In collaboration with our colleagues at InternetRetailing, we are collating some of latest noteworthy stats and analysis of the forthcoming peak period. As useful information arrives, we’ll update this piece.
Digital commerce consultancy Salmon predicts that UK retailers will collectively take more than £1bn for the first time on Black Friday 2015.
Webloyalty says sales made over the course of Black Friday and Cyber Monday will come to £1.6bn this year. Through its research partner Conlumino it questioned more than 2,000 consumers and found that 77% of Brits had now heard of Black Friday and 57% intended to shop on the day itself. However, says Webloyalty, retailers must take care that the day is a profitable one for them.
Guy Chiswick, managing director of Webloyalty Northern Europe, said: “Last year 42% of shoppers brought forward purchases that they would have made at a later date, signalling the surge of interest amongst consumers around Black Friday.
“Retailers need to wake up to this displaced spending and be very careful not to cheat themselves of revenue. The consumer is far more likely to be the winner here, but they still need to be careful not to be sucked in by the hype and make sure they’re getting the discount they want to see.”
Adobe’s 2015 Adobe Digital Index Online Holiday Shopping Prediction report suggests that UK consumers will spend £17.7bn online this Christmas, 7% more than at the same time last year. Black Friday will be peak ecommerce shopping day, with £474m spent that day alone. It says 57% of Christmas shopping this year will be online, and 23% on mobile devices. Some 24% say they will spend less time buying, thanks to ecommerce.
Last year, according to the IMRG, shoppers spent some £810m over the course of Black Friday 2015 – making it the UK’s biggest-ever online spending day. The amount spent on the day itself lifted overall sales in November 2014 by 37% compared to the same month in 2013, IMRG figures suggested.
The day was also marked by site outages and queues to get onto the most popular websites, while it was followed by logistics delays that the IMRG later said amounted to a retail tsunami.
Logistics at the heart of things
The John Lewis Partnership said in half-year results out in September that logistics would be the issue to it to get right for this year’s Black Friday. “Black Friday and Christmas will again be defined by the importance of logistics and operational excellence, coupled with ensuring our shops remain the “must visit” destination on the high street,” it said. “We go into the second half with confidence in both our ability to deliver outstanding customer service and in our strongest-ever product assortment.”
Argos has put its money into its developing own Fast Track same-day home delivery service, unveiled in October. It’s taken on 3,300 drivers, who will also act as a friendly doorstep point of customer contact, to staff the service. That figure includes 1,000 for the Christmas season alone. The service is built around the retailer’s command of the single view of its inventory, across channels, and the hub-and-spoke store fulfillment logistics model it’s built up in recent years.
IMRG/MetaPack claim retailers are expecting fourth quarter growth of 20%, with sales on peak days up by 30% on Black Friday and Cyber Monday. Doddle also forecast it would handle as many as 600% more parcels in the peak Christmas period, compared to a normal week.
The scale of staffing up
The Argos investment in seasonal drivers comes as the general merchandise retailer takes on 9,000 staff for the Christmas shopping season. Others will provide a boost in staffing at its stores, including its 20 digital-format stores found in locations including Cannon Street tube station and branches of Sainsbury’s supermarket.
Meanwhile, Amazon says it has taken on 700 permanent staff at its UK fulfilment centres this year and will take on thousands more Christmas.
Some estimates reckon as many as 100,000 temporary workers are needed to keep the retail delivery network ticking over, while others highlight a shortage of lorry drivers (maybe as many as 60,000 are needed) as problem facing the sector not just now but for the future too.
Not just Black Friday
eBay Enterprise says retailers should be ready for a second online shopping peak two weeks after Black Friday. According to its Peak Preparedness report, there was a second peak week after Cyber week in the run up to Christmas 2014. Its data shows a 30% average growth year-on-year between October and December over the past three years. Cyber Week sales peaked dramatically, but in a second peak week two weeks later, online conversion rates were 74% higher than the average Christmas period rate in 2014.
