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After an incredibly challenging year, the upcoming Black Friday sales on the 27 November presents as an attractive opportunity for engaging new customers. However as both a non-Australian event and a sale that typically involves lucrative discounts, participating in Black Friday may not actually benefit your business’s margins.
This week we ask: Black Friday – to participate in sales or not?
Colin Birney, Head of Business Development, Square Australia
After an extraordinary 2020, Black Friday is a significant opportunity for retailers still recovering from government mandated lockdowns, operating restrictions and changing consumer behaviour. The key to success, however, is not simply eye-catching discounts but carefully considered preparation. Health and safety remains a top priority for Australian consumers, so to meet and exceed customer expectations, create a solid COVID-Safe plan that includes the provision of sanitiser and PPE, displaying visual guides and decals, and prioritising cashless payments. With health and safety measures in place, rely on your payments technology to analyse stock, recognise potentially busy periods and identify products that could be popular this time of year. It’s also important to note that a seamless omnichannel presence is no longer a luxury, but a necessity. Establishing an online store and offering click-and-collect options create a convenient, effective experience for any shopper. An approach that prioritises safety, enables you to leverage data, and refines your omnichannel strategy will give your business the edge it deserves to make the most of Black Friday and holiday shopping season.
Shaun Broughton, APAC Direction, Shopify Plus
Shopify’s research shows 61 per cent of Australians are planning to participate in the Black Friday Cyber Monday sales this year, and more than a quarter of those shoppers are already looking for deals. This year will undoubtedly be different to any sales season so far, but the trends we can bank on are the growth of ecommerce and online shopping, and the imperative for retailers to prioritise online customer experiences.
Black Friday Cyber Monday will present a significant opportunity for retailers to benefit from the buzz and excitement of an international shopping extravaganza. While it will be tempting to look solely at pricing and discounts, the best way retailers can prepare is by ensuring they have the right technology and infrastructure in place to manage significant spikes in website traffic, while also analysing their customer data to understand what kinds of customer experiences will be most valuable to their customers at this time.
Tunc Bolluk, VP APAC, Validity
Black Friday presents a significant and lucrative opportunity for retailers after what has been a very tough year. Last year, Black Friday saw a 34.4 per cent increase in online sales compared to the year before. And as a result of the pandemic forcing many traditionally offline customers online, we’re expecting to see record-breaking levels of online sales come November 27.
Almost every retailer will be offering shoppers some kind of online promotion or deal, so with increased competition, retailers must focus their efforts on cutting through the noise to capitalise on this major shopping event. One area where retailers would do well to focus their efforts is their email marketing strategy.
Email is the most cost-effective channel for generating consumer website traffic – driving 11 per cent of all global retail traffic and accounting for 69 per cent of all returning traffic. Keep in mind though that with increased email traffic, mailbox providers will have their work cut out for them trying to determine what’s SPAM and what’s legitimate, so it’s very important that retailers take the necessary steps to ensure their emails actually reach customers and aren’t incorrectly marked as SPAM or fraudulent.
Gordana Redzovski, VP APAC, Vend
Once considered a North America-only event, Black Friday is now a lucrative day on Australia’s retail calendar. Data from Vend retailers reveals both revenue and the number of customers participating in Black Friday has increased steadily during recent years. And this year, in particular, the event carries even greater significance as retailers look to capitalise on the shopping phenomenon after a period of extraordinary disruption. However, participating in the event doesn’t have to mean competing with big box behemoths like Amazon by offering eye-watering discounts that barely cover your costs. Instead, appeal to Australia’s strong ‘shop local’ sentiment by spotlighting the bespoke nature of your products. Promote the quality of your materials and products, why they make beautiful gifts for meaningful people, share glowing reviews and the story behind your business and what it stands for. Be proud about your business, what you sell and why, and you will likely see Australian shoppers develop a stronger affinity to it when Black Friday arrives.
Shannon Ingrey, VP and GM APA, BigCommerce
The upcoming holiday sales period – including Black Friday and Cyber Monday – is expected to be Australia’s biggest ecommerce period in history. Australian ecommerce businesses should prioritise participation – or risk a slow Christmas sales period.
