Fast food, Halloween and ‘prom nights’ – just three American imports which have made it big in the UK. Next on the list is Black Friday, which has grown in popularity for retailers and customers alike. In 2016, Brits spent a massive £5.8 billion over the Black Friday weekend, including Cyber Monday – whilst totals for 2017 are showing that Cyber Monday has eclipsed Black Friday on revenue across online purchases.
For retailers, this spells a huge opportunity. But how can your business take advantage these developments? It is no longer about big offers and glossy marketing campaigns, there has been a tactical shift in the way retailers are managing their product supply in line with online demands.
What is Black Friday?
Black Friday is the name given to the day after Thanksgiving in the US – and has been since the 1950s. For most Americans, it marks the start of the Christmas shopping season, with Black Friday sales in almost every shop. It’s no surprise then, that it’s one of the busiest shopping days every year in the States.
However, unlike in the US, its UK history comprises just four years. In 2013, Asda introduced the first major Black Friday campaign in the UK. Why? They’re a subsidiary of US-owned Walmart, who wanted to spread the love (and sales) across the pond.
Just one year later, the likes of John Lewis and Argos jumped on board with their own deals and discounts for Black Friday. And by 2015, it was the biggest day of shopping in the UK with over £2 billion spent in just 24 hours.
Growing in more ways than one
As well as growing in popularity, the Black Friday sales period has grown in duration. The Monday following Black Friday is now known as Cyber Monday, targeted specifically at online sales, with Small Business Saturday also being coined. It’s led to the whole weekend being labelled “Black Friday Weekend”, with a growing trend for retailers such as Amazon, Argos, and House of Fraser dropping prices dramatically in the two weeks leading up to the main event.
It is clear that mobile purchasing is also on the rise, with data showing that around 46% of all consumers viewing items on a mobile device before purchasing, and Adobe stating that mobile purchases have made up over 33% of all Cyber Monday revenue in 2017. Focus is also being placed on increased delivery options, speed of delivery and providing deeper reductions in price.
It’s clear that companies are doing their utmost to get customers to buy in the late-November sales but is there more retailers can do to win customers over?
This year’s Black Friday Weekend saw the first signs of stagnation, with only a 0.6% like-for-like growth in sales, which highlights a failure to shift underlying trends in spending.
Retailers would be wise to focus on differentiation, personalisation and ensuring availability, they need to convince customers that they are different – even if that’s not necessarily the case, social media campaigns, promotional bundles and extra customer service can all contribute
Once retailers have differentiated themselves, it’s also essential that they have the capacity to cope with a higher volume of orders. Black Friday sales are a huge opportunity to secure customers for the rest of the year, which is be done by offering competitive or marketing leading services. That’s not going to happen if you’re short on stock or lagging behind or give the customer a negative experience.
So, how can you provide the same service during these seasonal spikes? Here are our top three tips:
1. Flexible and efficient warehousing
Consider your space. Do you have enough to house all the extra stock? Stock holding around peak can be difficult to manage because many businesses won’t provide year-round capacity for a short-term problem. Businesses should be considering whether they can strengthen their own infrastructure by making better use of the space that they have available to them, considering outside storage facilities or finding suitable external warehousing close to the primary warehouse.
Cross-docking is a really useful way to set up during the peak season, as DC’s need to keep their inventory moving fast to keep retail stores shelves stocked. Cross Docking is when incoming products are unloaded and immediately loaded onto outbound vehicles – cutting out the storage in-between. Cross docking is all about managing inbound delivery with outbound, and ensuring the correct number of products go into stock at any one time. This can be made easier by selecting a site closer to retail stores so product can be fed in more frequently.
2. Make the most of Value Added Services
Value Added Services (VAS) services are those offered by carriers to stand out from the crowd. They include everything from packing and labelling to returns handling and repairs. As the name suggests, they add value for the retailer and can make the distribution process quicker, easier and more effective to the end user.
Retailers are using these services to their full advantage in peak sales periods like Black Friday. By using kitting, re-labelling and re-packaging to prepare high-demand items ready to go, such as customers favourite ‘gift box’ items, they are able to deliver unique gifts that many of their competitors are unable to provide. Returns handling is also a crucial service around Black Friday and Christmas, with the Thursday after Christmas seeing the highest number of returns, the focus should be on providing an exceptional service to every customer.
3. Adapt to change
As well as storage flexibility, it’s essential to have flexibility within your team in peak sales periods. Focus on preparing your workforce across the year, and upskill them in all areas of your operation, so that you can be confident in ensuring everyone is able to jump into whatever role might be the most in demand. So, even if England is hit by blizzards or systems go down, you are in a position to fulfil orders
Prepare yourself for the peak
Like most things in business, success on Black Friday is all about preparation. The companies who manage best are those who have contingencies and have tested systems in place. If you have any further queries about preparing for the spike in sales, such as brokering extra warehouse capacity or logistics services, we’d love to hear from you. Get in touch to talk to a member of the Bis Henderson Space team today.