Black Friday is not dead, it’s just broken

Lots of retailers are opting out of Black Friday this year, believing there is little or no value in the shopping bonanza. That might be true, but only because many of them have been going about it all wrong.

The talk this year around Black Friday is that it is dead. Google the term and the results will yell at you from your screen: ‘Black Friday is dead. Long live Black Friday’.

And in some ways, that’s true. There are less retailers taking part, both in the UK and the US this year. BestBlackFriday.com, a site that lists stores that are offering Black Friday deals, has stated that more stores than ever are not taking part.

So, are retailers starting to believe that there is no value in participating? Maybe. But if they are, then they’re looking at the whole concept from the wrong direction.

In the interests of retailers

Many retailers were using the event to try to clear items that hadn’t sold well or that they had too much stock of.

The controversy that surrounds Black Friday sprouts from the idea that there are better deals to be had at other times throughout the year. What was once the chance for retailers to offer unbelievably cheap prices on products, which during the rest of the year are far too expensive, instead became an opportunity for brands to flog the products that no one was buying.

Many retailers are using the event to try to clear items that haven’t sold well or that they have too much stock of. Others use it to try to get rid of older models of specific products, especially in the wake of the release of a more recent model.

And why would anyone want to buy an old model, even for a dirt-cheap price, when they know that it is already hugely outdated, and that more recent and better models are now available?

That’s not what consumers want – they were promised a day when they could buy the pricey and valuable products at cheap prices. Instead they were tricked by retailers trying to play a short game.

That was the retailers’ mistake and they shouldn’t be surprised that customers are wise to it.

Playing the long game

The whole concept of Black Friday is best suited for a long game scenario. It is an opportunity to put pricey products in the hands of people who would never usually buy them, and then leave a seed of desire to maybe come back and buy more, but this time at full price.

Amazon know and have quantified the benefit of getting their products into a customer’s home and the value of a proper relationship with the customer.

One retailer who gets this right is Amazon. Year after year, they offer fantastic prices on some of their most valuable tech. Sure, in the short term, it will cost them. After all, there’s no short-term profit to be made in undervaluing valuable products.  The profit, however, lies in creating an opportunity for that customer to come back for more.

What Amazon has, that few other retailers have, is a strong insight team and belief in data at the heart of their business. They know and have quantified the benefit of getting their products into a customer’s home and the value of a proper relationship with the customer. This knowledge means that the decision of selling key lines at minimal to no profit is a much easier one to make, as they know and understand the long-term benefits.

By utilising their data in a similar way, retailers can understand what products might drive loyalty. Sure, it might cost them some cash in the short term, but it’s worth the reward of having many of those customers make the return journey in the long journey.

So, let’s not be so hasty as to herald the end of Black Friday. Instead, retailers just need to rethink how they use it.

Latest

7 Steps to Data Transformation

Data transformation demands clearly pronounced goals, strong engagement strategies and a willingness to move quickly and risk failure. These require solid, visionary leadership in order to inspire buy-in across an organisation. This Whitepaper, authored by data pioneer Edwina Dunn details the 7 success factors needed for data transformation.

Read More

Leading high street bank onboarding SMEs

Starcount mined a High Street bank’s business data, third party data and Starcount Observatory data to better understand the SME market, their needs and wants.

Read More

Unravelling the urban myths of the pensions industry

Starcount has delved into the state of the UK pensions industry, examining how disruption in the space is causing many providers to reassess how they communicate with their customers.

Read More

Retirement & Investments business

Starcount created actionable insight and a data-focused strategy for a leading retirement & investment business, developing a deep understanding of their customers and collating data to identify significant savings in their business.

Read More

The key to understanding emotional loyalty

This Whitepaper examines our revolutionary new approach to data science using emotional analytics, revealing how peoples' passions predict purchase.

Read More

Your Life: A revolution in approaching education

Starcount worked with community interest company Your Life to create deep insight into how schools are performing based on how highly they perform in STEM subjects.

Read More

Boosting test drives by personalising communication

Starcount worked with this automotive brand to maximise engagement and increase sales of their new model.

Read More

Customer centricity and the future of banking

Starcount has delved into the future of the banking industry, looking at how different forms of disruption, such as the Open Banking Initiative, will affect the industry.

Read More