Black Friday is a national sales event that takes place the day after Thanksgiving, it’s a tradition that offers deep discounts and deals to kick off the holiday-buying season.
What’s the expectation for the 2022 Black Friday sales season, and how can retailers make the most of Black Friday? That’s what we’re going to look at in this blog.
2022 spending stats: what to expect
A survey by Deloitte found that inflation will have a strong impact on holiday sales this year across the board. Here are some their findings:
- Consumers will spend less on gifts for family and friends, but will allocate more money for home entertaining and socializing in general.
- Consumers will spend less time shopping (5.8 weeks compared to 6.4 weeks last year), visit fewer websites and apps (9.1, down from 11.1 in 2021), and visit fewer stores (5.9, compared to 6.6 in 2021).
- Low-income earners plan to spend 25% more than last year, while high-income earners plan to reduce spending by 7%.
- Consumers are more likely to give gift cards as presents, a reaction to higher prices and supply-chain problems.
- 32% of shoppers plan to buy resale items (secondhand) to cut costs.
- 35% of shoppers are expected to do so in-store. That’s a bit more than the 33% that shopped in person last year, and almost up to the 2019 levels of 36%.
- Around 52% of consumers will use smartphones for their online holiday shopping, while 34% will use social media.
- 60% of consumers will choose another brand if the one they want is out of stock; and around 65% will opt for another brand if their first choice is too expensive.
These findings underscore the fact that inflation has made holiday shoppers think before they buy and spend more smartly. They’re also a sign to retailers that they’re going to have to be much more strategic if they’re going to have a successful holiday-buying season, especially on the main day, Black Friday.
This strategy breaks down into three areas: addressing consumers’ pain points, investing in the right tools and technology, and setting the stage for a good shopping experience.
We’ve broken it down into five suggestions you can easily put in place:
1. Sell early
Studies show that this year, 2022, in a reaction to higher prices and expected shipping delays, a lot of buyers want to get their holiday purchases in early. With this in mind, retailers should use the following tactics:
- Promote products early, weeks before Black Friday. Attract early shoppers by offering deep discounts and irresistible offers.
- Early-bird offers. This is a great strategy to boost sales and also encourage customer loyalty.
- Limited offers. Putting a timeframe on an offer builds a sense of urgency. It’s also likely to encourage FOMO – fear of missing out – from shoppers.
- Teasers and sneak peeks of Black Friday deals. Ideally, these should be promoted on the retailer’s social handles and social media as well as their websites. Today’s wide use of smartphones makes this the essential way to grab shoppers and let them know about the offers.
2. Say yes to both offline stores and online sales channels
Post-pandemic, customers are returning to physical stores, and this year more of them are expected to do so than last year. For retailers that have started ecommerce outlets, this means having brick-and-mortar places as well. These offline and online facilities can jointly be managed effortlessly with a centralized Point of Sale (POS) system.
DEAR syncs all the sales channels. It’s a single system through which all sales, irrespective of the number of platforms, can simultaneously be processed. It can also facilitate returns and refunds. On top of that, DEAR produces precise reports and real-time information that can be used to make the right business decisions.
3. Have enough product in stock, and price it competitively
Black Friday sales are always higher than they are normally, and the plan is to have it be a start to a successful holiday season. Yet we know that in today’s market, if a customer can’t get what they want immediately, and get it at the right price, they’re going to look elsewhere. For the retailer, this means having enough items at hand to fulfill orders, and pricing them competitively. So in addition to keeping an eye on stock levels, it’s important to know what your competitors are doing. When it comes to having the right stock levels, inventory management software like DEAR can do the heavy lifting. It can manage volume, several warehouses, and stock transfers, all of which will translate into quicker and more accurate order fulfillment.
DEAR creates product families, which group similar products together. It then automatically assigns them a unique Stock Keeping Unit number (SKU). Using these SKUs, the system can sync physical sales with inventory in storage, enabling flags to be raised when a particular item is in short supply. If that happens, DEAR can actually reorder more of that item. To top it all, DEAR has a tiered- and custom-pricing feature that can be used to attract both high-spending and price-conscious customers.
4. Focus on existing customers
Companies have a 60-70% chance of selling something to an existing customer, and only a 5-20% chance of attracting a new one. That’s according to Zippia. Given this, Black Friday is an ideal time to reward loyal customers.
A good way to do this is by sending personalized emails that could contain anything from season’s greetings to current deals, discounts, featured products, and new arrivals. The problem for a retailer is identifying the right group for these targeted emails quickly and easily. DEAR maintains mailing lists that can do just this. If there’s an upcoming deal on cosmetics, for instance, the system could separate out the regular female customers and email the pertinent information to them only. Of course, it’s not always so easy to pick out those that would best respond to a particular offer. In those instances, the right group can be identified by their order histories, and a system like DEAR can scan those quickly.
5. Offer free shipping
Digital Commerce 360 says that 76% of consumers will place orders if they get free shipping. But that’s not always feasible for retailers. The product may be worth less than the cost of shipping; it may be too heavy, or the customer may want it delivered to a remote or far-away place. There are ways for a retailer to overcome these roadblocks and keep their profit margins intact, however:
- Free shipping on all orders over XYZ amount,
- Free shipping to a few US states,
- Free shipping on all orders for 24 hours,
- Free shipping for specific items, and
- Free shipping for first-time buyers.
Before any of these shipping offers can be put in place, a retailer has to know actual costs. A centralized system like DEAR can provide this information (it can also print the shipping labels). It integrates with a number of different shipping carriers, and supports dropshipping and third-party fulfillment services like Fulfillment by Amazon (FBA), which takes care of the shipping.
Final thoughts
Black Friday is an important day for the start of the holiday shopping season. Make the most of this sales opportunity by investing in a robust system like DEAR. By keeping on top of stock levels and identifying those that are the best sellers, a lot can be done to ensure your Black Friday is a retail success story. To learn more about DEAR Systems, call one of our experts today.