Black Friday 2015: A Big Deal for Online Retailers?
Black Friday has become one of the biggest shopping days of the year and, for anyone living on another planet, it's with us again this week. A few years ago, the discounts and deals day was little more than an American marketing ploy as far as UK retailers and customers were concerned. In 2015, this has changed, with a predicted £1bn to be spent by UK online shoppers this time around.
But what actually is Black Friday, and what does it mean for retailers selling online? Read our summary to find out the state of play this year.
What is Black Friday?
Black Friday is a shopping phenomenon that originates in the US. It happens the day after the country's national holiday – Thanksgiving – the fourth Friday of November each year, seeing it fall on Friday 27 November this time around.
The day sees retailers of all kinds offer their customers discounts for a limited time to welcome in the gift-buying season and kick-start pre-Christmas sales.
Although popular for years in the US, it’s only fairly recently that Black Friday has gained ground in the UK, with the likes of Amazon being at the forefront of the phenomenon since 2010.
What about Cyber Monday?
Black Friday and Cyber Monday are often talked about in conjunction with each other. Cyber Monday falls the Monday after Black Friday, bookending a weekend of sales. Typically, in the UK, you’ll find Black Friday deals available both on and offline, while Cyber Monday has a much stronger online focus.
Experian and IMRG predict that Cyber Monday online spend will soar 31% year-on-year to £943m.
What’s in it for retailers?
It’s clear there are plenty of UK shoppers who are willing to spend, spend, spend on Black Friday. Although the UK Black Friday online spend will still be far behind that of the US, there’s plenty of money to be had.
Google Trends shows the annually increasing worldwide interest in ‘Black Friday’:
For the UK, although it’s only been a key push for retailers for a much shorter period of time, the growth of interest between 2013 and 2014 is marked:
Using data from our friends at Brandwatch, we can see that the number of hourly mentions of 'Black Friday' on Twitter has increased dramatically over the last week (20 - 26 November 2015):
The following chart shows the most popular topics covered in Black Friday-related tweets. What's clear, even at a glance, is how strong the association between Black Friday and Amazon is. In fact, it's the only retailer to be included as an associated topic:
Of course, it's not just Amazon that is planning to capitalise on Black Friday. Some of the UK’s biggest retailers are embracing the event in a variety of ways:
- Amazon – A week of discounts, with deals of the day and lightning deals too
- John Lewis – Offering a price-match policy to match competitors’ deals on the day
- Argos – 12 days of sales, plus Red, White, and Blue Fridays in the run-up to the big day
- Currys –Deals both online and instore on the day, plus a Black Tag Event for 10 days
- ASOS – 20% off on everything with a discount code across the Cyber Weekend
- Urban Outfitters – Up to 50% off online and in-store
Is your paid search strategy up to scratch?
According to a study from paid search monitoring firm AdGooroo, as reported by Search Engine Land , paid search spend on ‘Black Friday’ terms this year grew dramatically a month earlier than in 2014. The study, based on US Google desktop text ad activity on 161 Black Friday-related keywords, found that spend began surging this year on 27 September. From this day up until 22 November 2015, 1,226 advertisers spent $7.3 million on those keywords.
So, is it wise for all UK retailers to boost their Black Friday biddable media spend? Here’s what our head of biddable media, Nate Wood, had to say on the topic:
“It’s not surprising to see so many retailers pumping budget into Black Friday ad spend in the run-up to the end of November. Retail data shows that Black Friday has pulled seasonal spend forward into November from a more traditional peak in the two-week run-up to Christmas. This weekend is becoming increasingly important, as well as the two weeks bracketing the event. So, the desire to grab some of that real estate that so many competitors are fighting for is obviously strong.
“However, this approach isn’t always correct. The most important thing – as with all biddable media campaigns – is to have a solid strategy behind any decision you make. Black Friday increases internet traffic, but the type of shopper is quite specific. There are retail verticals that benefit more than others, but increased activity from these verticals can increase the cost of advertising for everyone.
“CPCs and CPMs go up, so retailers have to spend more to be seen. It’s not worth spending that increased budget if your website can’t cope with the increased demand, or if you’re not in the sort of vertical that benefits from Black Friday. It can actually be strategically stronger to hold back on budget and utilise it at a time when traffic and purchase intent is still strong but where the advertising activity is a little less frenzied.
“Conversion behaviour also becomes erratic because of the ‘panic buying’ nature of the event. The decision needs to be made whether it makes sense for your business to engage in Black Friday, instead of holding fire and carrying out a solid strategy for the more sustainable and natural Christmas buying period.”
What’s in it for consumers?
Black Friday offers consumers the opportunity to snap up a bargain – to grab some Christmas presents (for yourself or your loved ones) at a discounted price. What’s not to love?
Indeed, it seems that big shopping events such as Black Friday do keep shoppers happy, with 77% of previous Black Friday shoppers rating their experience last year as ‘good’ or ‘very good’, according to eDigitalResearch and IMRG.
However, Black Friday has attracted negative press in the past, thanks to customers being disappointed by problems such as poor customer service and delivery, lack of stock and websites crashing due to increased demand.
Indeed, IMRG also found that shopper attitudes towards Black Friday are fairly evenly split: 31% of consumers look favourably on major discount events (such as Black Friday), while 30% do not.
Andy Mulcahy, editor at IMRG, commented: “ All indications are that [Black Friday] is going to get even bigger this year, so there are some key issues that need to be addressed – such as the availability and rate of discounts on offer, the delivery promise to customers, site performance etc. – as this will likely be a pivotal year in terms of shaping how Black Friday works and, crucially, how shoppers feel about it.”
Why are some brands wary of Black Friday?
Although Black Friday isn’t something brands can just ignore, not all UK retailers are wholeheartedly supporting the shopping event this year.
In 2014, Asda hit the Black Friday headlines for far-from-positive reasons, as the flash sales led to chaotic scrums in some of its stores. Subsequently, Asda has announced that it will be “stepping back” from Black Friday 2015.
Andy Clarke, Asda president and CEO, said:
“The decision to step away from Black Friday is not about the event itself. Over the last two years we’ve developed an organised, well-executed plan, but this year customers have told us loud and clear that they don’t want to be held hostage to a day or two of sales.”
Instead, the retailer has announced it will be investing over £26 million in “sustained savings” spread across a traditional seasonal shop.
The idea of sustained savings (and therefore sustained spending) alludes to another impact that Black Friday has on retailers – a decline in December spending in the run up to Christmas.
Last year, John Lewis chief executive Andy Street revealed that, for the first time, the retailer’s sales peaked with Black Friday rather than the week before Christmas.
There’s also the issue of struggling to meet the huge spike in online demand. In 2014, ASOS’ website crashed, while Marks & Spencer’s Castle Donington online distribution centre failed to cope, leading to a 5.8% decline in online sales over Christmas.
Read more about the impact of Black Friday 2014 on Christmas sales in our blog post: Online Shopping and High Street Stores – What Retailers Can Learn for Christmas 2015.
Whatever your view of Black Friday, the growing participation in the UK is not something retail brands can ignore. And, as with executing effective digital marketing campaigns around any calendar event, planning is key.
Read our top tips for planning a digital marketing campaign around a calendar event to find out how to get it right.