There were good reasons to believe that Black Friday 2020 was going to be another major retail event that circulates the dollar in the market fast. Well, that was before 2020 was beset by COVID-19 and the generally negative growth experienced across sectors since the pandemic was declared.
Economists, bankers, and retailers all have something to say about what’s going to happen to retail sales this year. Even so, everybody seems to be in unison about one thing. Holiday spending will become significantly different from the upward spending observed last year and in years before that.
So, in what ways will Black Friday 2020 be different?
Insights for Ecommerce Black Friday 2020 Deals
Whereas overall retail sales are plunging globally, online retail has been steadily climbing for several years now. Not even the COVID-19 pandemic has halted online consumer spending.
On the contrary, inevitable lockdowns and successive shelter-in-place orders since the pandemic began have accelerated ecommerce growth, based on data jointly reported by the US Census Bureau and the US Department of Commerce.
Below are a number of fundamental historical information vital in understanding ecommerce -- where it has been, where it is now, and where it is headed next:
- In 2019, Adobe Analytics estimated an all-time high of $9.2 Billion in Cyber Monday revenue, recording a 16.9% growth year-over-year, with about $3.0 Billion of total online sales closed via smartphones. Spending initiated over social media was minimal at just 2.6% of overall online sales.
- Black Friday online sales hit $7.4 Billion, slightly behind $7.9 Billion in 2018.
- According to official estimates released by the National Retail Federation, 189.6 million consumers shopped between Thanksgiving Day and Cyber Monday, with each buyer spending $361.90 on average.
Other key findings:
- Majority (58%) of spending went to clothing
- 75% of shoppers searched for the items online before buying
- Younger shoppers took advantage of social platforms to search the best Black Friday deals and Cyber Monday deals
- Big corporations spent more on marketing technologies than any other component of their marketing budgets. This comprised 26.2% of their budgets in line with their renewed interest in fostering better, stronger, and more sustainable relationships with their customers. The report by Gartner further recommends B2C companies to improve transparency, optimize digital channels owned, and build a reputation for being genuine with their customers.
Will Consumers Shop the Best Black Friday Deals This Year?
Earlier in 2020, IBM and the NRF reported on the rise of an emerging customer profile -- the so-called, “always-on” consumer. The study, which included close to 20,000 consumers spread across 29 countries, revealed that 71% are willing to pay a premium price to buy from brands that practice transparency.
A more important finding is that, with the growing options in and accessibility of mobile ecommerce, 35% of consumers buy on impulse at least once weekly.
Across industry studies about consumer behaviors, however, one theme resounds, and, that is, consumers want convenience. Tell-tale signs that ecommerce would soon take over retail have been written all-over and intensely anticipated for many years now. It was just a matter of time before it did.
In fact, what the COVID-19 pandemic did was make ecommerce takeover retail sooner. Actual reports in the previous section showing a steep rise in ecommerce sales from Q1 2020 support this insight.
What’s the future of consumer spending going to look like for the remainder of 2020 and beyond? Here are the projections you need to know:
Consumers are Spending Less
Although overall ecommerce sales are on the rise, consumers are spending on key categories only. This is a direct result of job loss and redundancies.
Since the effects of COVID-19 started to be felt in February 2020, an estimated 13 million jobs were slashed in the US. Although the US Bureau of Labor Statistics reports employment was up by 1.4 million in August, this continues to be down by 11.5 million compared to the February employment rate.
According to PwC, consumers reported spending the most on groceries, home entertainment, and home improvement projects. On the contrary, consumers have cut back spending on most other categories:
Many of the survey respondents also said they are buying more of these items online and taking fewer trips to make in-store purchases. About 18% reported a decrease in income amid rising expenditure on household bills.
Black Friday and Cyber Monday are Traditions
Black Friday was the most anticipated retail event for many years. However, take note of the operational word -- “was”.
For many years, shoppers endured long lines and massive crowds to take advantage of the biggest sale event. After all, Thanksgiving Weekend also officially marked the start of the Holiday season which set shoppers in a festive mood.
In 2015, about half of shoppers did most of their Holiday shopping on Black Friday. The numbers have dropped steadily since, showing only 36% continuing the tradition in 2019.
So, what happened?
- The customer profile changed and now they put more premium on convenience which means they prefer to shop online than endure long queues and ruthless crowds.
- More buyers are shopping before the traditional Black Friday sale.
- Retail sale events have been dispersed and many stores started to offer their products at discounted prices much earlier, thus Black Friday lost the hype.
Will Black Friday and Cyber Monday remain relevant in 2020? Perhaps, but definitely not in traditional ways. In any case, you need to be prepared to offer your best deals as early as possible because:
- Consumers will likely be more price-sensitive in their shopping behavior this year.
