Against all odds: Successful sales planning for Black Friday 2021
Maximize your potential this Black Friday
Against all odds: **Successful sales planning for Black Friday 2021**
Maximize your potential on Black Friday
As the event lasts longer each year make sure you’re ready
Black Friday has evolved every year. So, when planning for this year’s peak weeks, it is important to understand and learn from past Black Friday sales trends.
In 2014/2015 and 2015/16 it was in a growth phase, and less impor-tant than Christmas as a driver of demand.
By 2016/17 Black Friday-generated sales volume had overtaken festive sales and that trend has continued every year since.
In 2020, despite the pandemic, the whole event period was a success, even though Black Friday week itself, with a -6% decline year-on year, failed to achieve the previous year’s sales for the first time.
Last year’s peak weeks were impacted by a lack of supply, yet sales increased by 5% year-on-year (week 46 to 48), nevertheless.
Compared to 2019, sales rose by 19% three weeks before the event, and by 15% one week before.
This reconfirms the need to optimally monitor and manage each week of promotion as part of your Black Friday planning.
Once all about bargains and discounts, analysis of Black Friday data from the most recent years has shown the emergence of trading up and ‘premiumization’ as consumers aspired to own better products and prestige brands.
These also marked the beginning of ‘stretching’ the event across multiple weeks, with manufacturers and retailers giving themselves even more time to exploit this massive promotion period.
Today, we talk about Black Friday as “peak weeks”, the most important sales event in the sector’s calendar.
With an event evolving each year in both length and focus – and even more so in 2020 during the pandemic – your challenge is to stay ahead of this Black Friday evolution. The only sure way forward is sales and category planning based on hard facts and expert insight.
Make sure you devise a multi-week promotional schedule with the right products, at the right price, each week. Understand which products to focus on by monitoring last year’s weekly sales. Anticipate 2021 trends and the likely top selling tech products using the latest market dynamics.
Norbert Herzog, Global Strategic Insights Team, GfK
Gear up for e-commerce on overdrive
Consumers converted to online shopping during the pandemic
Online sales share was higher than ever in 2020, reaching 53%, up from
37% in 2019.
This means the year of the COVID-19 pandemic was the first when Black Friday online sales overtook sales made in physical stores. But it is a mistake to believe that “online only” is the way to go. Traditional sales were still happening at a significant scale, especially in the weeks in the run up to Black Friday.
The hybrid channel approach has proven to be very appealing and there are multiple opportunities to maximize these trends in retailing and to connect online and offline marketing and promotions in 2021.
In Europe, trusted traditional retailer’s online shops were the first point of online contact for those forced into e-commerce platforms by COVID-19 lockdowns.
In some weeks, growth rates of those traditional retailers’ online shops exceeded 150% – finishing 2020 with an unprecedented increase of almost 70%.
We may not have been in lockdown last November across Europe – but we were forced to stay at home on and off and hence millions of consumers had shopped online for the first time ever.
Many found it quick, easy, affordable, safe and convenient. And so, they stayed loyal to the online channel and shopped that way during Black Friday.
Norbert Herzog explains the implications of these changes:
Expect more relevance for the online channel and make sure you address the newly grown customer base. Each sales channel is different, and assortment and competition are not alike. This is evident when monitoring our weekly sales tracking data for categories such as Cooling and TVs.
Fewer discounts are acceptable for problem-solving products
In 2020 product shortages became commonplace. In previous peak weeks, retailers competed for shoppers’ share of wallet, and price promotion was intense.
Not so last year, when demand was so significantly increased for IT/office, home appliances and consumer electronics, and supply was so limited, that we saw far fewer price drops.
In Europe especially, consumers appreciated the value that tech products provided for their professional and private lives. Consequently, shoppers often traded-up when cheaper alternatives were not available.
This has been particularly true for categories like notebooks and dishwashers.
As a result, only 33% of products were sold at a discount of 15% or more during Black Friday of 2020 versus 41% in 2019.
It’s key to understand these changing shopping trends when planning your pricing and promotional product portfolio.
Norbert Herzog expects this trend to continue in 2021:
Black Friday this year will once again see high demand and lower supply in the consumer technology and durables categories. This means there will be less pressure on retailers to discount, so they’ll be free to innovate in other ways to attract shoppers.
Work the new product heroes
Will “@home” continue to drive sales success in 2021?
IT posted an outstanding performance in the Black Friday season in 2020 as home-bound customers focused on urgently getting the products they needed to work or study at home – be that notebooks, media tablets, monitors or similar.
