Retail Trends Report for Peak 2024.
This report has been pulled together to support independent brands’ plans and execute the final quarter of the year with success. Within this article, we will look at;
The Shopper Wishlist;; is what we know online shoppers are wanting.
The Customer; their circumstances and what is impacting their behaviours
Promotional Activity; to achieve conversions
Non Selling Strategy; enticing your shoppers without the use of discounting
Other Key Business Areas; where else should you be putting your energy this peak season?
Key Facts from Shopify
Let’s begin by looking at key facts released from Shopify in recent months.
Projections indicate a significant surge in consumer spending for Black Friday and Cyber Monday 2024, with an estimated $9.3 billion to be spent across these two days. This shows a 24% increase from the previous year's figures.
These projections are echoed by the promising performance of Prime Day in July 2024, which saw a 10% year-over-year increase, signalling strong consumer confidence and a heightened responsiveness to promotional offers.
However, this optimistic perspective is counteracted by the expectation that 70% of consumers will adopt cost-saving measures over the next six months as they navigate the ongoing cost of living crisis. Not surprisingly, there's a notable trend towards sustainable consumption, with consumers willing to pay a premium of 9.7% for products that are sustainably sourced and produced.
1. Shopper Wishlist Trends;
Personalisation;
In the realm of gifting, personalisation is set to play a pivotal role. Consumers are willing to spend, but they're increasingly aware of where they allocate their funds. There's a strong emphasis on ensuring gift recipients have an exceptional and memorable experience, reflecting a shift towards more thoughtful and curated gift-giving practices whether that is personalised, bespoke or unique gifting bundles.
Seamless Shopping Experiences;
The shopping experience itself is under scrutiny, with consumers expressing a clear preference for seamless interactions across all touch points. This desire for frictionless shopping extends from browsing to purchasing and beyond. Recognising the stresses associated with peak/Christmas shopping, consumers are allocating more time to research and compare options. They're seeking shopping experiences that facilitate easy navigation, comprehensive product information, and smooth transitions between browsing and buying.
Multiple and Flexible Payment Options;
Payment flexibility has emerged as a critical factor in consumer decision-making. Retailers have the potential to boost their sales by up to 40% by offering a diverse array of payment options. Popular choices include "buy now, pay later" schemes, instalment plans, and digital wallet solutions like Apple Pay and Shop Pay. This flexibility is particularly appealing to customers who wish to spread the cost of their purchases, allowing them to manage their Christmas spending more effectively and potentially afford higher-value items.
Process Transparency
Transparency in inventory management and shipping processes has become a non-negotiable expectation for consumers. They demand real-time visibility into stock levels, the availability of next-day delivery options, and communicated hassle-free return policies. These factors play a crucial role in building trust and influencing final purchase decisions, as consumers seek to minimise uncertainty and potential disappointments in their shopping experiences.
Social Media Influence;
While there's been a perceived decline in social media's influence on consumer behaviour, the reality is it’s a platform with a lot of persuasive power. A significant 65% of consumers report that they will turn to social media platforms to inform and enhance their purchase decisions during the Christmas season. User-generated content (UGC) continues to hold substantial sway, with many shoppers relying on authentic reviews, unboxing videos, and real-life product demonstrations to guide their choices and ultimately drive conversions.
Mobile Shopping;
The shift towards mobile shopping is accelerating, as seen by the fact that 50% of all sales during Black Friday and Cyber Monday 2023 were completed on mobile devices. This trend is expected to gain even more momentum in the coming year, underscoring the critical importance of optimising mobile shopping experiences and ensuring that all aspects of the customer journey are seamlessly accessible on smartphones and tablets.
Delivery Charges
Optimising delivery costs has become a key strategy for enhancing the overall shopping experience, particularly in the latter part of the year. Retailers are exploring various approaches to achieve this, such as consolidating multiple items into a single parcel, offering in-store pickup options to reduce shipping expenses, and providing detailed tracking information. These initiatives not only help in managing costs but also cater to the consumer's desire for convenience and control over their purchases
2. The Consumer
Customer Challengers
As we delve into the challenges facing consumer spending habits, the continued growth of increasingly value-conscious customers stands out.
Research suggests that shoppers will dedicate up to 70% more time to researching products and services before making purchases this holiday season. In today's competitive retail environment, it's common for consumers to research and compare offerings from multiple retailers before making a purchase decision. It’s been suggested that before the pandemic customer-to-brand touch points were up to 7. Whereas now it’s believed to be closer to 15-20 before a customer commits.To stand out, it's crucial to maintain consistency across all your customer touchpoints while also providing regular opportunities for engagement with your brand.
