23 Nov Black Friday a sustainable concept? Or to be renewed?
Last year something strange happened at Black Friday. Revenues declined, while fuel prices dropped too. This is very illogical because usually when the fuel prices drop, people are more motivated to make purchases. Over the years, you see that there was a constant growth. This growth has been decreasing since 2012. That leads to the question: “Is the concept of Black Friday still sustainable?”.
This in Microsoft Power BI generated model shows the total revenue on Black Friday in Billions. It Shows That It has been decreasing since 2012. The average amount spent per person decreases. As well as the number of visitors. Since 2013 the number of visitors dropped from 249 million to 233 million.
In North America there is a growing resistance to Black Friday. The younger generation does not see why you would sleep in front of a store to buy a TV with a high discount. Especially not when you can buy that specific type of television for the same price on Cyber Monday, ordered on the internet. It also appears that the offerings on Black Friday are repeated every year and that some stores even have discounts on a product at any other time in the year and they were even cheaper than on Black Friday.
Black Friday 2014
Black Friday 2015
How Business Intelligence enables you to get the customer back in the store!
So it’s a good idea to look at how retailers as Walmart, Costco, The Home Depot and other large retailers can respond to these changes in the market. The tendency is that people actually prefer to purchase that beautiful large TV for the best price online. Eventually you compete with other large retailer. So you need to have an attractive offer and jump out among all the other providers.
Business Intelligence gives you more insight into the marketplace and your own store. If you rise all prices in the week before your big sales weekend, the final reduction to the consumer compared to the normal price of course is getting lower. The customer is not stupid, and will notice that he is getting fooled after a while. The customers motivation to buy more from you decreases. So what you actually want to see is how much discount you precisely have given. So there should be an analysis of the average selling price of an item and the sales price on Black Friday. That way, you quickly see whether you really have given as much discount as imagined. In other words, if you do not your customers be fooled.
In addition, you obviously want to compete with the big online retailers. First of all, you of course need a powerful webshop. But you also want to know if a product is offered for a lower price at the competitor. Once that happens you want to get a signal to ensure that you can remain the cheapest. For example, by wrapping the product in question in a special offer and that way be cheaper than the other provider. Below is a list of the top 10 largest retailers compared to the top 10 online retailers. You see that Walmart online and offline very good. As well as Amazon. The best online retailers will rise in all probability in the general list of retailers.
Revenue of all US retailers 2013 (billions)
Walmart: $ 334,3 (+1,7%)
Kroger: $ 93,6 (+1,6%)
Costco: $ 74,7 (+5,2%)
Target: $ 71,3 (-0,9%)
The Home Depot: $ 70,0 (+6,6%)
Walgreen: $ 68,1 (+1,3%)
CVS Caremark: $ 65,6 (+3,1%)
Lowe’s: $ 52,2 (+3,6%)
Amazon.com: $ 44,0 (+27,2%)
Safeway: $ 37,5 (-3,7%)
Revenue of online US retailers 2013 (billions)
Amazon.com: $ 67,9 miljard dollar (+20,3%)
Apple: $ 18,3 (+24,0%)
Staples: $ 10,4 (+1,0%)
Walmart.com: $ 10,0 (+ 30,3%)
Sears Holding: $ 4,9 (+16,7%)
Liberty Interactive: $ 4,8 (+11,6%)
Netflix: $ 4,4 (+21,2%)
Macy’s: $ 4,2 (+31,0%)
Office Depot: $ 4,1 (+1,0%)
Dell: $ 3,55 (-9,0%)
In conclusion, you can say that a day like Black Friday has not exceeded its expiration date, but retailers have to be careful that they do not lose days like Cyber Monday out of sight. Choose for relevance. Deliver value to a customer. Ultimately that’s what they are looking for. By using this in a proper way in which to play, customers automatically see where they need to be to get that added value as well. Hillstar Business Intelligence helps companies to gain insight. As a buyer you want to know what the need of your customer is and how you can serve that customer optimally. But also market information like sales prices of a competitor. So you can see at a glance where things can be improved.
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