Last year, consumers spent a record $7.4 billion online on Black Friday and $9.4 billion on Cyber Monday.
Whether 2020’s holiday shopping season will mimic those numbers is anyone’s guess. What’s clear is that the pandemic has caused a lot of uncertainty around what Black Friday Cyber Monday (BFCM) will look like this year. While some brands will close their stores and skip both shopping holidays in 2020, others—who have seen sales rise due to an increase in online shopping during the pandemic—are gearing up for what they hope will be a busy holiday shopping season.
To help merchants chart a path for this year’s BFCM, Shopify Plus held a webinar, “Is Black Friday Dead?” to bring together ecommerce experts and merchants to share the trends they’re seeing, their strategies for this holiday shopping season, and how they plan to prepare for a BFCM that will be unlike any other in recent memory. Here are their insights.
A dramatic shift to digital could impact BFCM this year
Justin De Graaf, global head of ads research and insights at Google, says a major theme in 2020 has been how the pandemic has accelerated the growth of ecommerce across industries.
“We’ve seen a dramatic shift to digital in the last three months that hasn’t happened since mobile transformation,” De Graaf says.
“We expect that will continue through BFCM this year,” he says. “People will definitely still shop in store, but our research is showing holiday shoppers are already anticipating a further reliance on digital shopping.”
Google’s research indicates 73% of U.S. holiday shoppers say they plan to do more holiday shopping online this year than they have in previous years, and 77% will browse for gift ideas online rather than in store, which likely indicates consumers aren’t entirely comfortable just yet going back to brick-and-mortar retailers. However, shoppers’ loyalty to small businesses has increased, as 66% say they plan to shop at local small businesses this holiday season.
Another trend Google unearthed is that as consumers increase their online shopping, they’re also exploring new brands. Recent research indicates 30% of consumers have purchased from brands they’ve never bought from before.
“People are considering new brands and new stores or trying to help their communities as they gear up for their holiday shopping,” De Graaf says.
Consumers’ shift to online shopping is taking place across a range of products: Searches for online art supplies have jumped 400%, 600% for fashion online shopping, and 1,000% for meat delivery service. If Google searches are a litmus test for changing consumer behavior, it seems as though consumers are now more comfortable buying a range of items online—even meat. This could bode well for merchants who plan to offer BFCM sales this year.
People are shopping earlier and are seeking value over price
Along with the dramatic shift to digital and consumers experimenting with new brands, De Graaf says he’s seeing other two key trends that may impact BFCM this year: People are shopping earlier and are seeking value over price.
“To be one of those brands that capture these open shoppers, brands need to plan earlier than they have in any other year—like right now,” he says.
Last year, Google data indicated shoppers entered BFCM week with more than one-third of their shopping already completed. By late August of this year, 1 in 4 shoppers had already started their holiday shopping. Consumers are shopping earlier to avoid crowds and to avoid stockouts, De Graaf says. Even though the pandemic has led to a dramatic rise in ecommerce, it’s also led to massive supply chain disruptions that merchants must factor into their strategies as they prepare for BFCM this year.
As consumers shop earlier, they’re also shopping wiser and looking for quality items at an affordable price. Google searches for “best affordable” have grown 60% year over year.
“COVID has reset consumer expectations on what people want or need to buy. They’re going to be more focused on value and those impulse purchases may not be as prevalent this holiday season,” De Graaf says. “We’re used to seeing searches for deals, coupons, best prices. That deal-seeking behavior isn’t new, but what we are seeing is new behavior in this rapid growth of looking for value, quality, and price.”
How brands are gearing up for 2020 BFCM: Online sales, longer deals
With more customers looking for value and quality and trying new brands, several merchants are already preparing for a different holiday shopping season. Shopify Plus research data indicates several trends for BFCM 2020:
- 78% of Shopify Plus merchants surveyed plan to participate in BFCM.
- The sales season will extend beyond the weekend: About 66% of Shopify Plus merchants surveyed who are participating in BFCM plan to kick off sales the week before Black Friday and Cyber Monday, and about 33% plan to extend their sales to the week after BFCM.
- 80% of Shopify Plus merchants surveyed who are participating in BFCM plan to only offer online sales, while 20% plan to embrace a hybrid approach.
- 67% plan to sell through an online marketplace, including Amazon and Google Shopping.
- Most brands will offer some type of discount for BFCM, and most will provide a blanket discount on all items.
