While year-end festivities begin in December, November is arguably peak sales period for retailers – with big dates like Black Friday and Cyber Monday to take advantage of.
However, with economic conditions suffering record troughs, consumers will be looking to cut back and save where they can. This will mean reduced spending in general, but it also means buyers will be on the hunt for deals – increasing appetites for Black Friday purchases.
So how can retailers work to meet the needs of UK shoppers this year – and what are some important factors to consider in the run-up to Black Friday and Cyber Monday? In this article, we’ll examine some expert insights, as well as practical tips for success.
More UK consumers will shop this year – but will spend less
According to Embryo, UK spending during this period has increased by as much as 25% year on year, with shoppers spending £4.8 billion in 2021. Of course, the cost of living crisis will impact this figure, which is predicted to drop to just £3.95 billion in 2022.
But it’s not all gloom and doom. While the average spend is predicted to drop, the number of consumers planning to bag a Black Friday bargain in 2022 has actually risen by 6%.
Megan Thomas is an Associate Digital Strategist at Brandwidth – a global innovation agency that counts Disney and Microsoft among its clients. She confirms that consumers are likely to spend more on Black Friday deals this year. ‘But how much of that will be down to savvy saving measures,’ She states, ‘and how much can be attributed to the fact that the deals are starting even earlier this year is yet to be seen.’
Al Gerrie is CEO of eCommerce returns management firm ZigZag Global. ‘With the cost-of-living crisis and rising inflation hitting consumers’ wallets hard,’ He agrees, ‘I would expect overall sales to be down this Black Friday, with all the data pointing to lower discretionary spending than usual. It’s much more likely that price-savvy shoppers will use Black Friday deals to save money on Christmas presents for friends and family, rather than buying for themselves.’
Retailers should start sales earlier – and make them last for longer
According to data insights firm Finder, Google searches around Black Friday began 12 weeks before the actual date in 2021. This is up from 2014, when we saw online searches for Black Friday start just 7 weeks in advance.
‘Black Friday as a peak sales period is most definitely here to stay,’ Says Al, ‘though it has evolved in recent years from a 24-48 hour sales period at the end of November, to almost a month-long sale. This is to quench the thirst for promotions amongst consumers and remain competitive amongst retailers as more and more offer this long discount period.’
If you haven’t already started advertising your Black Friday deals, make sure you get the word out as soon as possible – especially via your digital platforms.
Boost your in-store and eCommerce UX to win conversions
Mark Elward is Vice President of Enterprise Sales at leading eCommerce fulfillment provider Huboo. He says the downward trend in consumer spending will only become more pronounced as winter progresses.
‘This will leave eCommerce retailers potentially facing reduced sales paired with increased operating costs.’ Mark explains, ‘Retailers can take steps to ease these issues if they make a concerted effort to put their customers first during this time of intense financial stress and pressure.’
Pricing is only one aspect of a customer journey that converts. ‘For me,’ says Al, ‘the retailers that will come out on top this Black Friday will be those offering more flexible return options, such as ‘refund to gift card’ and ‘live exchanges’ to help save the sale, and convenience to give customers choice.’
Collection from home and more varied drop-off points, such as 24-hour supermarkets or lockers, are providing unprecedented advantages for consumers, Al points out. ‘Retailers with a smooth, easy and flexible returns process will win the day, not just for consumers, but also in terms of getting their stock back quickly and efficiently.’
Flexibility and convenience go hand in hand with a great UX, agrees Megan. ‘To get consumers to spend money on petrol or public transport to travel to the shops, brands need to consider the customer experience. If they can buy the same thing, for the same price, on Cyber Monday from the comfort of their sofa, there needs to be a hook to get them into the shop – otherwise, Cyber Monday may become the big spending day of the 2022 Black Friday weekend.’
Having said that, customer experience shouldn’t be confined to brick and mortar. ‘eCommerce sites will need to be on top of their game to ensure that customers part with their money.’ She acknowledges, ‘A recession makes us more decerning on where we spend our cash, and a lagging website or bad UX could indicate a sub-par product, and one not worth paying the even discounted price.’
Be smart with supply chains to ease price points
Lower prices are part and parcel of Black Friday. But with the cost of procuring goods rising, how can retailers minimise the impact this will have on their prices – while still turning a necessary profit?
Mark says one way of doing this is by reconsidering fulfilment options. ‘For the independent retailer with full responsibility for their picking, packing and delivery,’ He states, ‘the average cost of fulfilling a single order in the UK is £3. When you consider that this overhead increases with cross-border trade, it’s easy to see how fulfilment can erode an online retailer’s profit margins.
‘eCommerce businesses should look towards tech-enabled fulfilment experts to not only reduce these financial costs, but also free themselves from the time-consuming activities that come with ensuring fulfilment is undertaken quickly and accurately.’
Other measures retailers can take is to diversify their sales channels, reassess product lines and review pricing structures, Mark advises. ‘Doing so will ease challenging times ahead, and allow retailers to stabilise their operations before the cost of living crisis truly impacts the bottom line – while ensuring customers are treated to a fair purchasing journey where they don’t feel like they’re getting ripped off.’
Making the most of post-sales returns is another key way to maximise Black Friday gains.
‘With consumer priorities focusing on value for money and getting ‘the perfect gift’,’ Says Al, ‘there’s likely to be an influx of returns post-Black Friday. Considering the issues retailers face this peak season, they are expected to be lighter on stock as they carry less due to cash flow and supply chain issues. So, it’s imperative that retailers can get items back into the supply chain as early as possible in order to re-sell them before Christmas and prevent a build-up of stock that cannot be sold.
Offering more ways to pay at checkout will boost conversion rates
A July 2022 report found that more than 17 million UK consumers have used BNPL services. The same report showed new customer acquisition improved for 59% of retailers who offered POS finance and just under half (43%) said customers were making more frequent purchases as a result.
The good news is that interest free credit solutions can help retailers offer customers more ways to spread the cost. With point of sale finance options such as DivideBuy’s interest free credit product, customers can choose to pay for a product over 3-12 months. When used correctly, our retailers have seen conversion rate increases of up to 70%.
Point of sale finance is an excellent way for retailers to boost Black Friday sales, without impacting profit margins. Of course, choosing the right credit provider is important. You need a lender who complies with FCA guidelines, is ethical and flexible, and can offer customers a first-class user journey.
To find out more about how DivideBuy is helping hundreds of UK retailers to boost conversions, book a fifteen minute demo now.