5 Black Friday Secrets of Highly Successful Online Retailers
Amazon might be the king of the hill for the moment, with 43 percent of all online retail sales in the U.S., but there are still plenty of retailers running highly successful campaigns on Black Friday and Cyber Monday. Why are they more successful than others? What's their secret?
Let's look at five Black Friday and Cyber Monday approaches highly successful online retailers tend to have in common.
1. Start Early
This is a common piece of advice given this time of the year, but it is just as often ignored. Consumers know there are big discounts coming but it doesn't mean they always know what they want. Pique their interest and build anticipation by previewing your best products and their discounts. Remember, if you're starting on Thursday before Black Friday, there will be too much noise to cut through.
Here is the last year's search interest for "holiday deals", according to Google Trends:
Source: Google Trends, 2016
There was a hockey-stick growth in search queries starting the second week of October (as in this week). That's five weeks before Black Friday!
Highly successful online retailers understand this trend and prepare for it well in advance. They grow email lists that are then leveraged to build excitement and anticipation. They run early access or sneak peek campaigns in weeks leading up to Black Friday. Finally, they offer consumers a way to sign up for deal alerts via email or text messages.
2. Include Your Best-Selling Products
There is usually a bit of a discrepancy between how the retailers see the holiday season and how the consumers think about it. For many retailers, the Black Friday and Cyber Monday is an opportunity to get rid of slow-moving inventory and to free up cash for next year's products. For consumers, it is a chance to get products they wanted for months at the best prices of the year.
This gap could create some friction and lead to lost sales and consumer resentment. Even Amazon is not immune to this problem. In 2015, they received a lot of angry feedback and negative press for their poor product selection during the Amazon Prime Day sale.
Successful retailers understand they need to discount their most popular products in order to attract consumers and generate strong sales on Black Friday and Cyber Monday. Of course, it doesn't mean you have to apply the same discount across your entire product portfolio but excluding top-sellers from your promotions is a mistake that will cost you sales.
3. Structure Discounts to Encourage Higher AOV
The key to boosting your AOV on Black Friday and Cyber Monday is to structure your discounts where buying more means more savings. The most common example of this is a tiered offer where the discount increases once a certain threshold is met. For example, 10% off orders $100 or more, 15% off orders $200 or more and 20% off orders $300 or more.
Source: Pottery Barn tiered promotional offer example
Alternatively, if you have good/better/best options for your products, discount higher-priced options more to increase their perceived value. Remember we usually make decisions not based on our absolutely preferences but based on the relatively value of choices in front of us. The incremental cost of your best option is usually small so by discounting them more you increase it's relative value for the consumer and capture real value for your business.
Highly successful online retailers take full advantage of the spending frenzy the consumers are in and the common psychological biases we all share. They used tiered discounts and decoy pricing to increasing the relative value of adding more items to cart or choosing a more expensive option.
4. Create Urgency and Preserve Margin
Nothing creates a sense of urgency better than a fear of missing out on a great deal. Obviously, there is a built-in urgency in the limited-time nature of the Black Friday and Cyber Monday promotions. However, one way to dial it up to 11 is to lower your own discounts over time.
For example, you could start with a 30 percent discount sitewide and then lower it by a single percentage point every two hours. You will have to do some work ahead of time in order to explain the discount schedule to your mailing list, for example. The first upside is a very high level of urgency to get the maximum discount. The second upside is the fact that not everyone will be able to get 30 percent and so you are able to protect your margin a bit better.
The other option worth mentioning is the concept of scarcity. Highlight the products that are running out to create even more urgency to buy. In combination with timers and decreasing discounts, your promotion will be irresistible.
Successful retailers understand the power of urgency and use it to generate strong online sales. They use timers, scarcity and decreasing discounts to get consumers to order now and minimize comparison shopping.
5. Take Full Advantage of Your Email List
There is no doubt consumers will get a lot of emails leading up to Black Friday. However, you mostly have two big levers to pull to make a difference in your Black Friday/Cyber Monday online campaign results - paid search and email. According to Adobe, in 2016, paid search was responsible for 38.3 percent of online sales and email drove 17.8 percent.
While the study does not talk about ROI/ROAS for each channel, Google AdWords and Bing Ads cost per click will go through the roof as you get closer to Black Friday. On the other hand, email audience is something you should have been building all year and now will be the time it pays you dividends.
Effective retailers build and nurture their email lists all year long and then deploy them in early October to start building excitement and anticipation. Those same companies run early access and early bird special campaigns leading up to Black Friday, further growing their lists. They email frequently, at least twice a week. Finally, they email everyone - prospects, customers, sweepstakes participants, etc.
Conclusion
The key idea to take away from the above "secrets" is that they are no secrets at all. Successful online retailers don't have a magic wand or a silver bullet to generate explosive growth during the Black Friday and Cyber Monday promotions. What they have is the know-how and the organizational discipline to start early and implement effective best practices throughout the entire online shopping experience.
About the Author
Andrey Milyan is a veteran of the digital marketing industry with over 12 years of experience helping some of the most iconic brands develop their marketing strategy online. Over the years, his roster of clients included P&G, Verizon, LG, CHANEL and many others. Today, Andrey runs an independent consulting practice at AndreyMilyan.com, helping early-stage clients grow their online sales.