Enda Breslin, European head of business development at eBay Enterprise, said: “Black Friday and Cyber Monday are now firmly established on the UK calendar and every retailer plans for them, but our study shows another lucrative opportunity for retailers in mid-December. Conversion rates are higher at this point in the Christmas cycle because shoppers are much more focused; they have already researched their likely purchases and shopped around. Savvy retailers should be primed to cash in on this.” The study also pinpoints two particularly busy times from 2014: 7am to 10am on Black Friday, and 7pm to 10pm on Cyber Monday.
In two minds
Consumers are split as to what they think of Black Friday and similar discount events. While 31% ‘like’ or ‘love’ these chances for a bargain, and 30% of online shoppers are ‘likely’ or ‘very likely’ to shop during this year’s Black Friday, 30% ‘don’t like’ or ‘hate’ them, according to IMRG and eDigitalResearch analysis.
Some 20% of 2,030 online shoppers questioned said they had shopped on Black Friday last year, with 55% shopping online. Some 85% of previous Black Friday shoppers said they were likely to return this year.
Andy Mulcahy, editor at IMRG, said: “Black Friday caused a seismic shift in the established Christmas shopping trends last year, even for those who didn’t participate in discounting at all. It has changed the complexion of the peak period, putting a far greater emphasis on discounting, which shopper attitudes currently seem to be very evenly split on. All the indications are that it’s going to get even bigger this year, so there are some key issues that need to be addressed – such as the availability and rate of discounts on offer, the delivery promise to customers, site performance etc – as this will likely be a pivotal year in terms of shaping how Black Friday works and, crucially, how shoppers feel about it.”
How shoppers will buy
Almost half of Christmas shoppers say they’ll mostly buy online this year, a new study suggests. Some 45% of shoppers favour researching and buying their gifts online, according to research from programmatic marketing technology specialists RadiumOne.
It questioned 1,000 people aged 16 and over in a survey run by research agency Mindmover, and found that online buying and research was the most popular option for 58% of buyers aged between 45 and 54 in particular. In contrast, only 13% of all those questioned said they’d prefer to research and shop in-store. That’s most likely to be the case for shoppers aged 55 or older, where 23% prefer to visit shops.
What to do? — eDelivery’s editor, Sean Fleming
At our recent eDelivery Conference, several people told me they’d be press ganging office-based staff and getting them to pack boxes down at the warehouse over the Black Friday/Cyber Monday weekend.
Some even joked they’d be taking their families to work with them. At least I think they were joking. And, as you’d expect, many journalists in the mass media and broadcast world are already readying the stories they’ll be running. You can expect the same fare as was served up last year – delivery chaos, Christmas presents that won’t arrive, and everyone watching to see which retailers and carriers will drop the ball the most spectacularly.
So there will be pressure and there will be difficulties. Some real – processing and shipping orders quickly enough – and others less so – coping with unwelcome attention from the media. There won’t be a great deal anyone can do if the likes of the Daily Mail et al decide to go big on the likelihood of a calamitous peak, and it won’t matter tremendously how accurate any such assertions might be to your particular situation. After all, if no news is good news then good news won’t be what anyone’s interested in writing.
There are things anyone can do to avoid opening themselves up to problems though.
One must have item in your toolkit is the ability to monitor capacity issues in real-time – or as close to it as you can get. An absolutely crystal clear indication that you can’t cope is when you’ve stopped being able to cope. Don’t let things get that bad. Draw some metaphorical lines in the sand and know precisely what you will do if and when you see those lines breach.
If you’re old enough to have enjoyed the original Star Trek TV series, be like the chief engineer, Scotty, and tell the captain when the ship’s engines can’t take it any more.
Is there a mechanism in place to withdraw items from sale when stock is dwindling? Then why isn’t there an equivalent mechanism in place to restrict orders when the back-end is struggling, or remove certain delivery options once they have, in effect, sold out too?
If these tools do not exist, you’ll need a manual alternative. That’ll require keeping a cool head, watching the numbers at all times, understanding when things are about to become critical, and then intervening.
But a cool head might turn out to be the most valuable asset of them all.