How can you support this extended research phase by creating easily browsable content?
What steps can you take to streamline the user experience during this crucial exploration period?
What is your mix of social media interactions, targeted email communications, and informative content being shared with the customer?
The goal is to ensure that your brand remains top-of-mind and readily available to customers throughout their research and decision-making process.
New and Loyal Customers
When strategising your approach to customer engagement, it's essential to recognise and cater to two distinct groups: new customers and loyal patrons.
For new customers, the focus should be on creating compelling incentives that encourage initial purchases. Implementing subscription models and loyalty programs can be effective in fostering long-term relationships, and increasing the likelihood of repeat business.
For your existing loyal customer base, the challenge lies in crafting exclusive offers and experiences that motivate early shopping. Consider what unique value propositions you can present that will entice these customers to make purchases now rather than waiting until the final weeks of December.
Customer Lifetime Value
The conversation surrounding consumer engagement is not just about the immediate concerns of Black Friday and Cyber Monday, but extending through the Christmas season and into the early months of 2025.
The primary focus is shifting towards maximising Customer Lifetime Value (CLV). Once you've successfully converted a first-time buyer, the key question becomes:
How can you cultivate a lasting relationship that encourages repeated engagements with your brand?
This strategy extends beyond traditional paid advertising, encompassing a range of tools such as personalised email automation, robust loyalty programs, enticing subscription offers, and the cultivation of online communities centred around your brand or products.
3. Promotional Activity For Increased Conversions
The timing of Black Friday and Cyber Monday in 2024 presents a unique opportunity, falling on the last weekend of November and extending into December. This placement coincides with many consumers' payday and aligns with the psychological shift towards Christmas shopping that often occurs at the start of December. Capitalising on this timing can prove highly profitable, as consumers typically have a shift in mindset to spend, and a need to buy during this period. They are more inclined to make multiple gift purchases from a single brand to maximise savings on both products and shipping costs. As we look ahead to 2024 Q4, let’s look at some of the promotional strategies that have proven effective in previous years.
Flexible Payment (again!)
Not a promotion, but again going back to flexible payment options, the "buy now, pay later" model, showing great results. These flexible payment solutions are credited with increasing average transaction values by up to 50% and reducing cart abandonment rates by 24%. Given these statistics, integrating a range of flexible payment options into your checkout process should be considered a crucial element of your sales strategy. The importance of offering multiple payment options cannot be underestimated, regardless of the specific promotions you choose to run.
Buy One, Get One…
When planning your promotional strategy, consider incorporating "buy one, get one" deals or similar offers. The key is to focus on increasing the average transaction value by providing incentives for purchasing additional items, whether through bundled deals or mix-and-match promotions. This approach not only boosts overall sales but also helps to move slower-selling inventory while encouraging customers to explore a wider range of your product offerings. Bundling slow sellers with popular items will encourage spending (best-sellers) and reduce profit loss (slow sellers)
Tiered Discount “Spend More Save more”
Similar to the above, the "spend more, save more" promotion will again support the increased number of purchases shoppers will make. This tiered discount approach encourages customers to increase their total spend to unlock greater savings.
Timed Discounts
While timed discounts are a popular tactic, I would advise you to approach them with caution, particularly when it comes to full-price items. For timed discounts to be effective, clear communication with your customers is vital. The strategy typically involves gradually reducing the discount throughout the promotional period - for example, starting at 30% off and progressively decreasing to 25%, 20%, and then 15%. The success of this approach hinges on providing customers with ample notice and clear information about how the promotion works. It's crucial to create a sense of urgency without causing frustration; customers need to feel prepared and positioned to make a purchase decision when the time is right.
It's common to see the bulk of revenue generated on the first day of promotional activity. However, it's important to note that these aggressive discount strategies may not be suitable for all product lines, particularly full-price items. Instead, this approach can be particularly effective as a targeted, short-term strategy for clearing out sale items, slow-moving inventory, or end-of-line products.
Gift with Purchase;
Another promotional strategy worth considering is the "gift with purchase" offer. This can be implemented in various ways, such as offering a complimentary gift for all orders placed during the Black Friday weekend or limiting the offer to the first “so many” orders received. This approach not only adds value for the customer but can also serve as an effective tool for inventory management, potentially helping to clear slower-moving stock.
Spotlight Discounts
For businesses with a diverse customer base who may be hesitant to offer across-the-board discounts, daily offers present an attractive alternative by offering a spotlight on specific products at specific times throughout the calendar. This strategy keeps customers engaged and encourages repeat visits to your platform, while also allowing for more targeted promotions tailored to specific customer segments or product categories.
