With the pandemic shifting back Amazon’s Prime Day to the week just gone, the starting gun has been fired on what is set to be one of the biggest sales periods ever – with all the peaks that are usually spread across Summer and Autumn squeezed together like never before.
Whilst the period will get longer, the spending will be less as the impact of Covid-19 on consumers’ wallets looms large. The Black Friday period has been forecast to shrink by nearly a quarter (22%) this year, based on research by eCommerce consultancy Wunderman Thompson Commerce, yet online spending is set to surge. Overall spend during the Black Friday period is predicted to reach £5.5 billion.
And after nearly six months in and out of lockdown, eCommerce businesses are best placed to capitalise on this extended shopping period. The “Welcome to the Mega Peak” report, which surveyed over 2,500 consumers in the UK, shows over two thirds (67%) of Black Friday shopping will be done online, equating to a possible £3.7bn in overall online spend.
With nearly a quarter (24%) scared to go in-store today, this is likely to impact the high street (despite the percentage falling from 48% in July this year) while bolstering the online arm of many brands and retailers. However, the pandemic isn’t the only concern: a fifth (20%) of consumers say they will spend less during Black Friday due to concerns over Brexit.
Once again, it’s likely that the digitally native retailers will profit most; as Amazon kicks off this busy peak season with Prime Day, the company looks set to take an even bigger share of the pie for the rest of 2020.
On Black Friday in particular, 65% of spend will be via Amazon, up from 62% last year. A further quarter say their spending with the eCommerce giant will increase over the Black Friday period because of its performance during lockdown.
Hugh Fletcher, Global Head of Consultancy and Innovation at Wunderman Thompson Commerce, explains: “Against the backdrop of Covid-19, Brexit and an uncertain economy, 2020 looks set to remain tough for many consumers, despite the appearance of this new and elongated discounting peak. While consumers may not have as much disposable income as they did last year, what they do have, they are more likely to spend online – and could well see a record for the biggest digital spend on Black Friday ever. For businesses, this means that there has never been a more important time to get their online offering right.
“It’s also probable that Amazon, though deeply secretive about its sales performances during peak, will end up ‘owning’ Q4 – applying more pressure to those smaller businesses it is both competing against and looking to work in cooperation with. It’s important, therefore, for brands and retailers to ensure they have a balanced eCommerce approach: optimising both their own websites and social media, creating links with retailers looking to sell their products and increasing their visibility across all the important marketplaces. In one of the strangest years in online retail, businesses can ill afford to neglect this mega peak: it could be their busiest period ever.”
Readying for mega-peak
This week’s Prime Day has started the run up to Christmas is style, with sales up and shoppers showing they are keen to not only bag bargains, but also in need of some retail therapy.
Looking ahead to Black Friday, we can take a leaf out of book of 2019. Sure, things are very different this year, but it if anything we are seeing an exaggerated version of some of the key trends from 2019.
Ciaran Bollard, CEO at Kooomo, explains: “As the second wave of COVID-19 sweeps through the nation, alongside the vast economic uncertainty that comes hand in hand with this, it is anyone’s guess to how this year’s Black Friday will pan out. One thing we are certain of, however, is that the power is most definitely in the hands of the consumer, who is now extremely well-versed in online services. Retailers must therefore reflect on last year’s Black Friday to better understand consumer demand and learn from past mistakes if they stand any hope of remaining competitive amid this year’s cyber-weekend.”
In light of this, Bollard outlines his top four takeaways from Black Friday 2019 and how retailers can improve the overall experience this year.
Consumers opt for retailers who offer an omnichannel experience
“First and foremost, one of the most important findings from last year’s cyber-weekend is that omnichannel shopping grew by 43%. While many retailers might not think this is significant this year – with traditional footfall witnessing a dramatic decline over the past few months – consumers still desire synchronisation and access to products across a variety of sales channels, from online to in-store via Click and Collect services. Online shopping might have bridged the gap between safety and continued purchasing, but it still does not provide the instant gratification which Click and Collect services can satisfy to a certain degree. In short, the omnichannel experience is still important this Black Friday, it will just look different to previous years.”
