Businesses and Brands have been preparing for Black Friday to recover from the COVID fiasco. Team eCommerce Next interviewed Alex Timlin, VP verticals, Emarsys to get more insights. Following is our interview with him:
1. Why is this year’s Black Friday going to be different from previous years?
“This year’s Black Friday is going to be different from any other we’ve had simply because of Covid-19. With the closure of many stores across the world during lockdown coupled with consumer nervousness about shopping in person, this Black Friday is likely to be the first predominantly digital one. Retailers will have to ensure that their eCommerce offering is up to scratch to offset the inevitable dip in in-store sales on the big day.”
2. How has Covid-19 affected consumer confidence, and how will it affect spending on Black Friday?
“There’s a misconception that consumer confidence has nosedived since the start of the pandemic. While there is certainly some nervousness around consumers, our data shows that things aren’t as bad as they seem — consumers are now simply shopping online more than they did previously.
“As the graph below shows, online revenue growth from brands in the US since the start of the pandemic has been considerably higher compared with this time last year, peaking at 133% growth during the height of lockdowns across the country.
“In terms of Black Friday, I believe that consumer confidence is high enough for people to spend — especially to take advantage of significant discounts.”
3. Do you think consumers will shop in-store or online this Black Friday?
“Consumer research by Emarsys found that 28% of US consumers are planning on taking advantage of the sales — but only online. Just 4% say they will brave the stores.
“More than half (62%) also said that none of the safety measures that brands are putting in place would encourage them to shop in-store. Just 14% said that social distancing would encourage them to shop in-store, while just 7% and 6% said that contactless payment or click-and-collect services respectively would encourage them to go in-store.
“19% of consumers did say, however, that they would be tempted to shop in-store if the discounts they receive are greater than what they would get online.”
4. How are brands preparing for Black Friday this year? Have they started their preparations?
“Most of the retail brands we speak to in our client base are saying two things: we’re preparing for a record year in online sales but we’re also changing plans on the fly because of the global situation and its impact on consumer confidence and the supply chain.
“This year is really about getting the right product in front of the right customer, quickly, and making sure you manage your inventory on the fly because of availability. We’re also seeing a lot of clients invest in mobile website experiences and look at ways of using AI to help with things like product assortment and merchandising to make sure they’re putting the right products and offers on product pages and they’re only showing what’s in stock for the customer.
“We’ve also seen our clients heavily invest in planning their communications — mainly email but we’ve also a big spike in interest for SMS and even direct mail — letting customers know when stock will be released and when sales will be live. Brands are clearly preparing the way for a lot of traffic from mobile devices to mobile websites not just over one day, but really over what’s likely to be a week-long sales event in “Cyber Week” from Black Friday through Cyber Monday and either side.
“The last trend we’re seeing is that most of our clients expect the majority of their sales this year to come from existing customers (we’re predicting 55%+ of revenues will come from existing customers making repeat purchases) and they’re expecting a lot of competition for their customers’ attention. Much of these repeat purchases will come from customers who made the switch from physical to online shopping during the pandemic. We’ve seen many clients invest in planning for how they’ll give their repeat customers (not just those who are a member of a loyalty program) early access to products instead of just discounts on discounts — playing on the “fear of missing out” (FOMO) on great deals or highly sought after products.”
5. What are brands doing well in terms of their preparation so far? What are brands doing badly?
“I think what brands are doing well is looking weekly or even daily at what’s trending in the industry — both in terms of behaviors and in terms of products. This year has seen many peaks and troughs in demand driven by government announcements — lockdowns, stimulus packages, taxes, incentives, health warnings, easings, re-openings but then the threat of closures. It’s a really uncertain time and consumer confidence has been really rocked week by week. The brands that are doing well are keeping on top of these trends and looking at how to deploy their resources around it — when to put the foot on the gas in terms of sales and marketing spend, when to ease off, how to deploy their workforce, and when to plan inventory and in what numbers.
“Our most successful clients are looking not just at their sales data in terms of dollars but they’re looking at the products and categories they’re selling through and what’s not moving a lot more regularly. Sportwear, leisurewear, large consumer electronics, toys and crafting, fitness equipment, and furniture — first indoor and then outdoor — have all seen massive peaks in demand without much warning and then have tapered off again. Buying and merchandising teams are working closely with digital marketing and commerce teams to make sure they plan the right campaign and promote the right products in the right way at the right time — which is a big factor in successful business planning and great execution.
“The brands that are doing less well are focusing on their own business and their own problems and not really looking at customer data or industry data. By this I mean if you look at some really large brands who are struggling, their communications to customers didn’t really change from 2020 until late in the day and they were promoting the same products in the same way to customers not acknowledging that the game had changed. When that didn’t work, they then turned to sale and discounting and found that people still didn’t want to buy the stock. When a giant brand like GAP says they’re just going to sit on their inventory for a year and eat those costs in terms of the initial buy as well as the storage and warehousing space, it lets you know there are some people with some really big problems and a lot of it came because they were too slow to react and too slow to adapt to what’s a very different landscape from February 2020 to now.”
6. What should brands do to prepare for Black Friday this year?
“Because this year is likely to be the first predominantly digital Black Friday, brands need to start planning now. I would recommend brands do three things.
