We need to talk about Black Friday.
In my 10+ years of experience working with brands on their Black Friday marketing campaigns, I’ve often had doubts about whether or not Black Friday is really all it’s cracked up to be from an economic and marketing standpoint. I could never shake the feeling that Black Friday was little more than a leading example of the myopic scourge that drives business to make bad decisions: short-termism.
Since starting my own AI marketing company Phrasee, I’ve been afforded a unique opportunity to put that feeling to the test. Phrasee has run tests on thousands of campaigns for brands across dozens of B2B and B2C industries, and the data produced has helped me flesh out my thoughts on the annual market-a-thon that is Black Friday in more detail.
First, let’s talk about the economic impact of Black Friday and what it really represents for consumers and brands.
For many years, peak trading for brands across the retail industry fell squarely on the brief annual lead-up to the Christmas holidays. Some retailers, desperate to disperse peak trading a bit and get it started earlier in the year, invented “Black Friday” to accomplish exactly that.
And it worked. Stores were able to clear out old stock, peak trading got dispersed all the way into November, and throngs of consumers flocked to retailers, fat wallets in hand.
But it couldn’t last.
As more and more brands and retailers joined the Black Friday frenzy, these annual shopping bonanzas quickly descended into little more than a race-to-the-bottom discount contest. Shoppers keep shopping, brands keep pumping out Black Friday marketing campaigns, and few stop to consider the real implications.
The question is: are retailers and brands really getting any benefit from participating anymore, or has Black Friday become an economically unsound retail moment, propagated for the short-term benefit of struggling trading divisions?
Judging from the number of retailers which announce they are going out of business each January, failing to take a good hard look at this question and ignoring the long-run economic impact of Black Friday is, quite simply, a poor strategy.
Sales and discounts drive traffic. That’s microeconomics 101. Consumers, as a homogenous group, are price-elastic. And in retail, more sales is generally a very good thing (also microeconomics 101). It’s true that consumers are more likely to make a purchase when offered a discount, so bigger discounts = more revenue. Awesome, right?
The fact is that everyone will be offering big discounts on Black Friday, trying to one-up each other with more tempting offers and bigger price cuts. Once you start participating in the hard-discount contest, your increased revenues become almost meaningless when you consider the beating your margins take. Sure, you’re selling more, but your profit lines aren’t increasing at the same pace. Not by a longshot.
And that’s just part of the problem.
It’s also worth noting that in many cases consumers don’t actually respond to discounts as well as you’d expect, particularly when those discounts are offered on digital marketing channels.
In a recent large-scale email marketing campaign for a major brand (with a massive subscriber list), we ran multivariate split tests on dozens of email subject lines. Many of the subject line variants we tested included specific mentions of discounts (ie. 15% off, or $200 off, etc), while many others did not.
Here’s what happened:
While this data only reflects results from a single campaign, it certainly offers some food for thought when it comes to the efficacy of using discount language.
If everyone is offering a discount… is yours really so amazing that people *need* to look now? Nope, it’s probably not.
Another thing to consider is the damage frequent use of discount language can do to your brand.
Look at these emails from The Gap:
If my inbox looks like this, what are the odds that I would ever buy something from The Gap at full price? If I wait a few days I can probably get it for 40-70% off! And better yet - I bet that if I fill my basket with stuff and abandon it, I’ll magically get another 10% off.
The fact is this: mentioning discounts in digital marketing doesn’t increase engagement and can actually have a negative impact on high margin sales.
Black Friday is all about discounts. And here’s some news: mentioning Black Friday in your campaigns doesn’t increase engagement either.
In our work with a major retailer, we tracked the performance of several Black Friday email marketing campaigns with email subject lines containing the words “Black Friday” against campaigns with subject lines which didn’t, and the results were enlightening, to say the least.
Mentioning “Black Friday” may feel right, but it doesn’t work.
Why? Because consumers have become desensitised to Black Friday.
Duking it out with your competitors with bigger discounts probably won’t get you anywhere worth going. The fact that you’re having a Black Friday sale doesn’t make you special. It makes you indistinguishable from everyone else.
Instead of riding Black Friday’s coat-tails to terrible margins and potential brand damage, may I suggest a different approach.
Stop diluting your brand’s message by being a Black Friday doppelganger. Make your brand’s Black Friday message about your brand, not about Black Friday.
The brands who buck the trend and avoid the deep-discounted, keeping-up-with-the-Jones’ stampedes on the day after Thanksgiving are the ones that will stand the test of time.
Instead, focus on building a marketing strategy that generates high-margin sales and robust customer lifetime value.
Your brand’s core message, the quality of your products, and your unique tone of voice are what have helped your brand build its audience. Those things matter. They are the key components of a robust marketing strategy, and a robust marketing strategy is what will make your business successful.
You can still make money on Black Friday without throwing your brand’s voice out the window, it just takes a little more effort to do so effectively.
If you’re wondering how to walk the fine line between effective digital marketing and protecting your brand’s voice… it’s time you gave Phrasee a call.