Opinion: The new Black Friday starts now
In the retail world, the day after Thanksgiving earned the foreboding moniker “Black Friday” because it was allegedly the first day that retailers did enough business to get “out of the red” in the apocryphal ledger book and start making a profit. This idea was never entirely accurate, but it did reflect an underlying reality: Retailers are heavily dependent on holiday sales for survival.
The modern retail economy is one of those marvels of mankind that works better in practice than in theory. Every holiday season, retailers consider an extraordinary number of factors in order to arrive at the right business decisions guiding how much they think they can sell, at what price and in what channel.
This is possible because retailers are notoriously good at planning. In a normal year, they have placed their orders for holiday goods in spring, built promotional calendars for each week and printed newspaper circulars weeks in advance of their drop dates. Their Black Friday sales are planned down to the hour and Cyber Monday volume down to the minute.
But this is not a normal year.
This year, retailers’ efforts to adjust to the current reality wrought by COVID-19 have been superhuman. They have worked tirelessly to keep stores open and shelves stocked. Merchants have adjusted their inventories. Store operations have overhauled their floor plans to account for social-distancing requirements. And most have dramatically increased their e-commerce operations to meet surging consumer demand.
And now, as the 2020 Holiday season fast approaches, retailers have a whole new set of second-wave considerations to keep in mind.
Address ‘fear of going out’
The first consideration retailers must address this holiday is FOGO, or “fear of going out.” As winter approaches, we are likely to see a new and larger wave of COVID-19 cases in the United States that will renew consumers’ apprehension about viral exposure. This Black Friday, and its follow-on peak shopping days, things like doorbusters, long lines of people camping out, lining up at a store entrance and making a mad dash for a deal will all be a thing of the past for retailers.
In order to reduce the stress of the shopping and fulfillment experiences, retailers will have to improve both their fulfillment capabilities and their messaging.
Improving capabilities means meeting customers where they are. So far, most traditional retailers have expanded their e-commerce business and operations. For those that haven’t and for those where e-commerce (even when expanded) cannot make up for store sales, there is still time to set up curbside pickup and BOPUS (Buy Online Pick Up in Store). Retailers that reframe their stores as forward-deployed distribution centers can provide their customers with more choices to reduce viral exposure, while still driving the inventory and sales throughout these fixed store assets.
Improve your messaging
The second way retailers can address FOGO is by improving their messaging. Retailers can ease the stress the public feels about shopping in person by communicating local store information clearly, accurately and in as close to real-time as they can. This will help customers avoid wasted trips and prepare them for in-store experiences that include temperature scans or mask enforcement. By communicating in clear and simple language, customers will know where to pick up each of their fulfillment choices and what happens when they get there. This is particularly important for retailers with low trip frequencies in a normal year, including specialty and holiday retailers.
Mind your timing
This year, social distancing has made things like Black Friday doorbusters or short-duration weekend-only promotions untenable. It might be more prudent to invest in long-duration promotions with lower depth-of-discount, including the traditionally less-trafficked weekdays. Some retailers are even taking a page from restaurants and offering in-store Tuesday Specials.
Good timing will also matter this year for getting shipping right. To avoid holiday surcharges, and ensure that all packages meet Christmas-delivery deadlines, retailers might consider pulling demand forward. Traditionally, carriers have stuck to the ship-by dates they initially announce, but this year those dates may fluctuate. For omnichannel retailers, earlier last dates to ship will impact e-commerce business across the industry, but they also provide an opening for store sales and share gains from e-commerce pure plays, particularly if the retailer has BOPUS.
The final consideration is to keep things flexible. It is going to be a challenge to commit product and pricing to long-lead media. Part of this is the availability of inventory: Some things that used to take days to distribute from port to store now take weeks. And deep discounts on products in short supply could mean leaving real money on the table. Short-lead media is more flexible and reduces these risks. One of the hidden secrets of marketing is its ability to not just drive demand, but to shape the demand envelope. A well-planned marketing strategy can not only encourage people to make purchases, it can influence where, when and how those purchases are made. If shelves are going to remain stocked this winter as the next wave of COVID hits, “Black Friday” has to start now.