For retailers disrupted by COVID-19 throughout the year, running sales could be a saving grace – an opportunity to boost cash flow and move stock. For retailers that have successfully navigated the challenges of the year, it will be an opportunity to capitalise on ever-eager online shoppers and build the foundation for a strong 2021.
In a year filled with uncertainties, customer loyalty has been tested and consumers have become more purpose-driven than ever before. Ultimately, these sale days drive online traffic and can play a key role in helping retailers to expand their reach and cement existing customer relationships. Given the level of competition retailers will face, preparation is key – their platforms and technology should be scalable and secure enough to meet expectations and demand – or they risk missing out.
Martin Filz, CEO, Pureprofile
This Christmas is set to be a year of less socialising, less travelling and less spending. At Pureprofile, we recently published a report that focuses on how COVID-19 will impact this festive season and we’ve found that one in ten Australians (10 per cent) won’t be buying any gifts at all this year – almost double when compared to 2019 (6 per cent). Just 20 per cent stated that they would be spending over $500 on presents this year, which means the majority of Australians will be watching their wallets. Many of us (82 per cent) are also planning on spending the holidays in our own state. While overall spending will be down this year, the Black Friday sales do create an opportunity. For customers sticking to a strict budget, it will be a time to get presents at a reduced rate and possibly save a little more. For retailers, it might be an opportune moment to move items that have been stockpiled throughout the year. A word of caution for shoppers; check where your goods are coming from. This could affect delivery times during a period where we have seen huge growth of online shopping. If you are expecting something by a certain date, be sure that it will arrive on time.
Dean Vocisano, Country Manager Australia, ShopFully
Like many industries, the Australian retail sector experienced a shift this year where digitisation of products and services was accelerated for consumers to continue shopping in-store and online. But let us not forget, there are already existing calendar moments like Black Friday that can help facilitate this customer journey to drive engagement and brand loyalty in the long run.
By understanding data, retailers have a prime opportunity to appeal to the right consumers who are ready to spend – such as, knowing what digital medium is best-suited to drive foot traffic to a brick-and-mortar store. Or, considering 77 per cent of Aussies think about gifting before December, brands might tailor their Black Friday promotions, personalised offers and communications to drive early present purchases.
Constantine Frantzeskos, CEO and Founder, PENSO
Black Friday sales are a great way of attracting more people who are “in the buying mood”, so there is a strong chance you are going to get customers visiting your site for the first time. Give them a good impression of your website, brand and business and try and turn them from a customer to a client. Here’s a few other simple do’s, as well as don’ts, when it comes to participating:
- More than discounts: As much as there’s a perception that Black Friday is all about discounts, it’s not. If you solely offer discounts, you’ll attract “promo pigs” – people who look for the lowest price, suck your margin and move on. You’ll erode your margin terribly; no margin, no mission. Drive sales with exclusivity, urgency, access, value and price.
- Create a value exchange: Offer discounts or special access if the potential customer does something in return, such as sharing on social media or entering their email address
- Don’t spend too much effort promoting deals to your existing customers – especially those that are your high-frequency purchasers. These customers will most likely find you anyway, and all you’ll end up doing is giving away margin to purchases that would have already happened. Instead, focus on reaching new audiences.
- Don’t think that just because you’re not a retailer of goods that you can’t offer Black Friday Deals. If you have vouchers, gift cards or pre-payments – offer them up!
Ben Rohr, COO, Eve Investments
Figures from Australia Post across the 2019 Christmas period last year found that burgeoning online sale events like Black Friday had grown at an unprecedented pace with online spend in the two weeks to Christmas 18 per cent higher than previous years. For local Australian businesses, that’s an opportunity that can’t be missed.
Black Friday can also be an important opportunity for new entrants in the market to start building out their presence and see an uptick in sales.
Meluka Australia has a US presence and for any Australian business thinking about scale and international reach, you cannot be selling online in that market without participating in Black Friday in a meaningful way. We took part last year and will be participating again this year and hope it is successful.
In November last year, our US Amazon sales increased by 20 per cent from October 2019 due to Black Friday and we are hoping for a similar result this year.