Bonus: Christmas 2015 Tips with eSeller: 1: Should you partake in Black Friday?

28th October by Chloë Thomas

Welcome to our series of 3 bonus episodes “Christmas 2015 Tips” presented by Chloe Thomas of eCommerceMasterPlan.com in association with eSeller.net designed to help you make Christmas 2015 the best yet for your eCommerce business.

We’ve created these in partnership with eSeller and for the first time ever on the eCommerce MasterPlan Podcast you can get hold of a FULL transcript (including pictures!) of each of these podcasts.

I’m coming at everything in this 3-part series with in mind that Christmas is a very busy time when you will be wanting to achieve a mix of these 3 objectives:

Attract new customers
Reactivate dormant customers
Make current customers better customers (higher AOVs, more frequent purchases, more purchases!)

The 3 parts are:

Should you partake in Black Friday? [see below]
Why your Delivery Strategy matters this Christmas
Your Christmas 2015 Customer Journey – including the top marketing methods you should be using this Christmas

The full transcript of this podcast is available below.

Click to Tweet: I just listened to “Should you Partake in Black Friday?” – thanks @eComMasterPlan and @eSeller_Net

In this podcast I take you through:

What Black Friday is
What happened last year
The different ways you can get involved this year – and how to work out which is right for you!

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The full transcript “Should you Partake in Black Friday?”:

Introduction:

Hello everyone. I’m Chloe Thomas. I’m the author of the eCommerce MasterPlan, host of this podcast, and I also speak and consult around the world. I’ve been in ecommerce for over 10 years helping all manner of businesses grow and become more successful.

If you’re listening for the first time welcome. It is great to have you here. Please do check out our normal interview podcasts. There’s some really great stuff in them.

If you’re one of our regular listeners, I hope you find this changing content useful. How ever many of my podcasts you’ve listened to I would love to get your feedback. Just send me a message on Twitter at chloe_ecmp.

This is a series of three bonus episodes, The Christmas 2015 Tips, presented by Chloë Thomas, eCommerceMasterPlan.com in association with eSeller.net. We’ve designed them to help you make Christmas 2015 the best yet for your ecommerce business.

This is the first of our Christmas 2015 Tips podcast. This time the topic is “Should you partake in Black Friday?”

What am I going to be running through?

I’m coming at everything in this three-part series, having in mind that Christmas is a very busy time when you will be wanting to achieve a mix of these three objectives in your business: attract new customers, reactivate dormant customers, and make current customers better customers, i.e. to get them to have a higher average order value and AOV, to buy from you more frequently, or just to buy more quite frankly.

In this podcast I’m going to take you through:

• what Black Friday is,
• what happened last year,
• I’m going to outline three different ways in which you can get involved this year and how to work out which is right for you as well.

For my international listeners whilst the examples I’m using are going to be UK specific you can use all these methods in your own country. It just would’ve taken far too much time to repeat each example for the US and Australia, Canada, Spain, Ireland, et cetera, et cetera. There are well over 30 different countries listening to these podcasts, so excuse me for being UK specific, but I think you’re going to get more than enough from this.

What is Black Friday?

It’s an American invention, the Friday after Thanksgiving this year 2015 is going to be Friday 27th of November. There are two reasons for the name. This is according to Wikipedia, so American listeners, please do let me know if I’ve got this wide of the mark. We all know what Wikipedia is like. The first is that in Philadelphia it was used from the 1960s to describe the heavy traffic on the day after Thanksgiving which spread to the wide US in the 1970s.

The second reason according to Wikipedia is that it’s the day when retailers start to make money during the year, i.e. from making a loss throughout January, February, March, April, May, June, July, and October and most of November, finally the year turns to profit, i.e. being in the black.

Since the early 2000s it’s been considered in the USA as the beginning of the Christmas shopping season. In the USA retailers have started opening ever earlier. Many now open at midnight, and a handful actually open on the evening of Thanksgiving itself. The Black Friday event has in the past lasted the whole weekend, although some stores in the USA are now starting to limit it to Friday only in order to increase the impact of the holiday, so scarcity, time balance, et cetera, et cetera. We’ll talk a bit more about that later.

