Every year, it’s right about now that businesses start planning their Black Friday campaigns. Typically the largest shopping weekend of the year, all efforts are on finding ways to maximise Black Friday sales.
Well, that would be the case for a normal year—except this year is anything but normal. The COVID-19 pandemic has business leaders the world over scratching their heads and wondering how to approach this Black Friday.
COVID-19’s potential impact on Black Friday 2020 is huge. And that’s because a large proportion of retailers already saw Black Friday like results after COVID-19 hit. In the US, eCommerce shopping levels during COVID-19 (April to May) were 7% higher than what retailers saw during the 2019 holiday season (November to December).
As further shown below, online sales took on a new upward trajectory in mid-March. This trend was also reflected in the majority of our clients’ results here at Vaimo.
Data snapshot May 6th from https://ccinsight.org/
Given this upswing in spring eCommerce sales, retailers are wondering if Black Friday will still hold the same value as before. Will customers have any appetite for Black Friday? And will they have the means to purchase as before, given economic uncertainty?
If we fast forward to the present day, average eCommerce sales have stabilised somewhat since the March spike. Data from Adobe Analytics shows the huge year-on-year growth for May and June in particular and then some stabilisation moving into July.
But despite this, July eCommerce sales are still well up on last year and what we were used to in the pre-COVID world.
New research from Adobe suggests that 2020 online sales will surpass the total online sales in 2019 by Oct. 5, 2020. Note that this October date is even before the holiday season begins to ramp up—demonstrating how much COVID-19 fuelled eCommerce growth in the first part of 2020.
So, to the burning question being muttered by CEOs and customers alike…
Will Black Friday 2020 be the same as in previous years?
While Black Friday will most definitely take place this year, there are bound to be some key changes. Let’s take a closer look at these…
Remember turning on the news on previous Black Fridays?
Chances are, you’ll have seen at least one report on:
- customers in tents queueing through the night to get their hands on the best deals, or
- said customers getting into fisticuffs over the discounted 56 inch Sony TV.
For obvious reasons, it’s impossible to think that companies (or governments) will allow such huge crowds for Black Friday 2020. Laws are different across the globe, but there’s a consensus that in-store Black Friday sales will look different this year. Along with government rules and guidelines, retailers are cautious about employee safety and we’ve already seen many introduce restrictions on the number of concurrent visitors.
In a historic first step, retail giant Walmart has already signalled its intentions by closing its doors this Thanksgiving. This is the first time in decades that the step has been taken. And Macy’s CEO Jeff Gennette has also commented that he expects the department store’s Black Friday business to be geared more toward online in 2020.
“With the heavyweight retailers making such moves, I think it’s only a matter of time before plenty more follow suit and adopt a purely online strategy. As such, it’ll be those businesses that can replicate the buzz, excitement and drama of a Black Friday shopping floor in their eCommerce store that will get the best results.”
Black Friday’s impact will also depend on the economic situation in specific countries. Since the COVID-19 outbreak, countries have adopted different economic strategies in dealing with lockdown. In some regions, there is the threat that rising unemployment and/or changes to welfare payments will ultimately halt the type of Black Fridays we’ve seen in the past. A reduction in disposable income is the reality for millions around the world and you’d have to think this will have some kind of impact on Black Friday sales.
So does this mean that Black Friday will be bigger than last year, or will it take a dip?
With the shift to online, I think that we’ll be seeing Black Friday sales accelerate further than they ever have.
Black Friday vs. COVID-19 Peak Sales
During the initial COVID-19 lockdown, certain products saw massive spikes in sales as we all prepared for more time indoors. Some of the key headings were groceries & home cooking, DIY, household items, fitness and home office.
And even now it’s these product categories that are seeing the largest increases in YoY growth rate. At the time of writing, the CCI weekly report of highest growth rate products includes:
|YoY sales growth increase
When COVID-19 took hold, eCommerce sales increased due to necessity. Access to physical shops was tightened so we had to order our weekly groceries online. Offices and gyms were closed, so we invested in an office chair and a skipping rope for a lunchtime workout. And our favourite bakeries were shut, so we invested in the equipment to make sourdough bread and cakes at home.
But typically, Black Friday has mainly been associated with non-essentials, predominantly apparel and electronics. This, therefore, presents a new opportunity for certain product categories that may not have previously had much of a Black Friday eCommerce presence such as DIY, household appliances and fitness equipment.
With the experience of COVID-19 in their back pockets, these types of businesses may well have the ammunition to reach their highest ever Black Friday eCommerce sales. And for brands and distributors that are sitting on inventory, Black Friday could represent a huge stock clearance opportunity.
Black Friday Psychology
There are genetic reasons why we humans love a good bargain. It all starts with those words we associate with Black Friday and that hint at some kind of exclusivity: ‘sale’, ‘deal’, ‘x% off’. These trigger the reward circuits in our brain, and override the rational part of the brain that might normally ask, “Do I really need another iPhone, just because it’s discounted?”
Additionally, there are two key principles that Black Friday taps into.
Scarcity and social proof.
A Black Friday deal is inherently scarce as it’s only there for a day or two. And it’s this scarcity that plays on our primal fear of there not being enough to go around—something that could have been deadly for our ancestors. In parallel, we also have social proof, which is further exacerbated by social media. We see friends post about deals on Facebook, we talk with colleagues about their Black Friday deals and we see other shoppers on TV bagging bargains. The principle of social proof says that we’ll change our behaviours as a result of social interactions with others. We’re only human after all.
“This heady combination of scarcity and social proof seriously ramp up our FOMO (fear of missing out). And if there’s one thing humans don’t like, it’s missing out.”
It’s impossible to know if these instincts will see Black Friday 2020 hit new sales heights, but it does show that Black Friday won’t be going anywhere soon.
Black Friday 2020 Moves Online
As we look ahead to Black Friday, there are many moving parts and external events that could impact its YoY growth. But one thing’s for certain—this Black Friday won’t be played out in shopping malls, it’ll be on laptops and phones.
We saw that this year’s eCommerce sales are already predicted to beat last year’s, by a long shot.
With eCommerce’s popularity at its highest, could this turn out to be the biggest online holiday season on record?
It’s impossible to tell, but the signs are there. And as we’ve learnt this year, anything can happen.
Despite the uncertainty, businesses will still need to be ready for a Black Friday onslaught. If your customers are coming to you and expecting a deal, it’s up to you to make that happen. And you’ll need to make sure you have the technical infrastructure to deal with larger than average visitor numbers to your website.
Remember, there’s a big chunk of shoppers who normally visit the store on Black Friday who will be clicking on a website this year. The last thing you want is your site crashing and customers heading off to a competitor’s website.
2020 has been the year of the unknown and it’s no different for Black Friday.
Given this uncertainty, though, businesses need to stack the chips in their favour by investing in eCommerce optimisation. If it turns out to be a record-setting Black Friday, you’ll need an eCommerce store that’s reliable, secure and that can give shoppers that exciting Black Friday shopping experience they’ve come to expect.