“First, I would triple check your website infrastructure. It sounds obvious, but before you start worrying about customer experiences, cart abandonments, or coupon codes, you have to guarantee your site’s infrastructure is up to scratch. If the predictions are to be believed, 2020 could be the biggest year in history for online retail traffic. Unfortunately, that traffic’s not much use if your website’s down.
“Secondly, use the time you’ve got now to drill down into your customer data. Take this time to dive back into last year’s Black Friday event, using analytics to understand what people bought, what promotions they responded to, and where they had issues on your site. But don’t just focus on your own data, check out what other retailers have done successfully and make the most of data that’s freely available online. Sites like ccinsight.org provide unparalleled insight into what consumers are buying — providing free access to over 400 million transactions from retail brands. Keep a close eye on this type of free data in the run-up to Black Friday, look for patterns and preferences, and then use those to inform your own promotional approach.
“Finally, optimize the digital experience for your customers early. With fewer in-store promotions to worry about, this Black Friday will give retailers even more time to focus on optimizing their digital experiences. With fewer than 100 days to go, your focus should be on mobile, social, and customer loyalty programs. With shoppers not out and about this Black Friday, it would be easy to assume that mobile purchasing will decline. In reality, the opposite is true, with 80% of shoppers now using their mobiles to browse and buy from home. Last Black Friday, mobile accounted for 67% of all online activity. This year we should expect that figure to increase even further, making mobile optimization a vital part of your Black Friday prep.
“If you do all of this right, you’ll be in a great position to make the most of Black Friday this year. While we’re predicting that the majority of sales for brands will be from repeat, loyal customers, there is also an opportunity to collect data on brand new customers, which you wouldn’t have been able to do in previous years when they shop in-store. This data can be gold dust to you in your preparations for Cyber Monday and Christmas in terms of retargeting and driving repeat revenue.”
7. Will a predominantly online Black Friday offset the closure of brick-and-mortar stores on Black Friday?
“Brands make most of their profit in store, while online sales are all about driving revenue. So, the closure of stores on Black Friday — or the lack of consumer footfall — is likely to leave a severe dent in brands’ overall profitability for the year. Therefore, it’s vital that brands make the most of their ecommerce this Black Friday. It won’t complete offset lost profit from lack of in-store sales, but it’ll help shift stock, which was a significant problem during lockdown, and boost overall retail activity.”
8. What advice would you give to brands for what to do after Black Friday?
“If you have prepared for Black Friday effectively enough with your technology stack, you’ll have centralized all your customer data, and you’ll be in a great position to retarget customers for Cyber Monday and for Christmas. I would recommend segmenting customers into loyal ones who spend regularly with your brand and one-off customers who you sold to over Black Friday. Then you can set up automated email campaigns promoting your Cyber Monday and Christmas offers in a personalized way to drive repeat revenue for your brand.”
9. Do you think retail will recover in the next few months to pre-COVID levels?
“Obviously, the retail recovery will depend on how long Covid-19 is with us in our society. I have no doubt that retail will recover eventually, but as to when, nobody can really say with any certainty.”
10. How important is offering a personalized experience to customers for this Black Friday? And how will a personalized experience drive revenue for brands?
“Most marketers know that loyal customers are the most profitable ones. The old 80–20 rule, which states that 80% of your profit comes from the top 20% of your customers, still rings true today. And so, it’s every marketer’s goal to create loyal customers. But given brands’ profitability is going to be severely hit by the lack of footfall this Black Friday in stores, marketers need to think differently about how to drive that loyalty and profitability.
“One of the best ways to foster loyalty is through digital personalization. Sending out a blanket marketing email to all your customers promoting your new products is unlikely to be an efficient way to drive revenue because not all your customers will be interested, and you risk alienating some customers with irrelevant information.
“But if you know a little bit about your customers — what they’re buying, what they’re looking at online, what time of day or month they usually buy — you can target marketing campaigns much more effectively by aligning your offering with whatever that customer is most likely to want. Artificial intelligence can help here by segmenting customers by particular behavior and loyalty, and then automation can help save you time by carrying out campaigns whenever a customer meets a particular threshold. For example, if you send a loyal customer a voucher over email, and they haven’t used it in 30 days, you can set up an automated email campaign to remind them to use it — helping to drive revenue for your brand.”
Alex Timlin is the senior vice president of verticals at the omnichannel customer engagement company Emarsys. Alex leads the company’s world-class client success organization to drive adoption and growth across 2,500+ clients in more than 100 countries — empowering them to better communicate with their contacts and customers across billions of engagements.
Emarsys empowers digital marketing leaders and business owners with the only omnichannel customer engagement platform built to accelerate business outcomes. By rapidly aligning desired business results with proven omnichannel customer engagement strategies — crowdsourced from leading brands across your industry — our platform enables you to accelerate time to value, deliver superior one-on-one experiences, and produce measurable results… fast. This industry-specific, outcome-driven approach combined with our customer-centric personalization, actionable AI, and a fully integrated customer data platform (CDP) — make Emarsys the platform of choice for more than 2,500 companies around the world. Join thousands of leading brands who trust Emarsys to deliver the predictable, profitable outcomes that their businesses demand and the highly personalized omnichannel experiences that their customers deserve.