Big discounts have always been the appeal for Black Friday and Cyber Monday shoppers, but that trend seems to be losing momentum, so retailers need a new game plan. Winter holiday spending in the U.S. was flat from 2020 to 2021, with an average per-consumer spend of just over $997 per person in both years, according to the National Retail Federation. Adobe found that online Black Friday revenue decreased slightly from 2020 to 2021, although spending increased by 15% year over year for Cyber Monday, indicating that Black Friday may not be the must-shop day it was before the pandemic.
Many analysts say the 2021 numbers are a result of people spreading out their holiday gift buying across a longer season, starting in October, September, or even earlier. The result is that consumers aren’t holding off on gift purchases until the day after Thanksgiving. Retailers who’ve always counted on Black Friday in particular and the Cyber Five (Thanksgiving through Cyber Monday) in general to push them into profitability for the year need to develop new strategies based on data.
Expand your holiday promotions calendar
For more than 10% of U.S. consumers, the holiday shopping season is already well underway because they started working through their lists before September began. While holiday shopping seasons spread from October through December in 2020 and 2021 because of supply chain issues, this year the early birds are motivated by household budget concerns, inflation worries, and fears of a possible recession.
They’re looking for deals early, and they’re not alone. Half of U.S. shoppers plan to start their shopping before Halloween this year. Rather than go back to the pre-pandemic model of saving the biggest discounts for Thanksgiving weekend, retailers need to stick to the more recent playbook of earlier holiday promotions.
Use data to plan discounts
Extending the holiday shopping season alone isn’t enough. With 59% of consumers stressed out about holiday shopping this year because of the economy, shoppers are looking for discounts. Retailers need to meet that need while addressing their own concerns about inflation and possible recession.
To give shoppers the discounts they want and avoid eroding holiday season margins, retailers can analyze their customer data to decide when and how to offer discounts. For example, diving into last year’s holiday season data can show the price points at which specific products sold best, the days of the week when customers were most likely to respond to offers, and the social channels that generated the most conversions during holiday sales.
Meet your customers where they are
The amount of Black Friday ecommerce revenue coming from mobile purchases rose 2% to 42.4% in 2021, according to Adobe. Their data also showed that shoppers used their phones for more than 59% of online retail visits during the first half of November 2021. Of course, those figures indicate general trends. Only by reviewing their own data from 2021 can retailers see whether their customers relied on their phones more for holiday shopping last year.
Analyzing mobile visits to the store can also show where the drop-off points were. Did customers arrive at a landing page and leave immediately? The search result or ad that brought them there may have been misaligned with their intent. Did they load up a cart and then abandon it during checkout? They may have been frustrated with the checkout process itself. In a March 2021 survey of online shoppers, ClearSale found that 35% had abandoned a cart because the checkout process was too long or complicated.
Don’t overlook desktop data. The Black Friday 2021 conversion rate for desktop purchases more than doubled from 2020 from 3% to 6.4% percent, per Adobe. If the store’s desktop conversion rate didn’t increase, it’s a good idea to analyze that site traffic data to see where customers dropped out of their purchasing journey.
Retailers can also review social commerce traffic and conversion data as well as paid and organic search results to see which of these channels performed best and for which products and customer personas. Findings from reviews can help smooth out high-friction steps in the customer journey and improve the alignment between messaging and what customers want this holiday season.
Offer alternative payment options
One way to streamline the digital checkout process and reduce cart abandonment is to offer the alternative payment options that customers prefer. Digital wallets make it easy to buy quickly, especially on mobile devices where keying in card and billing address data is a hassle. They also give customers more reassurance about security because digital wallet transactions don’t expose account numbers to the merchant’s website or app. Because of those factors, it’s not surprising that 71% of consumers in the five-country survey said they always or sometimes buy with a digital wallet instead of a card.
Another alternative payment option is BNPL (buy now, pay later). BNPL providers allow customers to get their purchases right away but pay in installments. Meanwhile, the merchant gets paid at the time of the order by the BNPL company, less fees. BNPL can help budget-conscious shoppers with their gift purchases and increase conversion rates among price-sensitive customers.
Review the order screening process
The final recommendation for optimizing holiday 2022 revenue is to look at last year’s holiday season data on fraud and false declines. Both experiences can prompt customers to boycott a store, and both cost retailers revenue—in the form of chargebacks or lost order value. If the decisioning process is fully automated, consider adding manual review capabilities to evaluate flagged orders during the holiday season. This can raise approval rates and reduce false declines without increasing the incidence of fraud.
By using customer data to optimize holiday promotion timing, discounts, CX, and fraud controls, retailers can make the most of the traditional peak sales season even though consumers are doing their holiday shopping in nontraditional ways.