Xmas peak trading 2016: 6 unanswered questions for retailers to consider

Andy Mulcahy, editor, IMRG

We’re into November – traditionally the time of year when online retail order volumes start their gradual ascent as we approach the peak shopping period over late November / early December.

Black Friday has disrupted that trend, having become very strongly embedded in the shopper mindset in 2014. The Xmas shopping peak is no longer a gradual build-up and easing-off in sales volumes, but a far more compressed experience. In 2014 the peak lasted for a weekend, in 2015 it extended over a longer period of up to a week (the ‘Black Friday period’) – although there is no consensus on when campaigns should start or end.

The one constant about Black Friday is that it has a remarkable capacity to evolve and shift sharply from one year to the next. This is because it has no cultural significance in the UK – it’s linked to Thanksgiving in the US – so it can be stretched or compressed, moved around and adapted. It inherits its characteristics from nothing concrete.

Black Friday 2014 altered the shape of the Xmas peak – but it still doesn’t quite feel settled into a reliable new pattern. 

Here are six outstanding questions that may be determining for how the Xmas peak period evolves again in 2016.

1) How long will it be?

Some event days are just days and go on for a day – Xmas Day, Easter Sunday etc. This is because they celebrate a day of significance, usually tied into religious tradition. With Black Friday, no such ‘anchoring’ is possible due to it having no cultural significance in the UK – hence it can be labelled the ‘Black Friday period’ and last for an undefined and extended timeframe, despite technically being just a day.

Since the arrival proper of Black Friday in 2014, the Xmas peak shopping period has been compressed then spread out a bit again – but where does it end, what will the timeframe be in 2016?

Retailers are generally pretty tight-lipped on their Black Friday campaign plans – it’s not in their interests to tell competitors when they plan to launch – but anecdotally we are hearing a bit of a mix. Some are planning on longer campaigns this year (up to a month), some just a few days, others repeating what they did last year. 

With such a concentration of spend focused on a short timeframe now, clearly retailers would want to be able to steal a march on their competitors and secure a share of spend in advance of that period. There have already been frustrations aired this year about ‘Xmas starting earlier and earlier’ – with aisles stocked with Xmas wares in October and festive adverts scheduled for early November – but there are two sides to this; retailers and shoppers.

On the one hand, retailers often report that search volumes for Xmas start to rise in September or even earlier, so they are starting to think about it early – but when are they ready to buy? If they anticipate that there is a heavy discount period coming, they will of course consider delaying until the discounts are activated, but if retailers try to pull this too far into early November marketing activity may be wasted if people on the whole are not ready to start Xmas shopping then.

It’s an interesting balance to find.

2) Is Black Friday a multichannel exception?

Notwithstanding the fact that Black Friday has become the ‘Black Friday period’, it will likely still be the day itself that sees the highest levels of activity.

Again here, we have seen quite a swing in terms of how shoppers behave across the channels. In 2014 people queued outside shops in the early hours and trouble broke out in a few stores, which was well photographed and shared widely. Consequently, in 2015 the shops were empty on Black Friday morning as people shopped online (in safety) instead.

So what happens in 2016? Should shops avoid opening early and laying on extra staff, as it’s inefficient to do so with no footfall? Or will people return to the shops this year, encouraged by the images of empty aisles last year where they feel they could go without fear of scuffles breaking out again? 

Or is Black Friday a multichannel exception – where people just shop online rather than moving between channels as best fits their requirements?

3) Will other verticals get involved again?

In 2015, Black Friday stopped just being a retail event – with campaigns launched from companies in the communications, travel (car / flight), event ticketing, publishing and leisure sectors to name a few. 

This is potentially an issue for retailers, for whom having a strong Xmas trading period is more important than some other sectors. It’s possible that shopper spend (there is only so much of it, after all) may end up getting diverted to these other areas away from retail – it’s also possible that more marketing noise on the same topic may imbue a sense of fatigue in people, stunting the effectiveness of retailers’ marketing campaigns.

It does seem unlikely that the Black Friday noise will quieten down much yet.

4) Can fast delivery be sustained over peak?

In August this year, the percentage of orders using ‘next day’ as the fulfilment option was higher than those using ‘economy’ for the first time. 

This is probably a direct response to ‘next day’ delivery being widely promoted by some retailers, often for free if the basket value goes over a certain threshold. 

Obviously these retailers wouldn’t make this promise to the customer if they couldn’t fulfil it, but peak offers a different scale of challenge. The interesting thing about Black Friday is that it has pulled a bulk of sales volumes further away from the Xmas cut-off point, so speed of delivery isn’t necessarily of the essence for shoppers to be able to get their goods in time. 

Be that as it may, we may see far more proactive promotion of ‘next day’ this year throughout the Black Friday peak, as it has become a key part of the customer proposition for many. During ‘normal’ operations this may be possible to fulfil, but it’s possible that this could put a lot of pressure on the carrier network to deliver huge volumes of orders at a very quick turnaround. 

Many retailers use the same networks after all.

5) Will we see a shift in peak days?

The Xmas peak days used to be naturally-occurring phenomena – Cyber Monday and Mega Monday being the last Monday in November and first in December. They may have been given marketing names in the UK, but marketing agencies didn’t invent them; there were other factors at play already – they happened to coincide with the final payday before Xmas, Mondays were traditionally the biggest shopping days of the week online etc. They were happening anyway without need of marketing interference.

We are now in a new era of mass discounting sales events, which aren’t naturally-occurring but purposefully created. Black Friday is one example, Amazon Prime Day another. These are now well-established, but what tends to happen is that days around those major peaks also see a sales uplift as shoppers are primed to spend and marketing agencies look to label (and claim) them.

As Black Friday has become a period now, with campaigns running over an extended period, some retailers reported seeing a huge upturn in sales on the Wednesday and Thursday preceding it in 2015.

Will we see marketing agencies attempt to label and claim some of these days, turning the whole period into something resembling a paint chart – Tangerine Tuesday and Cyan Saturday, anyone? 

6) Will the anti-Black Friday sentiment grow or recede?

There’s no getting away from it, some people detest Black Friday. This sentiment was largely generated by the images of trouble in stores in 2014, and it is so strong that people have tried to establish alternative events to Black Friday.

These quite often focus on the fact that Black Friday represents a fairly frenzied brand of consumerism – alternatives include ‘Giving Tuesday’ (1 December), which is about getting involved in charitable works. A top trend on Twitter on Black Friday in 2015 was also the hashtag #optoutside – which was started by the US retailer REI and encouraged people to undertake outdoor activities instead.

So there has been a direct response to it, but in 2015 there was no repeat of the in-store troubles of 2014. With Black Friday extending into a period and shifting over to digital in nature, it may be coming to feel a bit more like a standard campaign and the anti-event sentiment may recede as a consequence.

But – as with all these points, we shall have to see what actually happens.

Have you read our guide – Planning for Peak 2016, supported by Salmon?

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