After turning colors, autumn leaves are now falling to the ground in many areas of the country, and the Halloween masks have been discarded. For retailers, that means that Black Friday is around the corner.
That used to really mean something. Black Friday was once a day that retailers would make a great bulk of their sales for the entire year. But, with price competition fierce all year long, holiday marketing starting early and lasting longer than ever before, and eCommerce allowing shoppers to shop anytime and anywhere, Black Friday has lost much of its meaning.
In order to help marketers better prepare for the holiday season, here are some insights into this year’s shoppers from outlets that have crunched the numbers.
Many consumers are shopping early for the holidays
It’s easy to believe that shoppers are ticking things off their holiday lists early this year. According to research from creditcards.com, a million had already polished them off before the end of September—not long after summer ended. And those are the shoppers who are finished — millions of others had at least started by then, too.
The newly emerging importance of early shopping is putting marketers in a bind because, while most Americans say they’re annoyed by holiday promotions that launch around Halloween, retailers out of the gate early with their holiday deals often win their dollars, other research finds.
More shoppers plan to take their holiday dollars to stores earlier this year than last, for example. More than a quarter (27 percent) of the respondents to a survey conducted by Market Track said that they planned to get most of their holiday shopping done by Halloween — an eight percentage-point increase from last year.
While many shoppers may simply want to get things done before the holidays get too frenzied, they may also be responding to price cuts that have already begun.
Another study by Market Track, which looked at more than 100 holidays items that are expected to be especially in demand this year—including electronics, toys & games, tablets, laptops, headphones, among other popular holiday gifts — found that online prices had already dropped an average 6 percent between Oct. 24 and Oct. 31 on Amazon, eBay, Google Shopping, Best Buy, Jet, Target, and Walmart.
In an era when Black Friday has lost much of its urgency, at least for many consumers, marketing early pays off. Major retailers with Black Friday promotions before Black Friday outperformed retailers that didn’t, with an average 1.4 percent year-over-year growth from 2014 to 2015, according to Cardyltics. Those that didn’t start marketing before Black Friday saw a 2.2 percent drop from 2014 to 2015, that study found.
Others are waiting until the last minute
But while there are plenty of early birds this year, there will be plenty of procrastinators, too. For that, click-and-collect and other omni-channel services could be especially helpful as shoppers go online for gifts but don’t necessarily want to risk a late delivery — something that has been a problem in recent years, as shippers like FedEx and UPS scrambled to fulfill almost impossible promises made by online
Remember 2013? That year, Amazon and other retailers told shoppers they could order as late as Christmas Eve and still get their packages on time. For many, that was a setup for disappointment — millions of packages were late. Shippers in the years since have begged retailers to ease up on those offers, but have also sped up their operations and hired more people, just in case.
In a report that found plenty of good cheer for retailers this year — an 11 percent bump in sales for a record $91.6 billion — Adobe, in its annual Digital Insights Shopping Predictions report for this year, found that 5 percent more people will be shopping online in early November, but that a record 24 percent more will still be shopping in the last two weeks of December.
“‘Click and collect,’ faster shipping and retail promotions starting earlier than ever are all contributing to the extended shopping season,” said Mickey Mericle, Adobe’s vice president of marketing and customer insights.
Early or late, shoppers are looking for deals
Hawking promotions well before Black Friday won’t go unnoticed by holiday shoppers because most are hot for deals. Their phones are helping them a lot: While mobile shopping isn’t yet really about actually buying things for most, people are indeed comparing prices on the things they want to buy, often when they’re still in the store.
Physical stores that offer omni-channel services, including in-store pickup or delivery, and those that have a good handle on their inventories, are poised to succeed with consumers — provided their prices win. Some 42 percent of consumers this year said they “rarely or never” expect to pay full price at the holidays, according to Accenture’s holiday report.
In fact, consumers, rattled by the presidential election and somewhat worried about the economy, despite gains in wages and employment, are being very diligent about finding good deals, according to coupon site RetailMeNot.
Early last November, RetailMeNot recorded a 21 percent increase in shoppers searching for deals, and this year found that almost half (46 percent) say they’d start their holiday shopping before November 1. Finding good deals, in fact, is the number-one motivator for more than 60 percent of holiday shoppers, up from 51 percent last year, RetailMeNot found.
Similarly, Accenture found that a great majority (67 percent) of shoppers are wiling to sacrifice convenience to shop around at different stores and retail sites to get the best price, and that nearly three-quarters (72 percent) said a retailer could entice them with promotions or coupons even if they haven’t shopped there in the last year.
Finally, although there’s plenty of evidence that Black Friday isn’t the blockbuster day it once was, it’s still the day a great many shoppers do plan on to find good deals at stores, followed by the weekend before Christmas, according to Accenture.
“The good news is that U.S. consumers plan to spend more and are increasingly willing to share personal information to receive offers – but they remain focused on frugal bargain hunting,” says Jill Standish, Accenture’s senior managing director of retail. “The clear opportunity for retailers is to learn all they can about their customers and use these insights to provide the personalized and timely deals consumers are seeking. By optimizing inventory and marketing, they can increase the profitability of each customer visit to their store or website and maximize each click.”
Key holiday marketing strategies for retailers:
So given these consumer trends and buying patterns, how should marketers respond? Here are a few key strategies to keep in mind:
- Start your holiday marketing campaigns before Black Friday. Black Friday sales are weakening, and major retailers with pre-Black Friday promotions outperformed other retailers year over year.
- Create unique audiences to catch early bird and last minute shoppers when they’re active. Retailers should create personalized campaigns for each type of shopper and execute at the time that aligns with their behavior to capture maximum spend.
- Offer shipping deals early and late in the season. eCommerce continues to grow year over year with consumers heading online and skipping in-store. Vary your shipping deals according to the time period or offer free shipping with a certain spend minimum to encourage consumers to spend their online dollars with your brand. Include these deals in all your email banners and update deadlines accordingly.