Data in this section is based on research conducted by Shopify’s Market Insights team. Research data was collected via an online survey among Plus merchants (n=165) between August 27 and September 4, 2020.
Flexible returns, fast shipping, and delivering a better customer experience
As the data indicates, many merchants have had to pivot because of COVID, and some of these changes may stick this BFCM shopping season. During the webinar, Jamie Levy, merchant engagement lead for Shopify Plus, talked to three executives about how their companies have had to adjust during this time.
Mackenzie Yeates, co-founder and chief brand officer at Kotn, a clothing brand focused on ethically-made premium essentials, says the Toronto-based company has adjusted its in-store sales target and shelved plans to open a brick-and-mortar location in the U.S. during this holiday season. Yeates says Kotn has been laser-focused on providing an even better customer experience.
“We’ve extended our return [policy], and we’ve just been trying to communicate as much as possible with our customers when we are seeing shipping delays here and there,” she says. “We’ve been working on negotiating some deals with different partners leading up to the holiday, so we’re hoping to offer next day or same-day shipping for people in the greater Toronto area, which is really our core community.”
Quita Coleman, fashion director at accessories brand Sassy Jones, says her company also has adapted to the needs of its customers by offering more flexible return policies.
“We’ve definitely adjusted a lot of our shipping and our return policies, just trying to make it more friendly for our customers, and [we’ve adjusted] our communications policy. We make sure that the customers know, ‘This is where we are in the process.’ ‘This is delayed.’ [We make] sure we’re communicating with our customers because we’re selling an experience, not just the product,” Coleman says.
Peter Keller, CEO of Fringe Sport, a supplier of home gym equipment, says his company has seen an influx of demand, but supply chain disruptions have led to stockouts, so Fringe has had to pivot.
“What do you sell when you have nothing to sell? We’ve had to pivot a little bit to pre-orders, which we’ve never done in the history of Fringe. We had to change our policies a little bit around pre-orders to be very customer-friendly,” Keller says. “We let them know that once we have your credit card digits, if you find the product somewhere else it’s going to be really easy to get that back. We’re going to sustain a really high level of customer support even in these uncertain times.”
Keller says due to panic buying during the pandemic, Fringe has had to scale its operations at a rate and pace it never had before. However, that experience could make the company even more prepared for this year’s BFCM.
“We’re having to scale the business like crazy, because with Black Friday Cyber Monday, we have a lot of business, but we have all the time in the world to plan for it and to get ready for it. Typically, we start intensely planning for BFCM about six months out, and as we get closer and closer, we’re building and making everything more robust,” Keller says. “For this boost of demand, which was more sustained than BFCM, we had no warning whatsoever and so we had to very, very quickly build the procedures, the team, and everything to get us there.”
Authenticity is the differentiator this BFCM
For BFCM this year, the executives say it’s important to be genuine and to authentically communicate with your customers and not just focus on pushing out merchandise. Yeates says Kotn plans to donate 100% of its profits from BFCM to building schools in Egypt.
“That came just from getting to know the people that we work with in our supply chain and understanding what a big issue literacy was amongst cotton farmers and just the lack of access to education. We decided to use BFCM as an opportunity to really hammer that message home and do something that was impactful,” Yeates says. “For us, BFCM has always been an opportunity to really speak out loud about the things that we are really passionate about as a brand.”
Coleman says customers “want to know the story behind what you’re doing,” since more price-conscious consumers are now aligning their purchases with their values.
“We saw a lot of new customers… We haven’t run any [Facebook] ads since January 2020, so it was really important to let people know the story behind the pieces, the story behind the creation. Reiterating that throughout every single thread of the business was key all year long,” she says.
All three executives said now more than ever, it’s critical for brands to focus on their customer experience as they prepare for BFCM. That means flexible return policies and over-communicating with customers about shipping delays and stockouts. While many companies may offer free shipping for BFCM this year, Keller says “free shipping isn’t table stakes—fast shipping is.” Yeates adds that this year it’s important for brands to be even more sensitive about what consumers are dealing with. Taking this approach may even help to strengthen their customer relationships.
“People are in a whole totally different mindset. They don’t want to be told to buy stuff,” she says. “A lot of people were being laid off at the beginning of the pandemic and you have to be sensitive to people’s real-world situation.”
Google’s De Graaf says although merchants have experienced significant shifts in their business this year, it may be to their benefit as BFCM approaches.
“As we’re looking ahead to the holiday season, I find a lot of comfort in knowing that a lot has stayed the same, but we have to be ready for what’s different.”