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GUEST ANALYSIS Unlocking the power of FOMO this Black Friday

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Retailers have been taking advantage of the psychological effect of FOMO (fear of missing out) for centuries, from flash sales to product scarcity.

Some online retailers have even built their entire businesses around the concept. Offering heavily discounted, coveted items for short amounts of time, high end fashion outlets BrandAlley and The Outnet have turned this into a hugely effective model. While a few weeks ago we saw a host of tactics used to create a sense of urgency during the Chinese shopping event, Singles Day. Within the first five minutes, retailer Alibaba had driven its customers to spend more than $1bn.

The power of FOMO today is just as clear among offline shoppers, with the emergence of pop up stores and limited edition designer collaborations. The former are particularly successful when a high end retailer joins a popular, yet far more affordable and accessible brand. Take the Kenzo and H&M collaboration, for example, which sold out in store within minutes and crashed the website.

It’s clear that deploying these tactics can be hugely effective in nudging shoppers over the line, especially during peak shopping periods. The challenge for retailers is not a matter of whether to use these tactics, but how and when to use them intelligently to ensure they have the biggest impact. Here are a few considerations for any retailer looking to engage with customers during a peak period.

Understand before you FOMO

Efforts to nudge your customers to convert during peak periods will be wasted if you don’t fully understand them. This goes beyond relying on demographic information like age and gender data, which often amounts to less meaningful customer experiences, and instead gathering an understanding of actual shopping behaviour and intent.

We all know that customer shopping journeys are complex and can take place across multiple channels and devices, off and online. To complicate matters, however, consumer needs, desires and tastes change fast and marketers can often find that what they know at any one time can be meaningless a few minutes later. Ensuring data flows seamlessly across a business in real time, from call centre to website, is really hard and requires cross functional collaboration and the tools to make it happen.

Use the right tools

Once you have gathered this data and segmented your customers you can then create personal experiences using the right tools for each customer. We know that low stock pointers, for example, are a particularly powerful tool, driving an average 3.2% uplift in conversions, according to our data. If you only have a certain number of items left, displaying this information can encourage those customers who have previously shown interest in that item, to convert.

Countdown clocks and sales timers can also be hugely impactful within the right context and typically deliver 3.1% and 2% uplifts in conversions respectively.

Beyond timers and counters, take advantage of content to create suspense. A great example last year was from designer lingerie retailer Journelle, who created an Advent Calendar in the run up to Christmas. Featuring a new product every day, it was a non-traditional way of creating suspense and increased both conversion rates and average order value.

Use who they know

Social proof, showing customers what their peers have recently purchased or are currently viewing, is also a powerful way of creating a fear of missing out. It can give shoppers the confidence to make a decision, particularly when buying gifts for someone else. Fashion retailer Stuart Weitzman used this concept by tracking their most popular products and updating them regularly on a ‘hot list’ on their homepage. Visitors received the social reassurance from fellow shoppers, and converted.

Pick the right peaks

The number of UK retailers who think that Black Friday sales are unprofitable and unsustainable rose from 32% to 61% over the last 12 months, according to new data from LCP Consulting, but how many of them have actually made the bold decision to opt out on Friday?

Before making any decisions, take the lead from your data. It may make more sense to focus on another peak period during the year – consider creating your own peak like Amazon did with Prime Day, or even ditch discounting for a renewed focus on more seamless, personal experiences for your customers.

Those who will win the battle for spend and loyalty this Friday will be the retailers who engage with their customers at the right time and in the right context. Not taking this strategic, personalised approach may mean little impact and even keep the returns department unnecessarily busy in the following months.

Geri Tuneva, head of marketing EMEA, Qubit

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