Black Friday falls on November 29th this year. With the renowned shopping holiday just four days away, we’re looking back on Black Fridays past — drawing predictions and analyzing the bigger story behind this annual gold mine for retailers.
Black Friday in Review
The term “Black Friday” first appeared in 1869, the day of an epic stock market crash in the US. Clearly, the term has done a 180, now signifying the opposite of economic collapse as consumers gear up for some of their biggest purchases of the year.
The day following Thanksgiving has been associated with shopping since the 1930s, when advertisements in the Macy’s Thanksgiving Day Parade enticed growing crowds of onlookers on the streets of New York City. Fast forward to today, and Black Friday is now an internationally observed day of spending.
Black Friday 2018: From In-Store to Online
Black Friday has gotten a makeover in the information age as retailers notice shifting consumer trends and try to keep up. Unsurprisingly, the most notable of these trends is the popularity of online shopping and how fast it’s growing.
Research shows that in-store Black Friday traffic has been declining since 2016. But thanks to ecommerce, that doesn’t mean dwindling profits for retailers.
Black Friday 2018 raked in “6.2 billion in online sales, a growth of 23.6 percent year over year.” And the kicker: Cyber Monday yielded $7 billion worth of merchandise sold “making it the largest online shopping day of all time in the U.S.”
One source showed that smartphone sales reached an all-time high of $2 billion, and more shoppers chose to buy online and pick up in-store than in previous years. source
Of course, many shoppers want to avoid the chaos, crowds, and long lines to shop deals from the comfort of their home – but how exactly are they shopping online?
“On Cyber Monday 2018, direct website traffic ranked highest for driving revenue at 25.3 percent share of sales, followed by paid search at 25.1 percent, natural search at 18.8 percent, and email at 24.2 percent. Similar to past years, social media continued to have minimal impact on online sales at a 1.1 percent share.”
Large retailers, on average, had more success with smartphone sales, while small retailers offering more specific items did better with desktop sales.
All of this data brings us to the fundamental question: Is Cyber Monday slowly phasing out Black Friday? Aside from Cyber Monday, we’re seeing other trends that draw focus away from shopping on Black Friday itself.
Black Friday 2019: What’s in Store
In the past, not waking up early to brave the crowds meant missing out on deals. But ecommerce has changed the game, providing easier ways to buy.
Some suspect that 2019 may be the first year Cyber Monday deals overshadow Black Friday deals.
The likelihood of trend continuing is high, considering how web shoppers aren’t really missing out on anything. Historically, it’s been shown that most supposed in-store only deals are actually online too. source
Along with Cyber Monday, Small Business Saturday has also gained significant traction in recent years to encourage consumers to not forget about small businesses. In addition, big brands like Best Buy and Walmart have already started announcing deals the week before Black Friday. The Kohl’s online Black Friday sale is already underway as of today (November 25th).
With all of this hype leading up to Black Friday and after it, the holiday is quickly extending into a full week.
“As stores moved their Black Friday Sales on Thanksgiving Day, they faced a backlash. To avoid the backlash, more and more stores are moving their sale online on Thanksgiving Day by still keeping their physical stores closed. As a result, Thanksgiving Day is emerging as one of the main days for online shopping. The Wednesday or more specifically Thanksgiving Eve has also emerged as another time when several stores start their Black Friday Sale.” source
This brings us to another fundamental question: will Black Friday eventually expand into a month-long series of deals and discounts?
Both consumers and businesses are reverberating this pattern as more shoppers report starting their holiday shopping in October. It’s also not uncommon for retailers to start advertising their Black Friday week deals in October.
Data Drives Retail Decisions
Data allows businesses of any size to take maximum advantage and forecast the best Black Friday results. There are several ways retailers are already doing this.
For big brands, using the prior year’s Black Friday data to prepare and make predictions for this year is standard practice. With more in-depth analysis, businesses can also identify the most in-demand products so they know what deals to offer. Tracking revenue also helps businesses aim higher each year and know what decisions helped them achieve that lift.
Machine learning helps brands predict how much a customer will spend using deep neural networks. These networks take unstructured data sets and comb through layers of information. Just as Netflix offers recommendations based on a customer’s unique views, businesses can offer specific products to customers who are most likely to want them. By experimenting with different models, data scientists can extract precise information that gives brands the best chance of success – and on a holiday like Black Friday, that can have a major impact on revenue.
Black Friday Prep for Small Businesses
If you’re offering Black Friday deals, there’s lots to do in preparation for the big day. Checking inventory, making sure your site can handle the extra traffic, selecting items to discount, beginning email marketing campaigns, optimizing for mobile buyers, and, of course, tracking your performance.
Studies show that retargeted ads are hugely impactful for Black Friday sales. “Apps running retargeting enjoy a significant revenue uplift on Black Friday compared to those that don’t. The gap was most pronounced in the US, with a staggering 14 times difference.” source
Whether you’re a Black Friday fan or not, it’s useful to observe the digital trends that have transformed the holiday over the years. It’s these same trends that are influencing small business sales both on and offline.