Small domestic appliances (SDA) also performed extremely well as eating, cleaning, hygiene, health and wellbeing rose in importance driven by the @home movement.
In terms of specific devices, kitchen machines, food preparation in general, coffee machines and vacuum cleaners all saw strong sales.
And there’s no end in sight here. Norbert Herzog explains:
As the home office is here to stay, and people look set to cook at home much more in the long-term, there are still plenty of opportunities for upgrades and replacements. Manufacturers and retailers should still be focusing on these @home categories for Black Friday 2021.
But there are some risks too. Once people start to focus more on out-of-home entertainment when vaccinations are completed, home entertainment will be less important.
TVs will remain a key category for Black Friday, grabbing shoppers’ attention with attractive prices, but they are not likely to be a sales growth driver this year.
In Europe, TVs are set to decline in the second half of 2021, because the 2020 double-digit growth seen in many markets created a saturation point.
Looking at performance in 2021 to date, the Telecom sector started to stage a comeback in January/February.
This is likely to persist, especially for the second half of the year, with trends such as 5G driving market dynamics.
We expect a smartphone recovery this year. As this category was lower on the priority list in 2020, demand will pick up again as the importance of “out of home and mobile” returns.
Make new shopping experiences a differentiator
Stand out from the competition
With online sales almost matching sales made in stores in the peak weeks, the way brands and products are presented will change.
Now is the time to be planning how to incorporate new formats into your Black Friday promotional activity to avoid being left behind by the competition. This is especially important for those newer converts to online shopping who appreciate demonstrations, ‘how to’ videos, tips and recommendations.
Consumers experienced significant digitization in their homes, in their communication and most important-ly in their purchase journeys in 2020. This is also changing their expectations of their interaction with retailers, particularly when it comes to online retail.
Here customers expect the same or even a better level of consultation as they receive in-store.
New digital tools are being embraced now because the pandemic made us familiar with them. Be it apps, video chats, social media or live streaming events, the opportunity for retailers to create a new level of online experience exists, and Black Friday is a perfect time to make use of these innovations.
Providing an entertaining and informative online purchasing experience can differentiate one player from another in the months and years to come.
For instance, think about offering recipe ideas, trouble-shooting videos, and even Q&A sessions to get the most out of your kitchen machine.
There’s no question it’s already possible to deliver an excellent customer experience when selling online. In GfK’s Consumer Insights Engine in Q4 2020, 52% of online buyers said they would recommend the online retailer, versus only 42% of those who bought in a store recommended the physical retailer.
GfK’s Norbert Herzog says:
Now is the time to be researching new formats for your online shoppers. From educational to social shopping to live events with influencers and celebrities, embrace the online channel to give consumers the experience and information they need, and you’ll be rewarded with stronger sales during all weeks – not just the peak weeks. This can be a true differentiator for your brand or retail format.”
Load the odds in your favor this Black Friday
Win in 2021 with the right channel, products, promotions and experience
Right now, whether you’re a manufacturer, a retailer or a consumer, one thing you can be sure of is that the future is harder to predict than ever. We have highly volatile markets, unprecedented demand shifts, supply chain challenges, intense competition and rapidly changing consumer trends that can be hard to grasp.
Despite these complications, keep in mind the following guidance to steer your strategic thinking around the 2021 end-of-year peak season:
Maximize your potential on Black Friday: Devise a multi-week promotional schedule with the right products, at the right price, each week.
Gear up for-commerce on overdrive: But do not go “online only” as a hybrid channel approach has proven to be most appealing to consumers.
Ease off the price drops: For solution-oriented products, fewer discounts are acceptable, at least in affluent markets.
Work the new product heroes: Pandemic-borne pockets of growth will remain sales drivers in 2021. IT, home appliances and the rise in smartphone demand are on top of the list.
Differentiate via new (online) shopping experiences: Innovate new promotional formats using digital tools, be it live streaming events, video conferencing or social media campaigns.
In this paper, GfK’s experts have used historical and up-to-date weekly data from our GfK Market Intelligence: Sales Tracking to understand what has happened and anticipate what we might expect next. By evaluating the past, understanding the present and closely monitoring the weeks and months to come, GfK’s essential market intelligence can help you make the best business decisions to stay ahead of the market this peak season.
With uncertainty guaranteed, be sure to base your product portfolio management and peak season planning on reliable and up-to-data and expert insight.