Black Friday has become a new line in the sand in the battle between retailers and their customers. What used to be the day on which retail finally turned a profit has become a ferocious fight for share of wallet. Retailers use every marketing trick they have - from secret pre-sales to supply limitation - in order to persuade consumers to part with their cash. Consumers in turn fight for the best possible deal, either by using the tools of digital and social (comparison web sites, shared promo codes) or just with their elbows and fists.
Products which once would have been considered purchases, such as 4K TV sets or kitchen appliances, become impulse buys, highlighting once again the extent to which loyalty is almost a thing of the past. Get your proposition wrong on the day when product and price are at their most visible and even your most engaged customer will desert you.
Be prepared in order to harness the opportunity
What marketers also need to learn from Black Friday is just how essential it is to have their marketing engine finely tuned. If your customers are going to be in market, can you spot where they are? Is your content management system ready to serve the same offers they have just seen on TV or social? Does your data management platform have the capability to adjust to shifting patterns of demand and also inventory availability across the day?
Each year, some retailers get caught out because they did not have an advertised product on the shelves or failed to deal with the volume of demand on their website. Less often, their marketers get found out for failing to deliver the volume of traffic expected so sales undershoot targets. The reason? Too many marketers still hold to a model of customer loyalty which believes individuals are waiting for messages about their own promotional offers and are therefore blind to what rivals are doing. That in turn blinds marketers to the reality that relationships in the online, social and increasingly even the physical world are frictionless.
At a roundtable in 2016, a group of senior marketers shared their own insights into the way customer behaviour is shifting and how they are responding to it. All recognised the disruptive effect of search and social on carefully-planned customer journeys. Lifetime value has become less important to calculate than the maximum your brand is prepared to bid for an impact in a social network. If you don’t catch the consumer when they have their wallet or purse in hand, their LTV will trend to zero because you have missed out on their next purchase.
The smart application of data supported by a CRM programme is key
Fighting back means getting into the acquisition battle - and that runs against the marketing industry’s narrative of the last two decades. Customer relationship management and the lower cost of retention have been the dominant modes of thinking. But consumers are now almost perpetually in-market, looking for deals and indicating their intentions via searches, likes, shares and all the other forms of digital engagement.
Real-time bidding and programmatic advertising have shredded what used to be a planned run-in to Christmas and an expected bonanza of profitable purchases, prior to dumping inventory in the January sales. Now the model has been flipped and brands are using flash sales to win customers, but at a better margin than those distress inventory drops.
And this is the lesson which marketers really need to take out of Black Friday. Your customers have an appetite for a deal which you can’t ignore. So use the reach, agility and accuracy of your data management platform to hit them when it matters. Then back it up with a CRM programme that retains their interest ready for the next market event.
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