We’ve all experienced it. You walk into a big-box store in September and think to yourself, “Christmas decorations already?” Every year, the holiday season seems to start earlier, for both brick-and-mortar stores and online retailers. In fact, the National Retail Federation (NRF) has reported that 40 percent of shoppers say they start buying holiday gifts before Halloween. That’s spooky! In today’s online climate, retailers that wait until Black Friday or Cyber Monday to offer their best deals miss out on delivering what customers really want: more time to shop.
To maximize seasonal sales, online retailers have started offering deeper discounts much earlier in the season. However, while they want consumers to spend earlier, they still want them to spend again on the more traditional shopping days, such as Black Friday and Cyber Monday. This early promotion strategy has effectively created “Gray November” — a holiday purchase period that spans weeks rather than a few signature days.
According to the NRF, the number of retailers offering promotions prior to Thanksgiving week in November 2015 was higher than the same period in 2014. Additionally, the discount percentage increased only slightly from the first three weeks of November heading into Thanksgiving week, which suggests deeper discounts were available in those earlier weeks. HookLogic reported weekly increases in both its site traffic and conversion rate index last November, all of which exceeded its baseline measurements.
Thanks to these earlier and deeper promotions, consumers have less fear of purchasing items and missing better deals later. For retailers, this is partially good. They can secure an earlier sale and create more time for repeat seasonal purchases, but this instigates a cycle where retailers are competing for those early consumer dollars by offering earlier discounts and finding less room to discount further on Thanksgiving weekend. That, in turn, might deter consumers from shopping on those signature days.
However, it’s not all doom and gloom. Even with this extended discount period, Thanksgiving weekend continues to be a strong weekend for sales, culminating in Cyber Monday. According to ComScore, Cyber Monday 2015 marked the largest online spending day in history. So while Black Friday and Cyber Monday aren't dead by any stretch of the imagination, to consider them the start of the shopping season is flat-out wrong.
So what does this all mean? The biggest impact this shift has on retailers may be on their non-holiday promotional strategy. By continuing to offer deep discounts throughout the year, retailers will have a difficult time differentiating themselves during the holiday season. They should focus more on creating an engaging experience and providing better value for customers throughout the year. Doing so will help build customer loyalty by cultivating a connection between brand and consumer, ultimately allowing retailers to discount less throughout the year and once again introduce comparatively stronger deals during the holidays.
Retailers that choose to ignore this shift in consumer behavior and wait for those traditional signature days are likely leaving revenue on the table. Who knows, maybe in a few years, Christmas in July will take on a new meaning as the official kickoff to the holiday shopping season. Until then, have a happy Gray November!
Greg Zakowicz is senior commerce marketing analyst at Bronto Software, a cloud-based marketing automation software provider.