- Shoppers may have less to spend and they will be shopping for the best Black Friday deals.
- Your competition will be just as aggressive as you are to close sales and move their stocks.
- You want to establish a good reputation for your online store before the holidays kick in.
- You want to make sure your store is ready to make shopping convenient for your customers.
BFCM 2020 Will Rely More on Online Channels
Black Friday and Cyber Monday will continue to be in people’s psyche, for a while more at least. If you want your ecommerce business to make more revenue or at least make up for the possible losses you incurred for the most part of the year then you have to take every possible opportunity to sell, including BFCM 2020.
Even your will to sell won’t be enough, however, because a bigger portion of consumers will be buying from merchants who have enabled digital shopping options. These emerging buyer preferences are directly driven by the non-negotiable realities of the pandemic which has taught buyers to rely more on online stores for their needs, contactless payments, and deliveries or pick ups.
More New Online Shoppers Will Be Buying
Google estimates that half of US shoppers won’t be shopping on Black Friday 2020. Of the buyers who plan to shop for the holidays, about 75% expressed preference to complete their shopping online.
Despite the downward trend, ecommerce in general is on the rise. Whether or not you get to sell more come Thanksgiving will depend a lot on:
- Whether or not you can effectively reach your customer
- Whether or not you can create a need for your product and communicate it well
- Whether your ecommerce is enabled to deliver excellent and contactless customer experience.
Customers Are Buying from Trusted Retailers
Google further reports that buyers will research products and sellers online before they actually buy. This time of uncertainty may also spur a much-needed boost for small, local businesses. Google projects that the majority of shoppers (66%) will choose to buy local.
How to Boost Black Friday 2020 and Cyber Monday Deals
Needless to say, fighting for the attention of buyers will be more competitive this year than it ever was. You need to stay ahead and start earlier than Black Friday 2020.
Here are the top things that you can do to stay profitable in these trying times:
Create Omni-Channel Marketing Campaigns
So, you have a good product -- so what? Today’s shoppers are bombarded by information from all fronts possible. Each one distracts your potential customer from the message you are sending. How do you standout?
Give your customers a customer experience they will never forget. In the age of new normal, you want to capture your buyer personas from all possible touchpoints, whether that be your physical store, online store, social media account, mobile app, or any combination of these.
For instance, the Buy-Online, Pick-Up In-Store (BOPIS) omni-channel strategy has been hailed for a good few years now. Even retail’s biggest giants, in the likes of Walmart and Target have warmly embraced the trend for a while back. This year, BOPIS implementers have announced offering curbside pickups for shoppers who want to keep their risks of COVID-19 infection low but who want to save up on delivery charges.
If you are not yet sure how to implement Omni-Channel marketing for your ecommerce store, read more about your options on Shopify.
Communicate and Follow-Through
Every store owner, retailer, and marketer now know that personalizing customer service is the secret ingredient to earn customer loyalty. Beyond capturing your target client, you need a results-driven customer relationship management strategy that goes beyond selling, simply because it’s much more expensive to capture a new client than to retain one.
Based on an earlier report by the Gorgias team:
- 3 out of 10 customers will likely buy from your competitor if they encounter a bad experience buying from you
- 5 out of 10 customers will not buy again if they experience bad service
- 7 out of 10 customers will buy more if customer service is excellent
Find out more about how Gorgias can help you improve your customer retention rate, improve your reputation as a seller, and make your business more profitable.
Simplify Shopping for Your Customer
If you think that’s complicated, you should know that there’s an app for that if you build your online store on Shopify. There is an app on Shopify to customize your store exactly the way you want your customers to experience your brand and your product.
Among the basic goals to integrate in your shopify store are: make it easy to search your store, secure payments, improve fulfillment, manage grievances, and make sure that your customers never forget you. Ask them about their purchase, what they liked about your store, what do they wish you were selling --- build relationships and give them incentives for telling their family and friends about you.
Learn more about how to boost your peak season performance in time for Black Friday 2020.
Will Ecommerce Be Profitable?
While retail revenue projections for the year are generally grim, consumers will still want their share of the best Black Friday deals. The holidays are a tradition that will continue to inspire increased spending but, by how much, well only the spending public would know.
One thing remains for certain -- Cyber Monday and Black Friday Online Sales are set to skyrocket way beyond what in-store retail can sell. So, if you’re keen on nailing this forthcoming opportunity, you should have started your online store campaigns a long time ago. But if you haven’t, now is the best time to get your sales up and your stocks moving.
Need help? Gorgias is here to make sure you get the most out of Black Friday 2020 and beyond. Check out our BCFM ecommerce guide for more tips. Or, learn more about how good customer service is the key.
