day of the year. Black Friday, however, remains important as the traditional start of the holiday shopping season and still represents more than $50 billion in retail sales.
“At Harte Hanks, we know every day is an opportunity to help our clients connect with their customers,” says Frank Grillo, CMO, Harte Hanks. “Black Friday will always be an important day for retailers, but so is every other day of the year. Customer expectations are increasing with proliferation of mobile, social and access to channels of communication. Sending out deals isn’t enough anymore. Now more than ever it’s important to engage customers in a memorable, meaningful experience at every opportunity.”
Savvy consumers are aware retailers gather information and preferences so it’s a real miss when a retailer fails to engage in relevant customer interactions. According to a recent study by Magnetic, 50 percent of consumers say they regularly see email with irrelevant information and only half of all retailers report they know what messages resonate with their customers.
From an operational perspective, the 2015 holiday season is a done deal. But data and research can be a North Star for your brand moving forward. It’s the perfect time to get your 2016 game plan together to take customer engagement to a new level, each and every day, including Black Friday.