Like the American tradition of Thanksgiving which acts as a pre-quel to Christmas celebrations, the
so-called Black Friday pertains to give Christmas shopping a head-start and will kick off on 27th November this
year, the day after Thanksgiving. While Thanksgiving is not a tradition in the
UK, many UK retailers have since 2011 adopted this American shopping bonanza. Prior to that, the best shopping deals in the UK were during and after Boxing Day. Now in the run-up to Black Friday, more retailers are adopting aggressive discounting as a strategy in order to attract customers. UK shoppers splashed out over £810 million on Black Friday in 2014, websites were crashing and people were fighting in the aisles.
Projected revenues this Black Friday are over £1 billion, according to digital
agency Pulse, setting a new record in retail spending.
Experts predict that this year Black Friday is set to be
bigger than ever, and sales over the 24 hour period are forecasted to surpass
£1 billion pounds for the first time ever in UK history. To put that in perspective it means that
£11,574 will be spent every second.
The latest research from IRI Group has significant ramifications
for retailers in the run-up to the all-important Christmas season. The findings
show that over half (54.6 per cent) of items sold in the UK are sold in sales
or as part of deals such as ‘buy one get on free’. Following on from dispiriting Consumer
Confidence statistics in October, the picture is bleak for British retailers
ahead of the crucial December period.
Consumers are increasingly using mobile and eCommerce
channels in order to find the best deal, with retailers being forced to respond
by ramping up the amount of sales or special deals on offer. This trend has
been amplified by the fact that ‘mega-deal’ days such as Black Friday and Cyber
Monday are beginning to have a greater impact and forcing retailers to adapt by
offering ‘super sales’ in order to remain competitive.
Experts say that this trend is not the path to growth but
rather will leave many retailers struggling to survive, unable to distinguish
through a pricing strategy alone. The constant discounting of products is
likely to further compound retailers’ post-Christmas struggles, continuing the
trend of January bankruptcies from the last few years. Since 2013, over 150
have gone to the wall with figures expected to rise.
Instead of constant discount sales, the customer experience
across a range of channels is the key to better engagement. The growth of
mobile devices has meant that customers are able to research the cheapest
option at the touch of a button, regardless of where they are. This in turn has
meant that increasingly the mobile customer experience is becoming the critical
factor in attracting high customer numbers. With mCommerce now accounting for
40 per cent of all online sales, the mobile is ‘the second shop front’,
requiring retailers to focus on providing a unique customer experience to build
customer loyalty.
Dan Wagner, veteran eCommerce expert and CEO and Founder of
Powa Technologies says: “It is staggering that the vast majority of customers
who walk into high street shops are still anonymous to businesses. Retailers
have no idea who they are, what they need and how to appeal to them as
individuals. An aggressive discounting strategy is not going to cut it – it’s
not a path to survival and growth but to destruction. The industry’s future
depends on forming a much deeper engagement with customers and this can only be
done though data. Forward-thinking retailers are already relying on a wealth of
in-depth customer information with every transaction, including age, gender and
location of purchase, providing real-time geo-located insight into consumer
behaviour. The ones that aren’t are simply being left behind.”
The rise in smartphone usage means that almost every
customer on the high street today can comparison shop in seconds, so price-wars
are a strategic dead-end. However, smart retailers regard the ability to
connect to customers through smart devices as an incredible opportunity to
actively connect with them on an experiential level. By using PowaTag, shoppers
have the power to complete transactions in seconds anytime and anywhere,
utilising triggers including scanning print material, Bluetooth beacons, audio
tags and social media.
Dan of POWA Industries continues: “Using the deep-dive data generated by these
digital customer interactions, retailers can move way beyond large impersonal
campaigns and reach each one of their customers on an individual level.
Retailers finally have the ability to bring the science of ROI to offline
advertising methods such as billboards and newspaper adverts as captured data
is instantly updated when a product is purchased. This allows for a whole range
of engagement opportunities such as personalisation, timely cross- and
up-selling opportunities and location-based promotions. The current status quo,
where retailers are surviving on scraps of useful customer engagement data
regarding the effectiveness or impact of their multi-million pound marketing
campaigns is untenable. For any business looking to survive in such an
intensely competitive market, getting to grips with these new data sources is
essential.”
