Much has been written over recent years on the concept of ‘peak stuff’, the idea that excessive consumption is filling people’s homes with clutter they no longer want or need.
In an ever more disposable and digitised world, it is another challenge for retailers to deal with.
How this manifests itself in their preparations for peak trading this year is yet to be seen, with the first big test coming on 24 November, the date of this year’s Black Friday.
This event divides opinion more than any other trading event and following a rush to jump on the bandwagon several years ago, many brands were just as quick to throw themselves from it in 2016.
Go hard and it can smack of desperation, as well as potentially damaging those intricately crafted brand campaigns. Additionally, heavy discounting runs the risk of damaging customer relationships if done with the subtlety and severity of a sledgehammer.
For retailers feeling beleaguered by the growing impact of the Brexit vote however, abstention from Black Friday can seem like a risky option; withdraw and potentially lose out on an army of shoppers tempted by your killer deals.
However, while the results of the big day are often pronounced, there are subtleties in the insights gleaned from closer examination that may offer food for thought for retailers confused about their options.
Allow shoppers to discover you
The simple fact is there will be far more people online on Black Friday than usual. These may be more curious than confirmed shoppers, but data from Awin’s network of affiliates shows that while affiliate traffic can increase tenfold for retailers with the deepest offers, it can double for those who choose not to engage with the event. Do nothing and you can still watch the sales roll in. Although click-to-sale conversions may not be as impressive, don’t assume that by not running promotional activity consumers won’t be searching for your goods and services.
This provides an obvious opportunity to tap into audiences who may be casual in nature but with the potential to convert into paying customers. These shoppers may be the ones who have discovered you for the first time.
It is becoming increasingly common for brands to measure additional, qualitative metrics within the affiliate channel such as the propensity of affiliates to target and generate different types of customer. One statistic to monitor for each of your affiliates is the volume of new customers.
Homegrown brands could sell to a global market of consumers hungry to buy British at cheaper prices than in their home countries.
Network data from the top five Awin retailers by volume of sales on Black Friday 2016 shows that for two of them it represented the third highest day in November for new customers and second highest for two more. For the biggest brand, it produced the greatest number of shoppers fresh to the site than any other day in the month, though these customers may not necessarily be shopping for products in the way you think.
While positioned as a gifting event, Black Friday seems to present itself as a multipurpose opportunity for shoppers to also treat themselves. Research carried out by Awin in 2015 found that of those looking to buy something on Black Friday, half of them were doing so for themselves. Therefore, the messaging around how products are presented to consumers should reflect this.
With regard to what is bought on Black Friday, additional network insights show a surprising array of advertisers with impressive growth and sales spikes. The telecoms sector resonates strongly, with three of the top 10 advertisers on Black Friday being drawn from this area. Perhaps this indicates how we should embrace Black Friday as a bookmarked opportunity for consumers to get their houses in order. Need to upgrade your phone? Interested in a deal on your car insurance? Changing broadband suppliers? Wait until Black Friday when you can sort out your life laundry, as well as your Christmas presents.
Alternatives to discounting
Black Friday is, of course, synonymous with discounting but it doesn’t have to be for any brand interested in exploring their options. Research consistently shows consumers often prefer a free delivery incentive, rather than a straightforward discount from retailers which charge for postage and packing. A word of caution however – this may alter the complexion of the customer and result in a surge in returns, a major red flag for retailers.
Discounting need not be site-wide. For retailers selling a unique product, there can be little advantage in offering money off goods that cannot be bought anywhere else. Additionally, it may be more prudent to launch stretch and save codes based on a minimum spend or focus on certain product ranges.
Control is often cited as a major concern for brands in the realm of voucher coding. Be assured there are technical solutions that can allay these fears, such as a single use codes. If these are developed in an environment where the results are fully measured, it should help to shape future strategy.
Finally, while the economic consequences of the UK’s impending exit from the European Union are unclear, homegrown brands could sell to a global market of consumers hungry to buy British at cheaper prices than in their home countries. With the faltering pound, discounting isn’t a necessity as long as the logistics of delivery and customer service are in place.
One of the most interesting trends about Black Friday is how it is spreading across continental Europe. The Netherlands saw a more than doubling in sales from Black Friday 2015 to 2016 and the Awin network in France also witnessed impressive growth. While Germany remains resistant to the event, what we are witnessing in Black Friday is a retail phenomenon that is spreading across the globe. One in seven sales for Awin’s UK affiliate programmes at the start of Black Friday came from China, 8am there being midnight in the UK.
It is unlikely Black Friday will show any signs of abating in 2017. But perhaps in line with the concept of ‘peak stuff’ we will see a surge in people buying gift experiences for people rather than products they can use. Regardless of whether consumers feel they have enough, where there are goods or services to be bought, there are affiliates primed and waiting to sell them.
Kevin Edwards is global client strategy director at Awin.