Queuing for days to get the best bargains is common practice in the States and has been banned in some cities due to safety concerns. It makes my mind boggle. It’s big news in the USA and it’s slowly reaching out to the rest of the world. Outside the country of Thanksgiving, the USA, it’s another big day when the combined power and noise generation of the retail ecosystem encourages consumers to purchase. Other days like this would be Cyber Monday which is going to be November the 30th, Manic Monday which is December the 7th, and of course Boxing Day when all the sales go live, unless if you put yourself live on Christmas Day which is now becoming increasingly popular.

All the advice I’m going to be running through from now for the rest of the podcast could be applied to any of these one day events, so Cyber Monday, Manic Monday in particular, and a lot of it can be applied to the Boxing Day on with sales.

What happened last year?

What happened in the UK last year that makes this such a persistent topic to kick off our Christmas 2015 Tips podcast series? In the UK most retailers were caught totally by surprise last year. Even those who’d planned and planned very well had the server issues, delivery issues, all of a sudden the UK consumer went Black Friday crazy. This was part of the reason for the delivery nightmares that we’re going to be discussing in next week’s episode, so do take a listen once it’s live for tips on how to increase conversion rate, recruit new customers, and retain your existing customers by using delivery.

But back to Black Friday. Black Friday promotions have been run in the UK since the early 2000s but were fairly small and contained affairs. In 2014 it all went a bit crazy, customer fights and stampedes made it the top news story of the day across the country. The sales flooded in too. A few stats for you. In 2014 in the UK November the 28th, which was Black Friday, saw approximately £810 million spend online. That’s about $1600 million.

Cyber Monday to give you some comparison and Manic Monday combined were a further £1.2 billion. That takes us somewhere across the two of them across the three days as being a £2 billion, but that’s across just three days within the space of less than two weeks. In terms of American money that would be around about $4 billion. According to Google last year, Google UK I should say last year, last year was the first time in seven years that Boxing Day wasn’t the biggest retail day of the year. It was Black Friday.

Whether to do or how to do Black Friday is now a big question for UK retailers and retailers worldwide. Before I run through the various options you can follow let’s look at Prime Day 2015 just in case you need any more convincing of the power of a one day event. On July the 15th this year Amazon did their own personal version of a one day global sales event, inventing Prime Day to celebrate 20 years of being in business.

According to ChannelAdvisor, and ChannelAdvisor for those who don’t know is a software system that you can use to list your products on many, many marketplaces much more easily than doing the whole thing manually. They have fantastic integrations and they are well worth checking out if you’re working on the eBay, Amazon, and other platforms. They also, which is why I’m mentioning them here, provide some really good stats. They’re very generous with their information and their conference is particularly good too.

According to ChannelAdvisor European sales for Amazon were up 53% year on year on Prime Day and they adjusted that for day of week. In the USA where Prime is more greatly adopted they were 93% up year on year. For Amazon it was their biggest ever ever day of trading, so stronger than Black Friday 2014.

Now what does this tell us? It tells us two things:

• One, consumers love a dedicated deal day and they love it all over the world.
• Two, it tells us that Black Friday is definitely going to be bigger this year all over the world, because if Amazon’s biggest ever day was Prime Day then you can be certain that Black Friday 2015 is going to be a lot bigger than Black Friday 2014.

Hopefully you’re now convinced of the power of the one day sales event and that potentially you should be considering Black Friday if you’re not already.

How involved should you get?

Well given the numbers involved I think you have to do something, but how much you do depends on how much benefit you’re going to see from it and how much effort is that worth. Is the likely uplift? If you sold twice as much as you normally would on that specific day how much effort is that worth to you? If normally you sell five units a day and you get to sell 10, that’s not worth a great deal of effort. However, if you usually sell 1,000 orders a day and it’s going to potentially double to 2,000 orders a day then it’s worth putting in a bit more effort and making it a bit more of a stronger campaign.

