- Black Friday Shopping Could Look Very Different This Year
- Yes, it will still happen
- Sales will shift further online
- Doorbusters could be deep
- Retailers still have some planning to do
- Five ways Black Friday shopping will be different in 2020
- A smaller Christmas bottleneck
- A rush for online delivery
- Reduced workforce capacity
- The Christmas shopping experience
- Doomsday predictions about the end of Black Friday are now reality, as the pandemic threatens the most important shopping day of the year
- How do you replicate excitement without crowds?
- Is this the death of Black Friday as we know it?
Black Friday Shopping Could Look Very Different This Year
Doors bursting open at stores. Crowds spilling into the aisles. Elbows brushing up against others. Products flying off shelves. These are the hallmark images of Black Friday.
That was before the COVID-19 pandemic gripped the nation. Now, the future of the biggest shopping discount day of the year is unknown.
Yes, it will still happen
For many, shopping on the day after Thanksgiving is a tradition. Historically, it’s also one of the best days of the year to save money on big-ticket items electronics and appliances.
But with social distancing the norm, it’s hard to imagine shoppers camping out on the sidewalk next to one another this year ahead of Nov. 27. It’s even more difficult to picture stores overflowing with excited shoppers.
Retail experts believe Black Friday will still happen in 2020, despite the pandemic. But there’s no disputing the fact that it won’t be a traditional experience.
“Being there at the crack of dawn, waiting in lines, the hustle and bustle in the store — that’s probably not going to exist,” says Jane Boyd Thomas, a professor of marketing at Winthrop University in South Carolina who has done research about Black Friday.
Sales will shift further online
For years, Black Friday has shifted to online channels, merging with Cyber Monday into a weekend-long event. The pandemic is set to further cement that transition.
After months of shelter-in-place orders, consumers have become more comfortable shopping from home. That will ly lead to an increase in online Black Friday purchases this year, says Dora Bock, associate professor of marketing at the Harbert College of Business at Auburn University in Alabama.
But the changes could go a step beyond that. COVID-19 has illuminated failings in the supply chain, and Thomas believes many consumers will opt for contactless curbside pickup options (as opposed to shipping to their home) to guarantee that the items they’re buying online are actually available — and not stock.
Still, that doesn’t necessarily mean stores will be ghost towns.
“They want something normal,” Thomas says of some shoppers. “I do think that will drive people to go in to see the lights, to see the trees — all the stuff that goes with that experience.”
Doorbusters could be deep
While consumers have largely focused on purchasing essential items during the pandemic, Bock anticipates competitive prices on discretionary products apparel and jewelry.
Consumers might also have an appetite for traditional Black Friday categories, such as computers. Thomas expects these discounts will be appealing, considering how critical laptops have become as Americans work, learn and interact virtually from home.
“There’s a large number of consumers that look forward to Black Friday because it provides them a sense of excitement,” Bock says. “People feel good when they get a good deal.”
Retailers still have some planning to do
There are a number of unanswered questions about how Black Friday will look. After all, retailers are still figuring out how to market the holiday shopping season.
One possibility? Black Friday may become an extended period, rather than a single day of sales, says Michael Brown, a partner in the consumer practice of Kearney, a global strategy and management consultant.
“I’m expecting that Black Friday as we have grown to know it cannot exist in a COVID world,” Brown says.
“I think we have to really not think about Black Friday and think more about when the launch of the holiday season will begin. I think that has to be pulled up by retailers as early as November 1,” he says.
Throughout the holiday season, stores will have to perform a delicate dance. Shopping may become just as much about public health as it is about discounts.
Retailers have merchandise to sell, but promoting in-store only specials could be seen as insensitive by shoppers with preexisting medical conditions, Bock points out.
“I think it’s really going to be a balancing act for retailers to encourage sales, encourage people to buy, encourage trust and promote spending — but promote it in a way that shows they care for their customers’ well-being,” Bock says.
There’s one more wild card, Brown says. What type of Black Friday shopping environment will state and local governments allow? Time will tell.
This article was written by NerdWallet and was originally published by The Associated Press.
Five ways Black Friday shopping will be different in 2020
Friday November 27 marks a key date in the UK’s retail calendar as consumers head online to take advantage of thousands of so-called “Black Friday” discounts.
Although the name was traditionally used in the US for the Friday following Thanksgiving, in recent years the shopping event has risen to prominence in the UK as the biggest sales day of the year.
The event has now also expanded over the weekend to include “Cyber Monday”.
