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Is there any relevance of previous years’ Black Friday weekend trends to this year’s event? Can we use history as relevance to our current situation?
Although shopping behaviours have changed in 2020, Kepler believes there are still fundamental trends which retailers need to take into account.
The Black Friday retail sales result from 2019 was generally very positive. On a Like for Like basis over 21 days (14 up to and including Black Friday, 7 days following), retailers showed a 14% increase on prior year Sales $ – a rare event in 2019, to say the least!
There were two key standouts:
- They went early!
- There was more “pre shopping” in 2019 vs 2018. By the day prior to Black Friday, 2019 was up 6% on the same time prior year.
- Retailers that released promos early, capitalised on traffic inflows prepping for a bargain.
- Retailers set budgets on the same timeline from the prior year.
- Stores were well behind target before the sales came in.
- Did this have a demotivating effect on staff? Were rosters pulled back in accordance with sales being behind expectations?
Predictions
It is not difficult to predict that this year the Black Friday weekend will be a bonanza! But there are significant dangers to performance and these relate to three core areas:
- Starting your promotion in advance of the weekend – everyone will be on discount.
- Do not over discount – there is pent up demand, promotions should be aimed at ‘maintaining your brand’s relevance’, encouraging inside traffic not sales whilst maintaining margins.
- Store capacities will be an issue – retailers who understand their stores’ numbers, that is the volume of shoppers a store can safely take, will ensure their shoppers feel comfortable to shop and purchase and not leave the store or even not entering the store because of perceived safety issues
All three areas need to be thought through and addressed. The following provides a window into last year and we hope you enjoy the insights and learning for this year.
Happy trading.
The Overall Sales Picture – 2019 and 2019 vs 2018
The Black Friday retail sales result from 2019 was generally very positive. On a Like for Like basis over 21 days (14 up to and including Black Friday, 7 days following), retailers showed a 14% increase on prior year Sales $ – a rare event in 2019, to say the least!
There were two key standouts:
- There was more “pre shopping” in 2019 vs 2018. By the day prior to Black Friday, 2019 was up 6% on the same time prior year. Retailers that released promos early, capitalised on traffic inflows prepping for a bargain.
- Retailers set budgets on the same timeline from the prior year, meaning stores were well behind target before the sales came in. Did this have a demotivating effect on staff? Were rosters pulled back in accordance with sales being behind expectations?
The suggestion this year, is that we again believe there is growth in the leadup to Black Friday – maximising the length of the offer (assuming stock intregrity) prior to the event will reap rewards.
We also suggest that targets are aligned to the new timing of Black Friday for 2020.
The Overall Traffic Picture – 2019
Sales Conversion (defined as the number of transactions divided by total Inside Traffic) for the period showed very healthy results and a discernible upwards trend over the period.
Similarly Shop Front Conversion (defined as the proportion of Outside or Passing Traffic that then entered the retail store fore 30 seconds or more) similarly rose. This rise in Shop front Conversion is vital for two key reasons:
- The measure of Shop Front Conversion utilising a basis of Dwell Time greater than 30 seconds, with accurate staff exclusions creates a different measure of traffic – this becomes transaction-possible traffic. The drop-off, corner cutter, or those stepping inside to avoid obstacles in the walkway are removed. Staff and stores are measured based on real opportunities rather than regretting their Inside Traffic count; and
- This measure did not trend upwards since early 2018. Kepler has viewed Shop Front Conversion as the battleground for retail. Having started well below 2018 results, the results increased to, or even sometimes above LY results on the same relative trading day
Post Covid lockdowns, we expect these results to continue to shape in positive fashion for Black Friday 2020
The Value of Dwell Time – Keep It DOWN!
We have analysed a metric we call “Strike Rate” – that is, the amount of time spent inside your store by all transaction possible Inside Traffic (with an accurate staff exclusion) per transaction. So for example, if we had 2 people inside for 5 minutes each that resulted in 1 transaction, this would give a Strike Rate of 10 Minutes ( and yes, we proudly accept that there may be some Cricket statistic nerds amongst our staff).
We also like to add colour to ATV metrics, and define our Average Visitor Value – the $ spend per Inside Traffic, as a measure of total store engagement to encourage the primary or even additional purchase.
Again, there were two key highlights:
- The average time it took Inside Traffic to transact in 2019 was significantly above 2018. In some instances it took 10% longer to complete a purchase.
- Customers did not like this. The longer it took, the less transactive customers existed, and the lower the value of the purchase.
It is worth noting that this is pre-Covid. We have seen the Dwell Time barrier increase over 2020 year to date. With traffic restrictions and capacity limits, service models must be sharp, on point, well engaged and well versed in completing transactions. To make customers dwell in store will cause additional lost revenue in 2020.
Conclusions
We expect that 2020 will deliver less traffic into stores. The population is wary of crowds. And retailers may have capacity and space limits to deal with.
Our suggestions are this:
- There is a quantifiable link between customer efficiency and reduced dwell time, with increased transactions and transaction value. Ensure that staff are primed to close sales well and completely. Rehearsed scripts, combinations and baskets will be key.
- Go early with key offers. Make it as accessible as possible as early as possible. And keep it alive as long as possible. Traffic will flow in a different way, but traffic will purchase when the offer exists. Reward the retail-intentional Inside Traffic with your offer when it suits them.
- Plan accordingly. Set your targets to the 2020 timeline, not the 2019 timeline. Ensure staff rosters are aligned to minimise Dwell and maximise transactions and Visitor Value at key times. Roster intensity and consistency could be the difference in 2020.