Black Friday: Stick, Twist or Double Down for Retailers

The hype is inescapable, but can retailers ‘beat the house’ and improve customer experience in the process?

Friday 24th November, or Black Friday, is upon us and customers have been waiting for the best (or “best at the time”) deals out there. There is a flurry of marketing activity and a long-awaited frenzy amongst bargain-hunting customers has likely already begun.  Nothing quite like Black Friday (and Cyber Monday) exists in terms of the hype and preparation needed; ‘survival guides’ are even issued for customers wanting to get ahead this year. Retailers are deploying a range of tactics to ensure smooth events but with the odds stacked against them, are UK retailers ‘sticking’, ‘twisting’ or ‘doubling down’ this year?

 

Why take part in Black Friday?

This is a question that both customers and retailers alike will have been asking up until now, particularly in the UK. The customer journey during Black Friday is notoriously short and promotion cycles are extended to help alleviate pressures (on staff, on systems) and increase sales opportunities, for example, Debenhams’ ‘Black Friday week’.

Customers are seeking out hugely discounted items and to be rest assured afterwards that they got the best deal. At face value, customer expectations are likely to be low when it comes to the in-store experience, with more and more choosing to avoid the shops as horror stories of employees and customers surface every year, and the online experience gets better.

Out of the selection of department stores in the KAE Customer Experience Study, John Lewis ranked highest for customer experience overall, followed by Selfridges. The potential to delight customers and increase the CX score is of interest here, as Selfridge’s approach to Black Friday could reap more reward.

In the quest by retailers to strike the right balance between maintaining goodwill with loyal customers and boosting sales, Black Friday decisions bear some resemblance to a gamble, some might say. What can retailers do to enhance customer relationships during Black Friday? The blackjack analogies of ‘stick’, ‘twist’ and ‘double down’ help to re-define the tactics that could be deployed by UK retailers to ultimately help reap greater rewards…

 

Stick

Beyond the claims (increasingly being dispelled) of Black Friday being the busiest shopping day of the year, some UK retailers and department stores will stick with their promotional calendars. For example, Marks & Spencer and Selfridges have opted out of hosting Black Friday events this year, to focus on the run up to the festive period.

Although a cost-cutting exercise, retailers could still refocus efforts on the in-store and online customer experience, delighting customers through more experiential shopping. Marks & Spencer features festive offers on its site including across Beauty, Food and Furniture, and it will be gleaning survey responses from online shoppers to help improve their online experience.

For Selfridges, the focus has been on creating hype around their discount-led campaign. Selfridges pre-warned onlookers about its ‘Christmas Comes Early’ event, providing customers with ‘up to 20% off’ a range of lines (starting on 23 November). The promise of a parade, full discount code and barcodes provided in emails for a seemingly smoother experience, have been enticing.

Department stores that focus on their festive campaigns and re-position them to appeal to their customer base will perhaps win more on Black Friday than is expected in value. Could Selfridges win more in this case? In the ‘stick’ scenario, retailers should stick but not get stuck, i.e. test what works, measure success against uplifts on normal trading and although easier said than done, delight customers on the one day they don’t expect it.

 

Twist

‘Twisting’ in the Black Friday blackjack analogy involves being dealt a new card. For instance, Debenhams chose to extend their Black Friday to a full week – offering deals of ‘up to 50% off’ certain ranges, with today’s online offer of “VAT free fragrances”.

Kicking off promotions early and extending Black Friday may help to draw the attention of shoppers and tap into the wider trend of customers starting holiday shopping before November. Spreading the deals out could alleviate footfall pressures that have plagued retailers and ultimately improve customer experience.

Point-of-sale and payment solutions are an option for smaller merchants to streamline the shopper experience; according to the FinTech firm Square, waiting time for customers could be cut down through their payment app.  Other mobile payment platforms, such as WeChat Pay, are also being introduced in the UK. Can we expect to see more investment in solutions such as this by larger retailers in future? The likelihood is yes, but in the meantime, retailers should also consider payment processing and whether the IT infrastructure can withstand the sheer volume of transactions on Black Friday.

The beauty of ‘twisting’ in the game of Black Friday blackjack is in the number of times that retailers can do so, and year on year. The opportunity that extended Black Fridays, as one form of this tactic, bring to retailers in the form of engagement pre-, during and post-event, are numerous. One of the key aspects here will be to be transparent with customers all the way through, so as to avoid any ‘warnings’ going out to customers.

 

Double Down

The ‘double down’ move requires considerable investment from retailers and can be the optimal tactic when external factors, such as competitors’ actions, are considered. The online retailer Amazon is a notable example this year and it even recently opened a pop-up shop in Soho, London that showcases products on offer and builds on the experiential element of shopping that brick-and-mortar stores offer.

There are some hands you just don’t double down in blackjack and when it comes to doubling investment on Black Friday, it’s no different.  Retailers will need to revisit their priorities and assess the viability of investing in in-store experiences that could ‘wow’ customers and provide longer-term value.

 

Retailers taking part in Black Friday should go beyond paying it lip service, leveraging the opportunity along touchpoints to find and reward high-value customers.  The biggest winners after the cards are dealt will also include the retailers that have assessed the trade-off between short term boosts in CX vs. the potentially longer term risk of ruining goodwill with their customers.  Attracting and retaining new customers before, during and after Black Friday will ensure that it’s not just a price war, but an opportunity to test and develop customer-focused insights.

With Black Friday here, only time (and the press) will tell if there are any ill-fated retailers or customers that didn’t quite get the experience they were hoping for.

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Adopting the right strategy when it comes to customer experience doesn’t need to be a gamble. By leveraging granular insights and analysis to focus on the right set of strategic priorities, organisations including retailers, can pinpoint next steps needed to deliver their brand promise, drive loyalty and revenue at this lucrative time of the year.

If you’re interested in finding out more, please email the team here at cx@kae.com

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