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PEAK 2017 Counting down to Black Friday

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The way people shop over Black Friday and the Christmas period tells us far more than how people are getting on with their present shopping. The changing way that shoppers are buying becomes magnified thanks to the sheer volume of transactions at this time of year. In addition, time-pressured shoppers look for, and adopt, new ways of doing things that they may then continue over the rest of the year. With this in mind, InternetRetailing is devoting a regular twice-weekly slot to peak shopping season 2017, highlighting the stories that struck us as most interesting over the last few days. Today the focus is firmly on the approach to Black Friday.

Do check back since this piece will be updated regularly over the coming days.

Black Friday forecast

Online spending is predicted to reach £7.42bn over the coming week (November 20-27). The figure, from etail trade association IMRG, is 15% up on the £6.45bn spent at the same time last year, and includes £1.35bn expected to change hands online on Black Friday alone. That’s 9% more than last year.

Pre-Christmas discounting has already started: IMRG said that by the start of last week 80 of the 210 retailers it tracks were already running discount campaigns, with 46 offering discounts of 30% and more. But it also notes that of those, only six were marketed as Black Friday events, and that many made no mention of Black Friday campaigns in advance of peak week, since this might deter shoppers from earlier spending.

Andy Mulcahy, strategy and insight director at IMRG, said: “Black Friday has created this idea that there is ‘a time’ to shop in the lead-up to Christmas, but this has resulted in a lull in sales activity preceding Black Friday week. Consequently, many retailers are already running discount campaigns well in advance of the Black Friday week to help stimulate sales – we are tracking 210 UK retail sites daily throughout November and, on Monday 13 November (one week before the peak week begins), 80 of them were actively promoting discounts on their homepages. Of that 80, just six were marketed as Black Friday events, three mentioned that their Black Friday event was coming soon and five used the term to run associated, but not actual, Black Friday campaigns – such as ‘the Black Friday warm-up…’ or ‘why wait for Black Friday…’. It’s also become common to use black backgrounds to campaign imagery to imply it’s Black Friday, but without overtly mentioning it.

“What’s interesting is that some of the discounts on offer are already very high – of the 80 actively promoting discounts, 46 had ‘up to 30%’ as their headline discounts with 33 of those marketing 50% and over. This raises some interesting questions; will the deals on Black Friday be bigger than that, or are deals that are just as good already available? Will shoppers realise they can get really good deals throughout November anyway and adapt their purchasing behaviour, or will the psychological power of the term ‘Black Friday’ make them delay spend in anticipation that it’s still ‘the’ time to shop? And finally, based on the data above, does Black Friday now technically last for the whole month of November, just without using the name necessarily?”

The IMRG points out that the Black Friday period is getting longer, extending from a one-day event when it was first introduced by retailers including Amazon and Asda in 2010, to four days in 2015, and a week in 2016. That’s expected to continue this year.

And the cost of returns

While Brits are expected to spend £3bn on Black Friday, delivery experience company Sorted, warns that this ‘sales’ day could cost UK retailers £203m in returns caused by failed deliveries.

Original data from Sorted’s latest Coming Together: The Blue Print For Collaborative Commerce Report, which mapped the buying behaviours of over 2,000 UK shoppers, predicts that Black Friday alone will see £1.01bn worth of online deliveries fail – either arriving too late or after the allocated delivery slot promised by the retailer. This, Sorted estimates, will result in £203m of products being returned to retailers.

Black Friday returns present a critical issue for retailers as items that are sent back become stuck in a ‘returns loop’ as they are processed back into a retailer’s system. This means products become unavailable to buy just at the moment a retailer wants to sell in the Christmas trading period. Often, they come back on the shelf in January – already a period of further discounting – and then can’t be sold at full price, reducing retailers already squeezed margins.

David Grimes, founder and CEO at Sorted, said: “Consumers already expect immediacy of delivery at every stage of their buying journey – indeed, our recent research showed two fifths of UK shoppers won’t wait more than 24 hours for a delivery, suggesting that even ‘next day’ fulfilment options no longer adds value to online shoppers.”

“And, with the frenzied buying behaviours associated with flash promotions, such as Black Friday, this just compounds the sense of urgency around speed of delivery. Consumers already want ultra-fast fulfilment and this is just exacerbated on Black Friday – with failed Black Friday deliveries which don’t meet shoppers’ expectations around speed costing UK retailers £203m in returns.”

Emerging technologies

Consumers plan to shop online this Christmas, and are considering using emerging technologies such as Amazon Echo and Google Home, according to research from Accenture.

The Accenture Holiday Shopping Survey questioned 1,500 UK consumers and found that 37% planned to spend more than they did over these holidays, and that 89% will spend the same or more this year than last.

More than six in 10 (61%) said Brexit had affected their spending habits, while 40% of respondents said the convenience of online shopping would have a positive impact – more than double the number who said that a good in-store experience (18%) will have a positive impact. Overall, 81% of consumers planned to do their shopping online, with 79% checking Amazon before looking or buying elsewhere.

Consumers said they were prepared to experiment more with new and AI-powered technologies. The survey found that significant numbers of UK shoppers are now familiar with mobile payments at the checkout (88%), voice commerce services like Amazon’s Alexa (81%) or Google Home (67%), chatbots (46%), and even virtual mannequins to see what clothes look like before they buy (34%).

