6 Tips for your Black Friday shopping
Black Friday and Cyber Monday are relatively new concepts in the South African market. That being said, 87% (almost 9 out of 10) of consumers in South Africa know what Black Friday is.
There are some mind-blowing stats that have come out of Black Friday and Cyber Monday in South Africa:
- In 2019, sales were up a whopping 2 571% on Black Friday compared to any other day in the year in South Africa.
- Pre-Covid, 15.5% of all shoppers indicated they will look at online channels only for deals whereas 64% will look at omni-channel chains (Online and Brick & Mortar store). This will undoubtedly change in 2020 as a result of the current COVID Pandemic.
- In 2019, an average of R1 654.00 was spent by each South African consumer on Black Friday with a specific focus on clothing, shoes and electronics.
The question from many of our retailers is: “how do we prepare, manage and regroup after Black Friday (afterall, everyone wants a piece of the 2.4 million people shopping on the day)”. Here are a few tips and tricks to get you through the peak.
1. Understand the real value of Black Friday
We often find ourselves in meetings post BF/CM where our merchants are very happy with the massive turnover that Black Friday delivers. That said, if they sold 1000 items at R100 on a normal day and those same 1000 items are then sold at R45, the revenue shortfall is R55 000, which is a significant amount of money for a small business. Also imagine this scenario tenfold - R550 000 is nothing to scoff at.
If we shift KPIs from revenue to customer acquisition, then BF/CM can be leveraged to deliver a longer term upside to any business in terms of lifetime customer value rather than just revenue on the day. The value of the new customers you acquire can quickly overtake the low margins made on the BFCM weekend. Let’s assume you acquire 2000 new subscribers via popups or push notifications, it would be better to gauge the lifetime value of these new potential customers over the course of the next 12 months than to only look at the margin impact on the actual day of Black Friday. Using these 2000 subscribers, you could forecast that 16% would potentially come back and purchase repeatedly over the next 12 months. Those that were just deal hunting would more than likely unsubscribe, but those that stay subscribed more than likely have a genuine interest in what you are trying to sell. The crux of Black Friday is that your campaigns should not be revenue driven, but rather your campaigns should focus on capturing new long-term customers.
2. Your planning should have started already
If you haven’t started planning, we would suggest you get going asap. Try and have your artwork, promotions, emailers, ads and customer service teams ready by mid-November. The power of online is that most of these campaign points can be automated, and powerful tools such as Mailchimp and Facebook Ads Manager allow you to set things up well in advance. The last thing you want to be doing the day before is fumbling around because, let’s face it, things will go wrong.
3. Customer service is key
If you don’t have a customer service team, we suggest cancelling any plans you have over the BFCM weekend. Many of you reading this would have experienced some sort of annoyance over the last BFCM, whether it be items going out of stock, slow sites or payment gateways not working. The reality is that some things will be out of your control, however the customer does not care and is judging your store on its ability to fulfil a need on the day. How you handle customer interactions over this period will directly impact on the longevity of returning customers. Great service and going above and beyond are key to growing your business.
4. There are going to be delays
For those going into their first BFCM, the truth is that there are going to be delays. As ecommerce demand has grown in South Africa, the courier companies have done well to keep up, however the trend over the past 3 years is that orders will tend to take 7 to 9 days to arrive due to the shear volume and backlog that they experience. Additionally, payment gateways will lag so make sure you are offering customers multiple checkout options. An average medium sized store should expect between 100 to 250 orders on the day, which all need to be picked, packed and shipped. On this note, remember to communicate clearly on your site that Black Friday deliveries will take longer due to the courier companies being at capacity.
5. Make sure your site is fast, clean and easy to navigate
How long do users stay on a web page? Most stick around less than 15 seconds. That's how long you have to capture someone's attention on your website. So, if you don't do that in less than a quarter of a minute, you've lost them. Make sure that your site loads in under 6 seconds and that your navigation / user experience allows the user to get to a product in under 3 clicks. For those of you not on Shopify (sorry for you) there is a good chance your site will crash. For retailers using Magento or WooCommerce, make sure that you chat to your hosting providers to up the amount of resources available to you. You can also make use of CDN services such as Cloudflare.
Just as a final note and maybe a thought for 2021, if you are not flushing old stock, you can also look at the option of purchasing specific Black Friday stock. This can be a great way to manage margins and allows for previously unseen stock to hit the rails bolstering your inventory over the period.