Jim Mann, Director of Acquisitions at Thrasio, discusses what retail habits in the lead up to Christmas tell us about customer behaviour
Now that the dust has started to settle on the Black Friday weekend, retailers can start to take stock of what happened and see what it can teach about the year ahead.
The headline is that the picture appears to be pretty mixed. Early predictions from the likes of Barclays, PwC and GlobalData were for a record-breaking weekend. Thrasio’s own research revealed 56% of UK consumers intended to finish their shopping by the end of Black Friday. However, subsequent studies show a fall in high street footfall for the first time and a range of results for the largest retailers. So what happened?
First, let’s not get carried away with reading too much into the data. We won’t know the full story until after Christmas – why? Because, in the UK, conditions are very unusual. Our analysis has shown that 51% of consumers have changed their buying behaviour due to supply chain fears. There’s also the bounce back from last year’s lockdown Christmas – 23% plan to spend more this year to make up for it. And, finally, there’s the unstoppable move to online shopping – 48% will buy the majority of their goods online versus 40% in 2019. Essentially, this year, people are planning to buy more, earlier and online. This may ultimately mean when all the data is analysed, that rather than having one big weekend like Black Friday, we see a protracted period of higher spending spread out across a lot of online sellers.
For online sellers this poses an interesting set of challenges and opportunities. We first have to consider whether this is the ‘new normal’. Our own research seems to indicate that at least, with respect to online behaviour, it is. This is because the biggest rises in people planning to buy online were seen in the oldest and youngest age groups: 18-24s will do 42% of their Christmas shopping online (34% in 2019) and 41% of 65+ (33% in 2019). Such large in movement in the youngest demographics would tell you that this will be a sustained, long term shift, while older users, who you would expect to be the most likely to revert to the high street, seem to have become permanent ecommerce converts.
As a result, sellers can now cater to a much wider potential customer base and potentially view periods like Christmas as long term campaigns rather than short sharp sales booms.
January will be the ideal time for many sellers to reevaluate their offering and strategy. Paying close attention to sales data, particularly who bought what, when compared to previous years is going to provide invaluable insights into how these trends have had a direct impact on your business. If your offering has appealed to a new, wider demographic this may offer direction on where to focus your marketing efforts to capture a new customer base. It will also tell you where you could expand your brand offering. Conversely, if the sales data shows no noticeable change, – ask yourself why haven’t you seen any of these new customers? One of the biggest advantages sellers have over traditional retailers is the ability to quickly respond to what the data indicates. Remember, if you feel the data you collect is inconclusive, don’t be afraid to go to the source – ask your customers directly what they think about your offering and what they would like to see. You can never have too much information and you would be surprised how much information customers are willing to provide – particularly if you operate in a niche category.
Finally, I’m a firm believer that the customer experience can always be improved. Why a potential sale fails to convert can tell you a lot about your business. Where users bounce, drop off or abandon basket allows you to see where there are weaknesses in the customer journey. I would pay particular attention to the behaviour of any new customer segments. It will help you determine how you can adjust your user experience to appeal to this group.
When you land on a course of action, remember to test first. See at a small scale how it impacts your sales. After all, you don’t want to alienate your existing base in pursuit of new customers.
If you are an online seller who had a tough Black Friday weekend – do not be disheartened. All the long term ecommerce trends are in your favour. January will be a good time to dust yourself off and redouble your efforts with a new strategic vision. On the other hand if you’ve had a good weekend – don’t rest on your laurels. There’s plenty more growth to be had and an energised new customer base to capture.