More than a quarter (28%) of respondents said they would actively choose drone delivery over other delivery options if it were offered, both because it is easier than collecting in store and because they see drones as cool and exciting. The research found that while shoppers of all ages are embracing newer technology, older millennials, aged 28-37, are the most likely to embrace it.

“Our research shows that AI-powered technology is an increasingly familiar feature of everyday life,” said Jill Ross, a managing director in Accenture’s UK Retail practice. “As AI and the internet of things make online shopping easier, customers are increasingly likely to purchase ‘commodity’ items, such as shampoo, through their connected devices. But while technology can help drive sales, true differentiation will come from a clearly defined brand purpose that builds trust with a customer. Retailers that understand when their customer wants to interact with AI and when they are looking for the human touch will be the ones to win the sale.”

As more consumers use technology for the bulk of their Christmas purchases, the security of personal information remains a concern. Half of respondents said they are worried about the safety of their data when making online purchases, and 59% said that this affects the brands from which they choose to buy.

This comes as retailers prepare for the General Data Protection Regulation (GDPR) in May 2018.

“Under GDPR, retailers will face new requirements that will compel them to completely review their approaches to customer privacy and rethink the value exchange,” said Ross. “The attitude of ‘If I give you consent this is what I will get in return’ will start to drive how consumers think about sharing and how they select the brands they share with. To build trust, retailers need to be transparent and responsible about the use of customer data, using it in a way that clearly provides a better experience or more value.”

Website speeds ahead of Black Friday

Summit benchmarked the Black Fiveday readiness of ten retailers ranked Elite and Leading in IRUK Top500 research. Among them were Debenhams, Asos, Halfords, Marks & Spencer, Boots, Mothercare, Currys, House of Fraser, Screwfix and John Lewis.

Summit [irdx vsmt] measured desktop and mobile website load times in the two weeks ahead of Black Friday. Zdenek Burda, Chief Technology Officer at Summit, summarised the findings.

  • The average desktop load time was 6.2s and 8s on mobile for first time visitors

  • The average desktop load time was 3.2s and 5.5s on mobile for repeated visits. That’s a 49% increase for desktop and 31% for mobile

  • Time-to-first-byte was 0.6s for desktop

  • Time-to-first-byte was 1.7s for mobile

  • Two out of 10 retailers (Asos and Marks and Spencer) stood out with a desktop load time of about 3s. This is considered industry standard for first-time visits

  • Eight out of 10 retailers stood out with a desktop load time of about 3s. That’s considered industry standard for repeated visits

  • Three out of 10 retailers (Debenhams, Asos and Halfords) stood out with a mobile load time of about 3s. This is considered to be industry standard for repeated visits

Cart abandonment rose ahead of Cyber Week

Cart abandonment between November 1 and 14 rose by 4%, according to commerce consultancy Salmon [irdx vsmn]. It suggests this increase shows that consumers are adding to their baskets but waiting instead for the Black Friday sales to buy. Conversion rate dropped at the same time, suggesting that a greater proportion of sessions where no order is placed.

Salmon says Black Friday could soon become a month-long phenomenon that will overtake December as the biggest shopping month of the year, as retailers compete for a slice of the new ‘peak’ trading season.

James Webster, head of managed services at Salmon, said: “Retailers should by now have put in place the proper planning, due diligence and system testing on their websites to cope with the Black Friday rush. The bargains are no longer confined to just one day though, or even one week necessarily. As companies such as Amazon stretch their deals further back to a fortnight, retailers should be preparing early to create an ongoing experience and grow that invaluable customer base and loyalty, pipping their competitors to the post.”

The importance of insights

Duncan Keene, UK managing director, ContentSquare, says it’s important to learn from how shoppers buy during Cyber Week.

“Consumers shop very differently on Black Friday; it is all about speed – finding products fast, ensuring delivery options fit and checking out smoothly,” says Keene. “There is no tolerance for confusing offers, for convoluted delivery messaging or check-out processes slowed down by add-on offers, or options to sign up for loyalty schemes. That is a different message for a different day. To make the most of Black Friday retailers need to get the fundamentals of the experience as slick as possible – and nothing more.

“It sounds so straightforward – yet in a market where UX teams have little insight into problems due to the sheer volume of data and test based on best practice and intuition at best, ensuring the fundamentals are working perfectly is difficult. How well prepared, for example, is the mobile site? During the holiday season, the conversion rate more than doubles on mobile, signalling that more users buy this way when they have a feeling of urgency – and it doesn’t get much more urgent than Black Friday.

“What is required therefore is a way to gain rapid insight from the existing data resources. And that is where AI and machine learning are set to play a vital role in transforming the day to day activity of eCommerce teams. In contrast to manual data mining techniques that can barely scratch the surface of eCommerce data, AI can transform speed to insight. Whether through mining the entire checkout process and then surfacing immediately both a problem and its location; or looking at different areas of the page to identify those that don’t get clicked on very often but convert well when they do; AI can provide rapid insight into the priority areas that need to be tested. Essentially, AI can find the issues quickly – enabling organisations to focus on delivering the right Black Friday experience, from reducing journey length to improving signposting and ensuring the guest check out is easy to find and use.”

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