Lisa Kalscheur argues that Black Friday offers greater benefits than a weekend-long sales boost if brands are prepared to lay long-term foundations.
Figures from Centre for Retail Research indicate that UK shoppers will spend £2.53 billion this Black Friday, 3.4 percent more than last year. However our research contends that a brand’s most engaged customers aren’t engaging with those brands as strongly as they once did during Black Friday.
What used to be a discount-driven in-store event has undergone a digital and ethical transformation, becoming a multi-week marketing and public relations opportunity where successful brands compete on values, customer loyalty, and experiences.
As an example of how marketers are innovating to capture consumer attention (and wallets), beauty brand The Ordinary offered a discount throughout the whole of November, while boldly deciding to close its store and black out the website on Black Friday to encourage shoppers to consider the impact of consumerism.
This is of course an outlier, but it demonstrates the pressure marketers are under and the extreme Black Friday strategies they’re launching to attract customers. And it also begs the question, is it sustainable for retailers to lean so heavily on one moment in the year?
Rather than put all their eggs in the Cyber Weekend basket, we encourage our retailer brands and partners to focus on a long-term personalisation strategy that drives customer engagement and loyalty throughout the year.
Being able to anticipate what the consumer might like and serving an experience which will make them feel special is now the price of admission to compete in the retail environment. Consumers today expect a tailored experience, but marketers must build strategies that learn from consumer interactions in order to maximise effectiveness. A combination of data-driven personalisation and AI prediction and analysis can deliver a positive feedback loop that can be applied to both holiday and evergreen marketing tactics.
With this in mind, here are three ways brands can use Black Friday as an opportunity to drive long term success — not just over the holidays but beyond.
Loyalty is a gift
Our study of 8.52 million customers across the 2017 and 2018 holiday seasons shows if brands are going to focus on the Christmas season, it’s better to retarget last year’s shoppers. While the average conversion rate for all returning customers is about 2%, retained customers from the previous holiday season converted at 4.2%.
This makes holiday customers who came back, or who were “retained” from the previous holiday season, a significantly more valuable segment than other cohorts. Unfortunately, this group has historically been overlooked because of its relatively smaller size, but they are a loyal audience brands should reward. With close collaboration between your personalization and customer acquisition teams, this small group can be nurtured and expanded year over year.
Customers likely won’t return if they haven’t been engaged with throughout the year, so brands need to consider a long-term engagement strategy that focuses not only on short-term conversions but relationship building. Ask your marketing teams if you’re delivering value (in the form of articles or recommendations) year-round to holiday customers beyond transactional emails and ads. For example, if you’re selling fitness accessories, are you nurturing customers and gift recipients with inspiration on how to use it? Following this “content marketing-style” approach, you can convert customers into your best customers and benefit into the next holiday season.
Peace, Joy and Measurement
It can be daunting for retailers to make sense of all the data they have. However, identifying patterns from previous holiday seasons and using them to inform approaches throughout the current year is invaluable to identify the customers most likely to convert. Here’s how I think of it: if your marketing team’s personalisation strategies rely on opinions more than data (aka “we just know it”) then you’re not leading a customer-obsessed, data-strong organization. Similarly, if the team is only looking at short term sales numbers, a long-term customer strategy is being ignored.
Brands need a unified customer view in order to do this most successfully. Research from Google based on last year’s holiday season reveals 53% of shoppers always do research before they buy to ensure they are making the best possible choice. They’re likely to look online before they buy in store or vice versa, they want to touch and see a product in store before considering it and buying online.
Tracking digital influence on in-store spending is key to levelling up, reducing cart abandonment and enhancing sales — not just on Black Friday but at all times of the year. Retailers must develop an optimised ecommerce experience across all channels so they can truly understand customer interaction with their brand.
To do this well, brands need accurate measurement to understand the particular audience segments growing in value that present opportunities. And this isn’t just about planning for the channels that get the most media attention, like shoppable Instagram. Many brands struggle with a strategy for connecting holiday catalog and direct mail to their online personalisation strategies. To cut through the competition and drive conversions, brands need to be able to communicate a valuable message that speaks specifically to each acquisition channel’s audience.
Embrace full funnel personalisation
Leading retailers are turning to artificial intelligence (AI) in order to make the process of identifying audiences and creating tailored campaigns simpler and more scalable. Technology can help analyse and segment valuable audiences at scale, creating more opportunities for growth. The data can then be analysed regularly to inform personalisation beyond the holiday season.
AI isn’t just being used to programmatically deliver the right message to the right audience either. It can also be used to recognise behaviour that helps marketers reduce costs and increase efficiencies. For example, if AI revealed customers driving high returns, marketers can use this knowledge to address the customer experiences leading to high returns and deliver more personalised product recommendations and descriptions as a solution.
Winning for the long term
The level of sophistication in personalisation today means brands can use the holiday season to make their marketing more effective throughout the year. Ultimately, retailers cannot afford to ignore the long term whilst focusing on single discount events like Black Friday. To take the lead, ensure your teams have long-term customer relationship KPIs and are creating campaigns over the holiday season that will help nurture this throughout the year.