In 2020, people in the UK will spend an estimated £6 billion on Black Friday and Cyber Monday sales, compared to around £5.6 billion in 2019. However, with restrictions in place due to the COVID-19 pandemic there are many ways that 2020 will look very different to both retailers and consumers.
It has been an extremely tough year for UK retail. COVID-19 lockdown restrictions have hit traditional high street stores hard and this set to be compounded by the prediction that in the six weeks before Christmas, footfall across all UK retail destinations will be reduced by 62%.
With consumers moving online to purchase what they need, many retailers have been offering discounts and sales throughout the year in an effort to attract customers in an extremely competitive market.
Some retailers such as Marks & Spencer and Next will not be taking part in Black Friday at all. Perhaps more surprisingly, other retailers will be bucking the trend by raising their prices or actively campaigning against the need for discounting.
A smaller Christmas bottleneck
Retailers are trying to manage the shift from shopping in-store to online that has increased during the pandemic. By flattening the curve of the peak of online orders on Black Friday and at the beginning of December for Christmas, retailers are trying to encourage consumers start buying earlier and throughout this period.
This is the reason why retailers have been offering discounts over a longer period rather than focusing their efforts on online promotions dedicated to a single date. Retailers are ultimately trying to achieve a much more stable and constant demand for goods over a longer period in the lead up to Christmas rather than the usual peaks.
This approach seems to be taking effect. Research from John Lewis and Partners in October suggested more than 60% of consumers were planning to buy presents before December, with only 2% saying they planned to wait until Christmas Eve.
A rush for online delivery
For many retailers, Black Friday 2020 will present a significant challenge to their online delivery services as consumers will be unable to shop in-store.
While online shopping and home deliveries are increasingly being used by shoppers, the surge caused by COVID-19 has resulted in a 10% increase in comparison to a similar period (March to August) in 2019.
But the UK’s delivery system is not currently equipped to manage the huge amount of online orders expected in the lead up to Christmas.
The capacity within the UK delivery infrastructure cannot service the increased demand.
Many major UK retailers still place a huge emphasis on their physical high street stores, which means online giants such as Amazon can reap the rewards of Black Friday sales.
Global marketing communications company, Wunderman Thompson, predicts that Amazon will account for 65% of all Black Friday spending in 2020 with at least 67% of UK consumers ditching bricks and mortar outlets in favour of web-based spending.
Over the Black Friday period in 2018, the online giant took a 26% share of UK sales. Since furlough was introduced in response to COVID-19, 35% of UK online spend has gone to Amazon.
Reduced workforce capacity
In a further challenge to the online delivery infrastructure of UK retailers, a range of practical challenges from COVID-19 mean this Black Friday will be very different.
While online demand from consumers has never been higher, COVID safety restrictions and financial uncertainty means the capacity to deal with online orders has been reduced. In practical terms, this includes factors such as the space to store goods in warehouses and the reduction of staff to manage these spaces and physically pack online orders.
The workforce that would be busy packing and delivering Black Friday orders could be reduced due to social distancing, and safety measures in packing facilities. Meanwhile, furlough and the effect of COVID-19 could force groups of workers in the supply chain to self-isolate or take time off at any given moment.
The Christmas shopping experience
With the government’s COVID-19 lockdown restrictions set to be lifted on December 2, those consumers who decide to do their shopping in-store will have a different experience to usual.
COVID-19 has put paid to the experiential Santa’s Grottos and Christmas activities traditionally seen in shops that involve closer contact between people. Instead, many retailers are moving these online with innovations such as virtual Santa Clauses.
Virtual Santa? Studio Romantic/Shutterstock
And with safety at the forefront of retailers’ minds, which has led to them reconfiguring their stores to make them more COVID-safe by providing wider aisles and more distance between products, consumers may prefer the online experience in the build-up to Christmas without the emphasis on Black Friday sales – a move that some retailers at least will welcome.
Doomsday predictions about the end of Black Friday are now reality, as the pandemic threatens the most important shopping day of the year
The Black Friday of yesteryear that has been characterized by long lines, crowded stores, and shoppers hustling for deals is the antithesis of what the retail experience in the US has become during the pandemic.
This makes the holiday season especially complicated for retailers this year.
They not only have the responsibility of creating a safe shopping environment for customers and employees – social distancing, shorter store opening times, and ramped up hygiene protocols, for example – but also ongoing inventory issues that have come about as a result of the pandemic. And in the meantime, a global recession lingers in the background that means that customers are ly to be cash strapped and less willing to splurge come November.
Walmart, for one, has decided to close on Thanksgiving, ending a long tradition of kicking off their Black Friday sales on the holiday.
