The 2017 Black Friday Report (and killing the “it can’t be that big this year” myth)

This post is written as part of our StudioForty9 Retail Excellence Ecommerce Dashboard series in partnership with Retail Excellence The Black Friday period was again an enormous success this year. While there did seem to be a sentiment among the…

This post is written as part of our StudioForty9 Retail Excellence Ecommerce Dashboard series in partnership with Retail Excellence

The Black Friday period was again an enormous success this year. While there did seem to be a sentiment among the general public that “it won’t be as big as last year”, the feeling was quite the opposite amongst ecommerce teams who prepared for serious sales, and were rewarded with continued strong year-on-year growth building on exceptional growth from 2015 and 2016.

Once again many retailers decided to go early this year, indeed we saw a number of sites reeling under serious pressure as early as the Sunday before Black Friday, and again this year going early seemed to be a good strategy. So much so, that there were extremely few ecommerce sites waiting until Black Friday to get stuck into sales.

The concept of “Cyber Week” is becoming commonplace – and certainly most retailers continue sales for all of “Black Friday Weekend” from the Thursday before Black Friday, all the way through to Cyber Monday.

On that note, Cyber Monday itself seems to have faded into the background as a marketing hook, but that hasn’t stopped strong sales through the weekend, through Cyber Monday, and even on into the following week.

The bottom line appears to be: if you can maintain promotion prices, and you can continue the marketing push, and you have the stock, then Cyber Week / Black Friday Weekend will deliver sales as long as you can keep up with it.

Contrasting Approaches

This year we saw the approach to promotions and marketing fall into two different camps which resulted in two contrasting growth trajectories.  

On the one hand, there was a concerted effort by many retailers to be more measured about the promotions on offer. There were far fewer “across the board” discounts as these retailers concentrated on offering good promotions and perceived value on specific products or ranges, backed by more modest general discounts or offers such as ‘free shipping’ and ‘double loyalty points’. This effort to protect margin was often combined with a more modest spend on marketing.

On the other hand, we still had the retailers who continued to discount, deep discount, and market at an almost frenzied pace.

In practically all cases, amongst the retailers we surveyed, we saw growth. However, those in the first camp grew at a more modest rate corresponding with their measured approach: in a rare case we saw flat or negative growth, but more generally growth was in the teens topping out about 30%. Those in the second camp saw at least 60% growth spiking at over 180% growth for Black Friday weekend in a reasonable number of cases.

Retailers in both camps have declared themselves satisfied with the outcome – those who tried to protect their margin did so and generally still saw decent growth, while those who pushed hard hit astonishing figures again this year.

While a lot of focus was placed on offering clear value to the customer, we also heard a number of reports that demand was so strong retailers were able to clear out the dustier parts of their stock room and shift older stock during the sales.

Dispelling the “it can’t be that big again this year” notion

In my Black Friday report last year I took a tilt at the notion that Black Friday cannibalises Christmas sales, and surveyed 15 retailers to find out that in all cases sales grew YOY in the period between Black Friday and Christmas, and showed no evidence of cannibalisation online.

This year I’ve examined the thinking I encountered a number of times in the weeks leading up to the sales, that Black Friday is “going away” and “can’t be that big again this year”.

This didn’t correspond with what I was hearing from our own clients, so I decided to survey a number of randomly selected clients for YOY growth over the Black Friday weekend for the past four Black Friday Weekends.

Year on Year Growth for Black Friday Weekend 2014 to 2017

Here are the results of the survey of the four Black Friday Weekends (the 5 days of the Thursday before Black Friday to the following Monday inclusive) from 2014 to 2017:

For those interested in details, the method used in the survey is explained at the end of this article.

When we look at the growth visually in charts, as shown below, it’s immediately obvious how enormous the growth was between 2014 and 2015 where we see a staggering growth rate of 264% in revenue and 82% growth in sessions. Remember, these are average growth figures across the sites surveyed.

In fact, in the first year-on-year results surveyed, the only figure that showed negative growth was Average Order Value. It’s very tempting to assume that this was the product of a rash deep discounting approach taken in 2015 when retailers scrambled to participate in Black Friday.

In the table above, I included some figures to demonstrate, as an example, what the average growth may look like across the various KPIs.

What we can see is that without exception, all KPIs have shown enormous growth over the four periods between 2014 and 2017.

While it might look like growth has slowed, owing to the big first year, we can see that in fact – yes, it was “that big” again this year and that actually average revenue growth and sessions are both trending up this year over last year. So not only was it “that big”, it was bigger and growing.

The example figures tell a great story: if you turned-over €10k on Black Friday Weekend, from the Thursday to the Monday, in 2014, on average your growth would have been to €36k in 2015, to €48k in 2016 and just short of €70,000 in 2017.

It’s worth reiterating that this is an average growth figure among a random sample of retail / B2C sites, we did see some flat and negative growth in the sample, and we also saw a number of mouth-watering growth rates going as high as 180% growth in 2017 on top of already huge 2016 sales.  

Nevertheless, as an average figure, growth from €10k to €70k for just one weekend period in just four years is big by anyone’s terms.

Summary

Black Friday continues to grow and continues to deliver a great selling opportunity for retailers who want to participate. Whether you go all out, or take a more conservative discounting and marketing approach, you will see a high volume of sales and will almost certainly see strong year-on-year growth.

In two surveys we ran over the past two years we’ve seen that the phenomenon continues to grow and does not cannibalise online Christmas sales. Now the only myth remaining to examine is whether retailers can properly protect margin and make profit during the Black Friday sales.


Method

The survey above was not an exhaustive or extremely scientific study and was limited by time available to collect the figure – hence the slightly odd number of 8 sites surveyed.

Nevertheless, the sample of sites is varied and representative of the industry as a whole. Each site has tried to participate in Black Friday in some capacity over the past four years.

Twelve sites, chosen at random, were originally surveyed. Four had negligible or no sales in 2014, which distorted growth averages, so they were removed to leave eight Irish B2C / Retail Ecommerce sites contributing to the table and charts.

The sites are all Irish and sell B2C / Retail across a wide variety of verticals.

The sites were surveyed using Google Analytics. Conversion rate is measured as Transactions over Sessions expressed as a percentage.

Black Friday Weekend is defined as the Thursday before Black Friday to Monday after Black Friday inclusive – 5 days in total – in 2017 this was from Thursday 23rd November to Monday 27th November.

The average growth was arrived at by taking the average KPI figure across all sites for one year and comparing it with the average KPI figure across all sites for the following year. It was not taken as the average of change between the years for the KPIs.