Number one though was how much benefit will you see from it and how much effort is that worth. Two, how much does Black Friday fit with your customers and products? This one’s quite hard to gauge but I’m going to give you an example shortly on that one. Three, how much capacity do you have? Can you cope with a doubling of orders in the warehouse? Do you have enough product to sell if you were to go all out for Black Friday? If you’re a relatively large retailer and you’ve not bought for it, then you’re going to have problems with stock availability if you go all out. Does your marketing team, have they got the capacity to run this? This is a busy time of year. We’re already in October. It’s only a few weeks away. How much can you turn around right now reasonably in order to do it well?

Looking at the big boys, Currys is a huge electronics retailer in the UK. They already have their Black Friday 2015 page live or they did even at the beginning of October. It’s heavily SEO-ed and it’s asking you to register your interest so they’re collecting email addresses off it as well. But they’ve been doing Black Friday for over 10 years and have exactly the right sort of product that Black Friday customers go for, electronics. You don’t necessarily need to be that ahead of the game.

At the eDelivery Conference in London earlier this month which is instantly run by Internet Retailing, the sister publication of eSeller who we’re producing these podcasts with, we learned how Shop Direct prepared for Black Friday. Shop Direct run two huge online only businesses, very.co.uk, that’s V-E-R-Y, and littlewoods.co.uk which sell fashion and home goods and furniture. We learned a lot about how they’re handling Black Friday. Commercially they love it and their customer loves it.

Last year they were really well planned but still they had more demand than they thought they were going to and struggled a little bit to cope with it from what they were saying. This year it is a huge, huge focus, and they’re anticipating it’s going to be considerably larger than last year. They’ve even kind of put some fudge fact into those numbers and they’re currently desperately hoping it’s not going to go above the fudge facts and cause some issues again.

For the first time at Shop Direct, they’re running this as a cross team collaboration, so members from every team in the business from merchandising, buying, finance, IT, website, marketing, et cetera, they are all involved in one project team. The planning of that project started three months ago, so over four months before the event itself, before Black Friday itself. It is a totally unique project. It’s a separate standalone project which has its own project managers and so on and so forth.

And get this, for the week before and during the event itself they will be running a war room. That was their words, war room, where they take a conference room in the middle of the office and the key players are in that room making sure that everything is working exactly as it should and the customer experience is as good as it should be. That war room we certainly got, they didn’t say 24/7 but the impression was very much that those people manning that war room round the clock during the event itself.

That is one huge amount of effort to be putting in but for them it’s going to pay off. Their turnover is £800 million a year. That’s $1.6 billion a year. For them going to that level of effort makes a huge amount of sense.

The question though is how you should do it?

How much effort should you be putting in?

Now remember our aim with Christmas is to:

• attract new customers,
• reactivate dormant customers,
• make current customers better customers by getting them to spend more and more frequently.

Now all of those can be assisted by Black Friday.

To give you an example of someone who won’t be getting involved in Black Friday as I promised earlier myartgallery.ie who we interviewed on the podcast just a couple of weeks ago (click here to listen) do custom paintings and artworks for people.

They are not going to be doing any offer at all for Black Friday because by the time Black Friday comes around their last order date for Christmas will have already passed, because the paintings have to be painted and approved and delivered, and they can’t turn that round in under a month in large numbers if they have to do it for Christmas. They’re not going to be involved. That’s a really good example of a company who should be avoiding it.

Luckily for all of you there’s no right or wrong way to do Black Friday.

You need to find out and work out for your business how all in or not all in you want to go. While still thinking about that I’m going to run through three ways in which you could or three levels of activity you can undertake shortly. But just remember, the key customer motivation we’re tickling for this one day event: scarcity and time pressure. That’s the lessons we took from when I was running through the States earlier. The companies in the States expand and expand and expand at Black Friday to take ever longer and cover ever more days. They’re now contracting it to make more of time pressure and the scarcity elements. There’s ring fence stock for big Black Friday offers. The full stock code is not available at these crazy low prices.