But very few other retailers have spoken publically about what Black Friday will look this year at this point.
But in the rare glimpses into their plans, it's clear that is presenting a challenging situation and one that many retailers still have no idea how to handle.
“Everyone is trying to figure out how this is going to work this year,” Nate Shenck, managing director of North American retail at Boston Consulting Group (BCG), said in a phone conversation with Business Insider.
“In reality, we are still figuring out how to operate in this new environment.
Retailers are trying to get their sea legs around how you keep people safe, operate efficiently, and generate excitement and demand in a volatile and somewhat unpredictable environment for the next 12-18 months.”
However, the idea of a “traditional doorbuster sale where you have throngs of people waiting outside fighting for deals seems completely alien,” he said. “The irony is the biggest winners of Black Friday this year are ly to be the stores without a crowd and the trick is going to be replicating the excitement, traffic, and the spend without the actual traffic and crowds.”
How do you replicate excitement without crowds?
According to Macy's CEO Jeff Gennette the success of Black Friday 2020 hinges on retailers' offering a longer holiday shopping period and leaning into digital in a big way.
“We expect it to start in full force after Halloween,” he said in a recent call with investors. “We have a very strong game plan about how we're going to keep this trend of digital going. That's going to be huge for this holiday season.”
Curbside pickup will also play an important role, he said. Macy's launched this service during the pandemic and Gennette expects it to be invaluable during the holiday shopping season.
“Curbside pickup is going to be a big secret weapon for us. We didn't have that last holiday season. First off, the speed and the safety of curbside pickup, we think that's going to be huge for this holiday season if they're [customers] not comfortable to walk into a store,” he said.
Macy's launched curbside pickup during the pandemic. Robin L Marshall/Getty Images
But many of these brick and mortar retailers rely on shoppers coming into the store to drive the big sales. The idea is you come in for one item but in Black Friday rush, leave with many more.
To circumvent this problem, retailers need to be more targeted and creative in their approach to deals to get customers to spend this year, experts say.
It's about “figuring out how to reach the customer in the most valuable segments and being creative in how you reach them,” Shenck from BCG said. This might include ramping up influencer campaigns, advertising more on social media, or generating awareness earlier in the year, he said.
We could also see more bundles of offers online to replicate the in-store experience of buying more than you planned.
Dave Marcotte, a senior vice president at Kantar Retail, said that stores will also need to rethink what the value of Black Friday is for shoppers.
“Beyond panic, what can I do to create a value for that day or that weekend that will drive people to me?” he said in a phone conversation with Business Insider, especially in the context of a recession when consumer spending is tight.
“For years, Black Friday was a no-brainer, you just took whatever you thought was going to be a hot item and you put it at a hot price and waited for the shopper to show up … You can't do that this year, you have to really think through the valuation equation,” he said.
One way this could be done is by offering exclusivity and being the only retailer to be selling a specific item. “This might be a big sell because of the problems with supply chain this year,” he said, specifically, that retailers have had problems with products being stock.
Better credit terms could be another motivating factor. “There are a lot of plays they can make in that space and not change the price,” Marcotte added.
But we can still expect to see big discounts.
“This whole year has already been very promotional as retailers look to clear down inventory, so Black Friday will need to be full of good bargains to draw in shoppers,” Neil Saunders, managing director of GlobalData Retail, wrote in an email to Business Insider.
But ultimately, this means razor-thin profits for retailers as heavy discounting and higher fulfillment costs from online orders weigh on margins.
Is this the death of Black Friday as we know it?
For years, analysts have been calling out the death of Black Friday as foot traffic to stores has slowed as year-round deals and the growth of online shopping take the pressure off the day.
What we are seeing now in retailers' plans to shift toward digital and stretch the holiday period out is just an acceleration of a trend that was happening before, experts say.
Year-round deals and the growth of online shopping have taken the pressure off Black Friday. Bill O'Leary/Getty Images
“It has become less of a physical event and more of a virtual event in the last five to six years,” Marcotte said, adding that it doesn't have the same “immediacy” that it once had.
And he blames online rivals for this.
“Amazon and other online retailers have used it as a means of reducing the competitiveness of retailers that would have traditionally been in that space.
“You honestly can't say Macy's or Nordstrom have as much to do with Black Friday other than they participate; they don't drive anything, they don't drive thinking. That wasn't true 20 years ago, 20 years ago they set the pace, the tone, and what is going to be sold,” he said.
By beefing up their online presence this year this could give them more of a competitive advantage against online rivals. For those that haven't got that kind of online presence, competing in Black Friday 2020 is ly to be far trickier this year.