It comes as no surprise that retailers are feeling some anxiety in the build-up to Black Friday this year. Faced with the worst cost of living crisis in our generation, Brits are having to cut back on any non-essential purchases, theoretically threatening retailer’s profit margins.
However, in our latest study of 2,000 UK shoppers, we found that one in five people (22%) are in fact looking to increase their spending this Black Friday. And, despite their financial constraints, one in ten shoppers are looking to take advantage of price cuts to complete their Christmas shopping early. With the average consumer expecting to spend £238 over the Black Friday weekend, we’re looking at a 25% potential spending increase from last year.
The research therefore shows that, rather than battening down the hatches, many customers are instead taking a more considered approach to their spending. Having been forced to navigate tough scenarios with limited funds during the pandemic, consumers are more competent than ever at spending tactically, recognising value for money and navigating quickly between different retailers for the best offers.
Black Friday is also one of the biggest periods of the year for ‘mental accounting’ – the notion that money has different emotional value to us depending on how we accrue it, categorise it, and spend it. It’s unrealistic to expect consumers to have no recreational spend even in times of crisis; purchases that support a club, like a football team for example, are likely to be more emotive than cost-effective.
On Black Friday, brands have a captive audience for deals that may top the emotional balance, with suitably impressive discounts ‘convincing’ us to spend despite the pressures of the cost-of-living situation. It’s not ‘bill money’, after all!
All this spells huge opportunity for retailers – but how can they guarantee that their marketing cuts through the noise? With shoppers under more financial strain, and more astute at navigating and comparing offers than ever, their purchases require a higher level of planning to ensure they secure the best deals.
If the price is right
Preparation is key. By planning their marketing approach ahead of time, brands can ensure they are reaching these customers who are looking to purchase and converting their desires into sales. With customers beginning to plan their purchases now, retailers should be ahead of the game – particularly given the fairly static nature of Black Friday, and its proximity to other events and holidays, like the World Cup and Christmas.
It’s crucial, to start with, to recognise the motivations for Black Friday shopping. Our research suggests that seeking the biggest discounts (27%), and taking advantage of free returns (25%), are the most significant drivers for Black Friday spend.
Interestingly, this doesn’t necessary apply to specific products. 21% of UK shoppers don’t know what they’ll buy, but intend to buy something, while more than half (53%) of UK consumers would consider a purchase they weren’t otherwise planning if offered a discount of more than 25%.
This is where mental accounting can prove extremely lucrative. In other words, shoppers won’t look a gift horse in the mouth – if you know what to discount, and how much by.
Where and when
Of course, it’s not just about shoppers want to buy, but where they want to buy it – especially for a consumer base that has learned to be as flexible as possible over the pandemic.
While Black Friday is often considered a digital-only phenomenon, with 53% of consumers looking to purchase online, almost 30% are looking to return to the high-street ready for the big day. These figures suggest that digital and physical retail are increasingly seen as two sides of the same coin, with consumers happy to explore both in pursuit of the best deals.
To maximise sales, marketers need to ensure they spread themselves across each channel, ready to secure the customers who are looking to spend. A general approach over common channels like email isn’t sufficient – you must be able to meet customers where they want to be met, with the right offer at the right time.
A personal touch
The pervasive message through all this advice is the need for personalisation. Brands need to understand the behaviours, preferences, and concerns of consumers as individuals, showing an understanding of exactly what, and how, they want to buy.
Shoppers will be inundated with offers and marketing outreach but are more discerning than ever. If you’re able to discount their preferred products, and then meet them on their preferred channel with that offer, you’re in the best possible place to drive the customer loyalty that is so important to your bottom line in the long run.
To do so, you must have a data-driven understanding of customers as individuals. Every shopper will have different preferences, behaviours, and motivations. It’s up to you to develop a proper understanding of each individual and use that knowledge as the basis for a successful Black Friday.
Sara Richter, CMO, Emarsys