Black(out) Friday?

A few thoughts on why retailers, e-tailers and b2b-tailers should focus on something other than Black Friday. Or start thinking about redefining how Black Friday is perceived.

By Søren Handlos, Managing Director, Knowit Experience Denmark

A few thoughts on why retailers, e-tailers and b2b-tailers should focus on something other than Black Friday. Or start thinking about redefining how Black Friday is perceived.

From red to black to madness?
For many, Black Friday is about securing sufficient turnover to turn the red figures in the accounts into black ones, to ensure that the year as a whole turns a profit. I think this explanation first emerged in the early 1980s.

It sounds good, but there are actually a few pitfalls here. Black Friday is increasingly seeming like a serious “retail blackout” with a focus on a single parameter, namely price. Or more accurately - discounted prices, whether fake or real. Many players are actually struggling with credibility here.

Another, far more interesting explanation from a sociocultural perspective can be traced back to Philadelphia in the early 1960s. The Friday after Thanksgiving Day (which is always on a Thursday) has for many decades been seen as the start of Christmas shopping in the USA, and many schools and some businesses have also shut on the following day. Stores, on the other hand, stayed open, which led to an increase in road traffic and large crowds of shoppers in the centre of Philadelphia. The police started to call this Friday “Black Friday” because they had to work 12-hour shifts. The media then picked up on the hysteria and the name “Black Friday” spread to the public domain.

Are shopping sprees the answer to the challenges faced by the retail sector?
Personally, I think Black Friday has become a shopping disease which spreads like influenza in the autumn. Cyber Monday, Black Weekend, Black November, Singles Day, etc. In this article, I question whether this “price fest” is the right medicine for the problems which the retail sector is facing.

The negative effects of campaigns and retail sales such as Black Friday are obvious; organisational stress for sales staff, customer service, marketing departments and IT departments. Not to mention logistics and systems which are put under pressure - sales peaks and perhaps short-sighted, expensive investments in support systems, services and hardware.

“But customers want lower prices!” Quite honestly, I don’t think that argument holds water. But as long as this is what is offered, it is what customers will demand, time and again. It becomes a self-fulfilling prophesy.

“Consumers have committed to experiences. 68 percent of global respondents
agreed with the statement “shopping for me is about the overall experiences,
not just the items I buy.” Omnishopper 2017. Mastercard.

From ‘Black Friday’ to ‘Daily experiences’
How do you get from a fairly simple focus on discounts to a constant focus on creating experiences based on data- and consumption-driven insight? A shift in thinking is essential and “Impossible is nothing” (Thanks Yoda).

Meaningful experiences are what your customers actually want. So, if your offers are seen as personal, relevant, present, interesting and valuable, customer relationships will flourish.

Start working on all the opportunities that our digital reality presents. Behaviour-based data, customer clubs, artificial intelligence, product information management (PIM), channel and touch point mixes, explore new delivery opportunities and new payment alternatives.

We are convinced that digital is not killing the retail sector. If anything, it is the retail sector itself which is doing that. This is too simplistic a view on price - which results in weaker margins and eats away at your organisation and the digital ecosystems you operate within.

I am of course fully aware that the idea of Black Friday disappearing is just a pipe dream, but I am convinced that a little more nuanced thinking can steer the retail sector in a healthier direction in purely commercial terms.

So, if you still want to play the “Black Friday Madness game”, be smart.
1. Realign your offer from a pure price towards customer-oriented experiences.
2. Make sure you have convergence as regards channel and touchpoints.
3. Scale and prepare your system-related and scalable cloud services, and make sure you have sufficient data capture and customer insight, as well as a constant focus on ensuring you have a digital and physical presence every single day. Being digital must be a seamless and integrated part of the experience.