Then you’ve got the time pressure. It is for one day only for some companies. Some run it over more days. But you want to get that scarcity and time pressure. These are big customer motivations we’re aiming at. Plus, it’s a full-on media event. Customers will be hearing a lot about it during the day and quite possibly in the lead up. It becomes part of their environment, part of the conversation during that day which, will affect customers’ mindset. You may see a drop off in sales on that day if you’re not following the crowd and joining in in at least a superficial way.

This is why back this customer mindset piece and having to follow the crowd is why back when I did some work with the High Street retailer Alexon and then Harvey we would look at when Debenhams, which is a big UK department store, were intending on running their 20% off weekends, because we knew that if we didn’t copy them we would be losing money. But also remember the aim of any promotion is to get the customer to do what we want them to do as cheaply as possible.

What you don’t want to do is just go all out on it because everyone else is. You’ve got to make sure that these promotions are working for you and working for your business, that they are attracting new customers, reactivating dormant customers, and making current customers better customers. So spend more and buy more frequently, that’s what we’re aiming to do. Think about how much you’re willing to spend to get them to do that.

Here we go then.

The different ways you can get involved this year.

In 2015 I think almost every ecommerce site should tip its cap to Black Friday.

For those who are partaking there’s three options. I’m going to run through them:

Option A is the simplest option.

It is to superficially be part of it, to look like you’re playing the game with putting in as little effort as possible, so you take advantage of all of those, all of that noise that’s going on in the media. It’s a bit of an insurance policy play and it’s perfect for smaller businesses. If you’re only taking 10s of orders a day or less this is definitely a strategy you should be considering very strongly or an option that you should be considering very strongly.

Basically what you want to put in place is a simple offer, one that’s easy for you to implement and doesn’t cost you too much. A free P and P day, a 10% off everything day, maybe a free gift with every order, something really, really simple, or one product that you want to reduce in price massively. Then just do the minimum of marketing around it, update your homepage, send out an email to your customers about it, and do a few social media posts. Option A is the really simple one, to be superficially part of it all.

Option B then is to really embrace it for your business.

If it fits with you you’re selling electricals, fast fashion, elements which a lot of people are getting behind in the world of Black Friday and the deals people get excited about and your competitors are all doing it, and if you believe the uplift is worth putting some effort in for then select some key products to heavily discount on the day. I do not want to see any of you doing a 50% off everything because then you’re paying the customer to do stuff you don’t want to them to do.

We need to select, to be clever with these promotions. Select key products to heavily discount on the day. It might be brand new season items that you want to get some throughput on. It might be sale items you’re going to reduce further and promote, visually promote in a different way. It might be some dross, really terrible stuff you’ve got lurking around in the warehouse that you’ve been willing to get rid of for a while and which just isn’t shifting. On Prime Day Amazon was selling granny knickers amongst other things so there’s no shame in clearing some crap out of the warehouse at the same time.

Please don’t discount your bestsellers on the day. Yes, they will see a massive uplift but you’re just giving away margin. Why not be creative? You might choose to do an individual category. Maybe it’s all your mugs for example, or baubles, or pens or something, or maybe you’re going to create some kind of special offer bundle of products. Just remember that the aim of this promotion is to get the customer to do what we want them to do as cheaply as possible, so that’s new customers, reactivate old customers, and make our regular customers spend that little bit more.

Consider when you’re putting the marketing together whether you are aiming to recruit new customers with this or that it’s a retention reactivation play. That would determine where you’re putting those messages out. Have a mailing plan for several emails across the day and beforehand to pre-alert people that it’s coming up. Then have a bit of a social media campaign, get active with that, maybe run some mini competitions on your Facebook page as the day runs on.

