It’s that time of year again. Time to start thinking about Black Friday and Cyber Monday. Black Friday is steadily surplanting Boxing Day as Canada’s busiest shopping day. And it marks the start of the holiday shopping season as consumers rush to make the most of the sales.
In previous years, Black Friday was always pretty straight forward – just make sure you’re on top of the latest consumer trends and prepare for more traffic than the year before and you’d be set. But since 2020 things have become considerably more complicated. The pandemic, lockdowns, supply chain troubles, and now the rising cost of living crisis. What will the holiday shopping season look like in a third consecutive “unprecedented” year?
The three main challenges to online retail during Black Friday sales this year will be brick-and-mortar sales steadily heading back towards pre-pandemic strength, continuing supply chain issues affecting stock levels and delivery times, and the rising cost of living tightening shoppers’ budgets.
Key factors affecting Black Friday 2022
In 2020, of course, pretty much everything was happening remotely; working, socialising, shopping. Is it any surprise then that online Black Friday sales in 2020 grew by a massive 31% compared to pre-pandemic 2019?
With brick-and-mortar stores back open last year, one might have expected online sales to drop significantly. However, although Black Friday and Cyber Monday ecommerce sales were lower than 2020, by 1.3% and 1.4% respectively, the whole month of November was actually up by 11.9%.
While it is still the busiest time of year for ecommerce merchants, it is no longer so focused on the traditional handful of days. This is good news for websites (and website admins!) that won’t have to withstand quite such intensely focused stampedes of traffic. Although, unfortunately this could be bad news for smaller businesses that may feel pressure to keep up with the extended period of discounts provided by giants such as Amazon.
The split between brick-and-mortar and ecommerce is tricky to predict based on the evidence of the last two years. Last year on Black Friday, in-store sales made a tentative recovery of 7% YoY, and have been gently rising throughout the first half of 2022. Even with the rising cost of living affecting shopper’s budgets, we expect the lure of sales to draw even more shoppers back into stores in November.
Continuing supply chain issues
Fear of shipping delays prompted shoppers to start their holiday spending, and brands to start their festive sales, earlier in 2021. Amazon’s first Black Friday discounts began in early October and other retailers followed suit so as not to miss out. In 2022, soaring fuel prices are piling up on top of the existing global shipping complications such as limited supplies of shipping containers, not enough HGV drivers, etc. We expect similar sales tactics this year, to relieve the pressure on stock levels during a single five day period as well as to compensate for slower order and delivery times.
Earlier sales require merchants to plan ahead for extended periods of higher traffic and more demand for stock. Out Of Stock messages were up by 169% vs pre-pandemic levels during November 2021, according to Adobe Analytics. This is particularly problematic when you consider that 70% of shoppers will abandon a brand if one item they are looking for flashes the out or stock message
With three months still to prepare, it is a good idea for stores to begin planning ahead now, whether by ordering stock early or looking for local suppliers to supplement their inventory. It is also a good idea to invest in product discovery that can intuitively redirect customers to similar items if their preferred choice is out of stock.
Cost of living crisis
Inflation in Canada is the highest it’s been in three decades and shoppers are feeling the pressure. A recent survey showed that 88% of consumers are worried about the cost of living. 20% are expecting to have significantly lower budgets for the festive period. However, despite this, 91% of respondents are still planning as much, if not more, engagement with Black Friday sales this year compared to last year.
As everything from fuel to groceries becomes more expensive, shoppers’ buying habits are changing as they search for the best deals. Last year, Amazon was the cheapest retailer during the festive period for the fifth year running, averaging 14% cheaper than major competitors across over 15000 products. Amazon accounted for 17.7% of total Black Friday sales last year and we expect this market share to grow as thrifty shoppers look to make their budgets stretch as far as possible.
A life-line for many as prices rise is the options to buy now, pay later (BNPL). The increasingly popular payment option provided by companies like Klarna and Afterpay, enables customers to pay for their purchase in installments, spreading out the cost over a couple of months without paying interest as they would on a credit card. Black Friday 2021 saw a 105% increase in BNPL payments compared to 2020 and it is expected to grow again in 2022.
So what will Black Friday 2022 look like?
With so many factors at play affecting consumer’s decisions, this year’s Black Friday sales are certain to hold surprises for us all. Reluctance to wait for the delays in the supply chain could encourage people to shop in store. While rising fuel costs could encourage them to shop from home. It is a delicate balance between savings and logistical options which only time will tell.
We predict that most likely there will be a considerable rise in brick-and-mortar footfall on Black Friday based on 2021 figures and increased traffic in the first half of this year. Ecommerce is likely to see a dip on Black Friday itself but overall, throughout Black Friday, Cyber Monday, and the rest of November, we expect there to be an increase in sales, supported by the increased use of buy now, pay later options.
Marketplaces such as Amazon are going to take an even larger percentage of overall sales as shoppers search for the best deals. So omnichannel sellers will have the advantage, ready to meet customers wherever they choose to go.
How can we help you prepare for Black Friday?
This isn’t our first rodeo. In fact, we’ve been helping ecommerce businesses on BigCommerce to streamline and optimise their websites since 2009 – incidentally the first year that Black Friday really took off online. We’ve been doing this since the very beginning, honing our skills and expertise every year. So if you want to talk to the experts and get ready for your best Black Friday yet, get in touch.