In the never-ending quest to increase footfall and boost retention, seasonal events are becoming a greater focus for retailers. While the likes of Easter, Christmas, Back to School and Halloween are the more established fixtures on the sales promotion calendar, one-off shopping events, like Black Friday, have increased in popularity.
A US import, Black Friday began as a one-day sales event, but has since grown to encompass a few days, with many retailers now rolling their promotions into the following week. Even though the event doesn’t necessarily resonate with UK consumers in quite the same way as our US cousins, shoppers have certainly been taking advantage of it since it hit our shores. And one thing is certain: Black Friday has the positive impact of driving footfall into stores at what was previously a relatively quiet period before the run-up to Christmas.
Be all and end all?
If you consider how much consumers have spent on Black Friday over the last few years, the figures undoubtedly support its popularity. In the UK alone, shoppers parted with a staggering £7bn across the Black Friday period in 2018. Despite the impressive sales figures, not all retailers have bought into the event, with many actively choosing not to participate at all. FatFace, for example, instead donated money to charity, while B&Q and Asda both declared that they instead wanted to focus on delivering year-round low prices and value.
While these may all be honourable standpoints, many retailers simply cannot afford to miss out on this well-needed boost in sales. Black Friday is still a key revenue driver for many retailers, but is it really helping them to achieve their goals of increasing footfall and boosting customer retention?
There are a number of elements that retailers need to take into consideration when delivering campaigns to support large-scale sales events.
It’s important that retailers consider how a given promotion affects consumer behaviour both in the lead-up to and follow-on from the event. Shoppers may delay a big purchase in anticipation of a discount, or they may bring their Christmas spending forward to November, in effect flattening out the benefit from the sales event itself. Retailers should look at historical data to understand any patterns in shopping behaviour before executing any campaigns.
Don’t forget about personalisation
It’s a fact that consumers are more likely to remain loyal to a brand if they receive offers and promotions that are relevant to them. However, personalisation is often an element that’s overlooked when developing mass promotions for major sales events like Black Friday. After all, it is a challenge for retailers to offer highly personalised and targeted offers as part of the event of a significant sales.
Selling high volumes of products at deep discounts may have a positive short-term benefit for retailers. But, there are dangers. Retailers need to maintain the momentum built by these events and not lose sight of longer-term goals such as attracting customers back into store or online after promotions while giving away less margin in the process.
Engagement is still key
One way to do this is through a more engaging communication programme, where customers are rewarded for their loyalty with incentives throughout the year. This is where personalisation can be deployed more effectively. This could include targeted offers delivered through different channels, such as personalised coupons or receipts handed out at the point of sale, as well as digital promotions.
These offers can be distributed to customers before big events like Black Friday to attract them into stores or online, without compromising on margins. Alternatively, they could be given to shoppers during Black Friday promotions to encourage return visits and repeat sales in the future.
Large-scale events, such as mass advertising, will always have a role to play in retail, however, it would be dangerous to rely on them solely. Shopper behaviour can change dramatically from one year to the next, so there’s no guarantee that what worked in the past will work as well a year later.
These events should always be considered as part of a much wider, longer-term approach; one that focuses on increasing footfall, boosting engagement and improving retention. Tactics like personalisation play a crucial role here, adding that critical missing ingredient and providing retailers with significant competitive advantage; especially when delivered in a timely, relevant way. By leveraging the data available to them – both real-time and historic – retailers can ensure that they are maximising the potential of any campaigns, not just for a short-term sales event, but far beyond into the future.