New Research: Black Friday Shoppers Kinda Suck – But You Can Fix It
There’s been a lot of buzz this year about the Black Friday-to-Cyber Monday shopping weekend in the past few months, running the gamut from public backlash against Thanksgiving Creep to eCommerce giants like Amazon dropping all pretenses of waiting for the actual holiday weekend, rolling out Black Friday-caliber deals through all of November. It’s been a strange amalgamation of retailers trying to edge out the competition by offering deals earlier and earlier, while running damage control on the public’s growing distaste for cutting into the holiday’s family time.
Still, one thing is clear: the traditional shopping holiday model for the Thanksgiving weekend can’t last much longer, and in fact may already be dead. There have been too many game-changers in recent years, especially due to the rise of eCommerce as shoppers increasingly take to shopping online and through mobile. The market is noisier than ever, and retailers are slashing prices lower and starting even earlier to try and gain that slight upper hand. It’s not sustainable.
Another thing that can’t last: how retailers, especially eCommerce retailers, handle Black Friday and Cyber Monday shoppers. Deep discounts and one- or two-day promotions, as we’ve pointed out in previous years, don’t make for significant ROI, and often draw in the “wrong” kind of shopper.
To prove it, we ran the numbers. We analyzed nearly 6 million orders placed over the holiday season by more than 3 million consumers to take a closer look at who exactly retailers compete so fiercely for – and what long-term value they bring to your company.
Here’s what we found:
Black Friday Shoppers: Fewer Purchases, Quick to Churn
The study found consumers making their first purchase with a retailer on Black Friday are 19 percent less likely to purchase again during the holidays than other customers and made 20 percent fewer purchases from the retailer over time. What’s more, first-time Black Friday shoppers will churn 274 percent faster than customers who buy during other times of the year.
Cyber Monday Shoppers: Even Fewer Purchases, Even Quicker to Churn
Turns out Cyber Monday shoppers are even more fickle, 26 percent less likely to make a repeat purchase during the holidays. They made 23 percent fewer purchases over time and churn a whopping 296 percent faster than customers who buy at other times of the year.
Though the numbers are bleak, they’re not overly surprising. It makes sense that huge deals will draw out shoppers who hop from retailer to retailer looking for lowest prices. By putting the emphasis on prices over value, retailers are setting themselves – and their profit margins – up for taking a hit over the holiday weekend.
Surprisingly, however, our study uncovered some interesting and more hopeful insights as well:
Black Friday and Cyber Monday Shoppers Spend More
Despite being less-than-ideal long-term customers, more likely to churn and less likely to purchase, one thing is clear: Black Friday and Cyber Monday shoppers come ready to shop. Customers who made their first purchases over the Black Friday/Cyber Monday weekend spent 12 percent more than other customers throughout the year.
This is significant because it speaks to both the potential value of these customers, and to the wastefulness of the current shopping-weekend strategy. There is much more for retailers to gain beyond a one- or two-day sales bounty. What’s more, there is clear potential for a strong retention strategy to impact sales through the rest of the year.
Excitement for Holiday Weekend Means Faster Purchases, Longer
Our study found the time it takes consumers to make an initial purchase after registering with a retail site is significantly shorter in the period leading up to and through Black Friday and Cyber Monday, and persists for a short time afterward.
One month before these holiday sales events, the time from registration to purchase averages 23 days. However, this number drops as it gets closer to Black Friday and Cyber Monday: One week before the holiday weekend, the time between registration and first purchase averages 13 days, and it stays in this range for at least three weeks following Thanksgiving.
The significant portion of this finding is that the time to first purchase remains short well after the Black Friday weekend. It suggests that the excitement generated for shopping during the holiday weekend carries over into the rest of the holiday season, which means there is clear opportunity to score repeat business.
There’s no denying that Black Friday and Cyber Monday are important to retailers to drive sales. But now, the importance of that weekend has been diluted with the inclusion of sales on Thanksgiving Day and, well, pretty much all of November. Retailers have started to think outside the box when it comes to promoting holiday sales, and it’s time marketers to do the same for how they treat holiday shoppers.
Our best advice? Focus on building loyalty, even just within the shorter holiday shopping window. Black Friday and Cyber Monday shoppers as they are now don’t deliver long-term value, but there is clear opportunity there to better your retention strategies and lengthen their engagement. Your profit margins will thank you.