It’s that time of year again: Christmas decorations are hitting the shelves, stores are rediscovering their love for Boney M. and Michael Bublé, and retailers are already sending out their Black Friday marketing.
Yes, it’s the start of the summer campaign season – the stretch from Black Friday to Christmas to Valentine’s Day, and right through until Easter, where the retail sector is at its most lucrative and competitive. For some, it’s the most wonderful time of year. For others – like those who found themselves trampled in the infamous Black Friday viral video – it’s a nightmare.
As a consumer, you have brands from all sides shouting at you to “buy this now!” and spamming you with constant marketing. Sure, the adrenaline rush of getting a real bargain might be great, but how do you find those in a sea of products you don’t want or need? How do you make sure you’re ready to pull the trigger on that amazing deal you’ve been eyeing before it’s sold out?
For retailers, the challenge comes in managing the chaos. Not only do you have to make sure your promotion is memorable enough to catch people’s attention, you also run the risk of your digital infrastructure, customer service or fulfilment ecosystem not coping with the pressure.
It’s enough to make you lock yourself in a room and sit out the festive shopping season completely. Except with analysts predicting Black Friday to top last year’s R1.36 billion in extra sales, you’ll be sharing that room with an awfully large elephant. You’d also be missing out on a major opportunity for customer acquisition – TransUnion data shows a clear growth in new accounts year-on-year, with consumer electronics retail accounts spiking by a massive 68% over seasonal averages.
South Africa’s appetite for Black Friday shows no sign of slowing down. However, that means consumers and retailers are both struggling to cut through the noise of the summer shopping season.
It’s easy to get caught up in the hype of Black Friday, especially when brands rely on deal countdowns, limited stock and other tactics designed to drive urgency. It’s only once the thrill dies down that many people realise they’ve spent much more than they can afford. With our country’s lopsided debt to income ratios, there’s a real risk that Black Friday might lead to higher rates of indebtedness.
The key to avoiding buyer’s remorse is to do as the retailers themselves do – go in with a strategy, a budget, and the right data to make informed decisions. Come up with a wishlist of what you’d like to get out of Black Friday and compare it against what’s most likely to go on sale – consumer electronics, cellphones, gaming products and groceries all tend to be discounted over Black Friday. Take the time to familiarise yourself with the prices beforehand so you know what a good deal looks like.
Use the power of connectedness to your advantage. The shift in spending from malls to digital channels is in the favour of consumers, not retailers. That means we as shoppers have the advantage of being able to search and compare prices in real time, subscribe to deal-specific newsletters and loyalty programmes at our favourite retailers, and scan barcodes in-store using our cellphones. Don’t finalise your shopping cart until you know for certain what you’re getting is the best possible value.
Finally, don’t fall into the trap of using money that you don’t have by racking up short term debt on credit cards, store cards or unsecured loans. Small, high-interest purchases eventually add up, and no lifestyle product is worth falling into a cycle of revolving debt.
When in doubt, look at your wishlist or your shopping cart and ask yourself what one product you can’t live without. Better to walk away with one really well-priced item (like a flatscreen TV) than a bunch of smaller ‘bargains’ that you could have gotten at nearly the same price any other time of the year.
Better budgeting for businesses
Retailers are well aware of the importance of Black Friday in driving sales, and devote massive chunks of their marketing budget to keeping the excitement going. How many of these businesses can say that they’re using their budgets effectively? The problem with the Black Friday/Festive Season hype machine is that it’s gotten so big, it’s spewing smoke everywhere. Your campaign just gets lost in a cloud of mediocre advertising.
What’s worse is that the tried-and-true tactics retailers use to drive holiday sales can easily backfire. Most campaigns at this time of year rely on spray and pray email marketing or poorly implemented remarketing that makes consumers feel as if you’re spamming them. The short spike in sales might not be worth the longer-term drop in brand perception.
Successful marketing in the digital age is about matching consumers to products – a little like buying the perfect Christmas gift or getting someone to swipe right on Tinder. Except Black Friday ramps up the difficulty – now you’re competing against every other brand in a frenzied kind of speed dating, bidding on the same keywords and sending through emails and push notifications at the same time.
Hyperpersonalisation can be a big differentiator in a sea of mass mailers and clumsy marketing strategies. You don’t need to have Watson at your side either to execute it properly. A few years ago, UK retailer Waitrose saw a 20% uplift in email conversion over Christmas simply by seeing which of their loyalty card holders had bought turkeys the previous year, and serving them targeted discounts.
The biggest mistake businesses make around this time of year is that they focus on price over value, volume over relevance, and quantity over quality. Why spend money spamming an entire database when you could be more effectively targeting a smaller segment who are already likely to buy from you? Why offer unsustainable price cuts on limited stock when you could be tailoring special offerings and unique discount codes according to individual customers’ needs? Why flight expensive radio and TV ads when you could be setting up automated workflows to send customers personalised deals, availability alerts and cart abandonment reminders?
Your other option is to keep following the crowd. Just don’t be surprised when you get caught in the chaos.