3 Ways Black Friday Will Be Different This Year
The COVID-19 pandemic has upended how people live, work and shop. Traditional retailers were already struggling to adapt to changing consumer behavior. The pandemic caused revenues to soar for some retailers and to plummet for others. Black Friday in a pandemic is shaping up to challenge retailers in new ways. Consider these recent headlines:
- “Black Friday as we know it is finally dead.”
- “Will Black Friday survive the coronavirus pandemic?”
- “Has COVID-19 killed Black Friday?”
Let’s explore three predictions about Black Friday in a pandemic, and what this means for retailers' strategy.
Prediction No. 1: More Online Shopping
Analysts from investment bank and financial services company UBS predict that 100,000 retail stores will close by 2025 because of the impact from coronavirus, according to a Forbes article.
Government-mandated store closures during the pandemic have kept people away and driven them online to shop instead. From May 2019 to May 2020, e-commerce sales experienced the second largest recorded year-over-year increase, according to UBS research, with a sales increase for non-store retailers of 25.3 percent.
“Even when stores do open, it may take a while before people will regain their confidence about being safe in crowded places,” UBS Analysts Michael Lasser and Jay Sole said in a note to clients quoted in a USA Today article.
Among the new online shoppers are baby boomers, a group with the most disposable income to spend and a preference for making their purchases in traditional brick-and-mortar stores. However, the pandemic shutdown made this impossible, and almost 45 percent of baby boomers say they’re shopping online more as a result, according to the National Retail Federation’s spring consumer data.
In preparation for Black Friday, retailers should recognize the increase in online shopping and build a solid omnichannel approach, which include smoothing online transactions, offering more online-only deals, and making in-store transactions faster for customers who have grown accustomed to the speed and convenience of online shopping or pickup in-store for every transaction.
Prediction No. 2: Shifting Holiday Season Timelines
Given the unique nature of this year’s holiday shopping season, retailers’ timelines have been thrown off-course. Even Amazon.com, which doubled its year-over-year net profit, from $2.6 billion in July 2019 to 5.2 billion in July 2020, has had its retail calendar impacted by the pandemic. The retailer moved its Prime Day from July to October, which CNET speculated would “cannibalize holiday revenue.” This year will see Prime Day, Singles Day, Black Friday and Cyber Monday within 30 or so days of each other.
Retailers have had months to strategize how to maximize profits and how to treat Black Friday, whether it means moving all deals online, treating it as business as usual, stretching out their holiday sales season to October or even September, or something else.
Prediction No. 3: Earlier Black Friday Planning and Testing
If you haven’t developed a Black Friday and holiday season plan yet, now is the time to consider your approach, decide when you’ll freeze your code, and evaluate whether your e-commerce technology can handle the likely increase in Black Friday online shopping. Typically, planning and testing happen in August, but 58 percent of respondents to Catchpoint’s 2020 eCommerce Survey say COVID-19 caused them to plan and test earlier than usual.
The consequences of not doing so could be extreme this year, according to Deborah Weinswig, founder of Coresight Research in an Los Angeles Times article. Preparing now for the holiday sales season can help retailers survive “the greatest crisis we will hopefully see in our lifetime.”
“If retailers are focused on that,” Weinswig said, “I think we do see fewer bankruptcies and less permanent store closures.”
It’s almost certain that the pandemic will leave a permanent mark on retailer strategy and consumer behavior. The question remains, how different will they be when this pandemic is behind us.
Mehdi Daoudi is the CEO of Catchpoint, a provider of digital experience intelligence.
