We know that marketers and brand owners are reflecting on the performance of their seasonal sales campaigns, particularly during the holiday period.
How is your team responding to changing sales trends during the holiday season? Have you considered Black Friday and Christmas Gifting Strategies to maximise sales without discounting?
Analysis is crucial for understanding shifts in consumer behaviour and assessing the impact of retail events on traditional sales patterns. Last year, the analysis didn’t end with identifying trends; it extended to understanding the underlying factors driving the shifts in consumer behaviour.
Did you find that your 2023 Black Friday sales beat your Christmas and Boxing Day sales?
You’re not alone. Black Friday mania has officially hit Australia, and it means that our retailers need to pivot.
In fact, the Australian Retailers Association (ARA) had forecasted shoppers to spend around AU$6 billion but in reality, Australians spent nearly AU$9 billion in 2023, a 22% YoY increase.
The proximity of Black Friday to Christmas has led to a merging of these events in consumers’ minds. With household budget pressures and the allure of Black Friday discounts, many shoppers allocated part of their Christmas gift budget to Black Friday sales. This trend was particularly noticeable last year, prompting our retail clients to transition from discount-focused Black Friday sales to value-added promotions during Christmas.
According to Monash University, last year, Australian shoppers indicated they would be allocating the highest portion of their budgets to Black Friday sales, with an average projected spending of $434, followed by $370 at Boxing Day sales and $362 at Cyber Monday. This means a big chunk of their Christmas shopping budget goes to Black Friday. For retailers, it’s a sign that things are changing in the market.
As a result, the retail season now effectively runs from October through December, encompassing both Black Friday and Christmas. This presents retailers with a unique challenge: How do they seamlessly transition from Black Friday promotions to Christmas campaigns while maximising opportunities to promote their brand?
Did Black Friday Cannibalise Your Christmas Sales?
Black Friday isn’t just a crazy shopping day anymore. It’s a huge event that affects how people shop for months.
Conversations we’ve had with retailers have revealed enthusiastic exclamations about the success of Black Friday deals, that unfortunately, quickly give way to subdued admissions of lackluster Christmas sales.
So, while you’re analysing your Black Friday/Christmas results from 2024, the question that should be front of mind is – did Black Friday sales cannibalise Christmas sales, or did they complement each other?
Another important question to ask yourself is – were consumers enticed by value-added propositions rather than steep discounts, leading to changes in spending behaviour?
A Change in Strategy – Black Friday and Christmas Gifting
The understanding that continuous heavy discounts may harm profits is leading to a move toward a strategy focused on adding value. Australian retail turnover actually increased by 2.0 percent in November 2023, according to the Australian Bureau of Statistics (ABS).
With the growing momentum of Black Friday sales, this event has become a crucial aspect of year-end retail. Businesses are shifting their focus from quantity to quality, opting for more targeted promotional offers to encourage customers to ‘trade up’ instead of offering widespread discounts across their product range.
Could ‘Premiumisation’ Be the Future for Black Friday?
The change in strategy reflects the increasing importance of Black Friday, acknowledging that a more focused approach can be advantageous for both businesses and consumers. This change to prioritising value over just discounts helps to keep profits up, and makes shopping better during the important ‘golden quarter’ of the year.
We have seen a significant increase in promotions encouraging consumers to ‘trade up’ and spend more for rewards which aligns with the premiumisation trend. This not only helps increase average transaction values but also enhances the perceived value of the products or services being offered.
So, how can you do that effectively?
A lot of our clients have leveraged the Black Friday/Cyber Monday sales period to promote their products with value-added solutions, aiming to reduce reliance on heavy discounting, which as I mentioned can ultimately devalue their brand over time.
One approach we’ve seen success with is the use of introducing tiered spend thresholds, as an example if you spend more than $110 you receive a free gift, to drive your order value higher, offer an additional tier such as spend more than $179 and reward the customer with a higher value gift.
GWPs linked to different spend thresholds will increase your AOV
We’ve helped countless brands seamlessly manage their Black Friday and Christmas promotional offerings so that their Black Friday and Christmas sales work together, not against each other.