M-commerce is increasingly popular
“Leading on from the omnichannel experience, M-commerce also witnessed an immense surge in popularity throughout last year’s cyber-weekend, calling for retailers to get to grips with every sales platform. This vast increase in demand is exemplified by a survey from Internet Retailing which found that M-commerce made up 71% of overall sales on Black Friday 2019. Ultimately, we expect this year will witness the largest use of M-commerce yet, meaning retailers must ensure their eCommerce experience is able to respond to demand with mobile-first design and checkout.”
Consumers desire a seamless online experience
“Another significant takeaway from Black Friday 2019 is that consumers lack patience when it comes to buying products online. In fact, research by Google found that poor-loading time caused 53% of shoppers to abandon their carts, thereby highlighting that consumers will simply switch to sites that already offer speed, reliability and ease of use. From hyper-personalised offers landing in their inbox to a fast and efficient checkout process online, improving the flow of the customer journey will greatly improve retailer’s competitive stance-point this cyber-weekend.”
It’s not all about discounts
“And finally – not what you would expect from an event centred around saving money – Black Friday is not all about discounts. Throughout cyber-weekend 2019, we witnessed a distinct shift towards offering alternative discounts such as free shipping and increased participation in events such as Green Friday and Giving Friday. Shoppers are a lot savvier and conscious than ever before, particularly in the current climate, meaning retailers must be considered about the discounts on offer. Promotions should be devised carefully, reflecting the ideals of the conscious user.”
The other lesson that we have learned from all peaks is that to win you have to keep your site running. This year, pressure on sites is likely to be even higher than usual.
So how can you be ready? Dan Middleton, Vice President, UK & Ireland at Veeam, suggests how you can make sure you are match fit and come out fighting for the mega-peak.
The Veeam 2019 Cloud Data Management Report found that on average, IT decision-makers (ITDM) from the retail, distribution and transport industries said their organisation had experienced six unplanned outages in the last 12 months, lasting an average of 77 minutes. Over an hour of downtime can have dire consequences on a retailer’s bottom line any day. During Amazon Prime Day, the impact would be even more severe. The same is true for transport and distribution companies, with demand for next-day, even same-day delivery services significantly higher than average. Any business which sees increased activity around Amazon Prime Day must act now to ensure that they are all systems go when the big day arrives.
Personalise customer service
Retailers know they must prepare for critical trading moments like Amazon Prime Day, Black Friday and the lead up to Christmas. However, it’s not only about being always-on and available during these flashpoints. The retailers who are able to provide personal and tailored interactions with customers over these periods will stand out from the crowd. Over half (52%) of retail, distribution and transport ITDMs believe Cloud Data Management will transform their organisation’s customer service. Moreover, 51% say it can increase customer responsiveness. Deploying Cloud Data Management will help customers maintain their highest levels of customer service, even during their busiest times of the year.
Provide instant gratification
Retailers must ensure their IT systems are scalable and are ready to deal with the uptick in traffic which sale-intensive moments bring. Three-fifths (60%) of ITDMs said their organisation is unable to meet its digital challenges due to legacy systems and technology. As shopping habits are driven more online and mobile-first – particularly in light of the pandemic’s impact on physical shopping – retailers risk losing their customers if they do not have the proper IT infrastructure to support a seamless experience which gives shoppers instant gratification. With consumers refusing to wait more than a few seconds for pages to load, retailers must be ready to achieve new levels of speed and agility.
Learn from the data
The online shopping experience is about more than just the point of sale. It’s everything from the first engagement with promotional marketing, to enticing television advertising, an enjoyable browsing experience, and eventually, receiving products on time, beautifully packaged and in working order. Over half (57%) of retail, distribution and transport ITDMs say Cloud Data Management is helping their business plan more effectively in these areas. Like all businesses, retailers need to listen to what the data is telling them: what are they doing well, what should they dial up, how can they improve, and what should they stop doing altogether?
Bring digital skills on-board
For retailers and distributors looking to enhance their businesses by deploying Cloud Data Management, it’s vital that they have the right skills on-board to manage these systems. Over half of ITDMs from these industries say there is a clear lack of digital skills within their organisation, with 94% agreeing that upskilling existing staff is vital to their organisations’ success in the next few years. As well as technical personnel who can ensure that the business’ digital infrastructure is fit-for-purpose, data-driven businesses will on-board data scientists and analysts to extract key insights from the vast pools of data at their disposal.