Consider doing some social media advertising. Potentially, and we’re going to talk more about this in the third bonus podcast in this Christmas 2015 Tip series, but you may want to consider doing some remarketing on Facebook and you’re also probably going to want to do a separate pay per click campaign maybe with a display piece to it using your remarketing list as well.

On the system side be ready for out of stocks. If this product ships quickly you need to very, very quickly make sure that there’s a clear and positive Black Friday stock has run out message on the site so that people know they’re not going to be able to order it anymore. Make sure that communication is working. You may also want to ring fence a certain amount of stock to include in the discount but not all of your stock.

We talked about this a little bit earlier, which may well mean creating a separate skew code in order to make that work on your system. Because of course if you’re using this to try and attract new customers in and you reckon you shipped 100 units, you’ve only got 150 in stock, the 50 would see you through to Christmas. You don’t want to miss out on those full price sales because your Black Friday campaign goes too fast. Or maybe you do. It’s a decision you have to work out in your business.

Also how can you speed up the warehouse, make it easy for them? Maybe you prepacked some of the offer items so they’re literally label and go? It’s an idea which could work for you if you’re looking a bit quiet in the run up because it is going to cause issues in the warehouse as well as on the website with such an increasing demand.

That was our option B, embracing it in your business.

Option C. I don’t think many of you are going to want to go down this route. This is to go all out, the no stone unturned option.

It’s really the big business route. We talked about what Shop Direct are doing, about the Very and Littlewoods company. It’s essentially what they’re doing.

It’s a lot of effort so you need a massive return. This is area such as building a new version of your website on your domain.blackfriday or such. Like Currys create your Black Friday page now and start gathering signs up. Newspaper and magazine adverts on the day. TV and radio adverts on the day. Massive product repricing. Special delivery boxes that say Black Friday goods. Big logistics planning process with your couriers as well as the warehouse team and call center.

I don’t think many people listening to this podcast are going to be going to option C. Yes, there’s a fair amount of room that option B could take up. But at least this gives you an idea to start working out how you’re going to start clarifying what you’re going to do, what’s the aim, and how all out are you going to go?

Whichever option you pick I have a little Black Friday checklist for you which is:

to pick the deals carefully. Remember the point of the promotion is to get the customer to do what you want them to do as cheaply as possible. Be really clear on what actions you are trying to drive.
Make sure your team are ready, customer service is, website team, hosting, marketing, warehouse. Does everybody just know it’s coming up? Do they know what you’re doing, what you’re expecting to happen?
Thirdly, do you need to turn off next day delivery for Black Friday? A lot of business last year caught a cold by leaving the next day delivery on and they just couldn’t clear the orders through the warehouse fast enough to deliver on time. So consider turning next day delivery off on Black Friday.
Fourthly, fact in the likely sales uplift into you parcels forecasting. We’re going to talk more about this in the next podcast, in this little series, about delivery of forecast and working with your couriers, but you need to make you’ve covered this off in the information you’re giving your delivery partners.

I’m ending each of these Christmas 2015 Tips podcasts with your little to do list.

Your Black Friday to do list

decide what level of engagement with Black Friday you’re doing.
Plan every aspect, marketing, workloads, offers, parcels et cetera.
Plan the potential reaction to a crisis. What if it goes wrong for you like it did for so many last year, delivery delays, packaging delays, out of stocks, site going down? Are you ready to handle that?
Should you also do something for Cyber Money and Manic Money and Boxing Day? Maybe you do it once on Black Friday and repeat on Cyber Monday and Manic Monday the same plan, obviously with different graphics because the name changes(!)

That’s your checklist and my guide to should you partake in Black Friday.

This was the first in our series of three bonus episodes Christmas 2015 Tips presented by me Chloë Thomas of eCommerceMasterPlan.com in association with eSeller.net aiming to help you make Christmas 2015 the best yet for your ecommerce business.

Thank you for listening and make sure you listen to the next in the series, Why Your Delivery Strategy Matters This Christmas

Cheers, bye, and keep optimizing.