4. The Non-Selling Strategy
It's important to acknowledge that not all brands will want to participate in traditional promotional or discount activities during the Black Friday and Cyber Monday period, and that's perfectly acceptable. However, it is strongly recommended you maintain some form of marketing presence throughout the weekend. The primary reason for this is the significantly increased levels of online browsing activity across various platforms during this time. Failing to capitalise on this surge in potential customer engagement could represent a missed opportunity for your brand.
For brands that prefer to avoid discount-based promotions, several alternative strategies can align more closely with their brand values while still capitalising on the increased consumer activity.
Close Your Store - (no, really!)
A somewhat unconventional approach is to consider closing your online store for Black Friday. This strategy, if employed, should be limited to Black Friday only and not extended to Cyber Monday. The idea here is to encourage your customers to engage in alternative activities that align with your brand values. This could involve promoting recreational activities, encouraging quality time with family and friends, advocating for outdoor experiences, or suggesting creative alternatives. If you feel very strongly about not only the lack of discounts but also overconsumption - this could be very wise and powerful.
Make Donations Instead
Another approach that can resonate well with socially conscious consumers is to encourage charitable donations, instead of shopping. You might suggest that customers donate the money they would have spent on Black Friday deals to a worthy cause. Alternatively, you could pledge to donate a percentage of your Black Friday and Cyber Monday sales to charity, allowing customers to support a good cause through their purchases.
Product Marketing Thought BFCM With Out Discounts
It's entirely possible to create a sense of exclusivity and drive sales during the Black Friday and Cyber Monday period without resorting to discounts.
This can be achieved through the strategic release of exclusive products or by creating a sense of limited availability. For instance, you could inform your customers in advance that you'll be launching a new collection, introducing a limited-edition line, or bringing back popular items from past seasons specifically for this weekend. The key is to provide a compelling reason for customers to shop with you during this period. While it doesn't need to be discount-driven, it should create a sense of urgency, perhaps by emphasising that these special items will only be available for a limited time or in limited quantities.
Treating Those Who Are Loyal To Your Brand
When considering your strategy for the Black Friday and Cyber Monday weekend, it's crucial not to overlook your top spending customers. These top-tier shoppers (often only 20% of customers) contribute to the larger part of a brand's annual revenue, so it's essential to make them feel valued and part of an exclusive community.
Consider how you can celebrate and reward their loyalty during this peak shopping period.
This could involve offering them exclusive perks such as preferential shipping rates, early access to new products or collections, invitations to exclusive virtual events where they get a sneak peek at upcoming releases, or enhanced loyalty point earnings for purchases made during the promotional period.
The goal is to create a sense of exclusivity and appreciation that reinforces their connection to your brand.
Making Things A Little Special - (working on that CLV)
In an era where consumers are likely to receive multiple orders during the holiday season, it's important to consider how your brand can stand out and create a memorable unboxing experience. Implementing "surprise and delight" strategies doesn't necessarily require elaborate or expensive gestures.
Simple touches can make a significant impact, such as including an unexpected gift (perhaps from slow-moving inventory or sale items).
Offering complimentary gift-wrapping services at checkout
For businesses with physical locations, providing local hand-delivery services.
Even small gestures including personalised, handwritten notes can create a lasting positive impression and foster customer loyalty.
As you plan your strategy for Black Friday, Cyber Monday, and the broader autumn/winter peak season, it's important to consider a diverse range of promotional activities and approaches. The key is to align these initiatives with your brand values, customer expectations, and business objectives to create a cohesive and effective campaign.
5. What Else Should You Be Considering
Beyond the realm of promotional activities, several critical operational aspects demand your attention as you prepare for the Christmas shopping season.
Planning, planning, planning and more planning.
First and foremost is the need for meticulous planning of both inventory and sales projections. It's essential to set realistic targets based on a thorough analysis of historical data, market trends, and your current business position. Accurate forecasting is crucial not only for meeting customer demand but also for optimising your supply chain and avoiding overstock situations. Additionally, it's important to establish clear metrics for measuring the success of your various initiatives and to conduct post-event analysis to identify what strategies were most effective and where there's room for improvement in future campaigns.
Email Automation;
Another key area of focus should be your email automation systems, particularly in light of the anticipated increase in customer activity during this period. Whether customers are making purchases or signing up to receive exclusive discounts, it's crucial that all of your automated email sequences are up-to-date, on-brand, and specifically tailored to your Black Friday Cyber Monday and Christmas messaging.
This includes a welcome series for new customer acquisition (whether through organic sign-ups or incentivised registrations), post-purchase sequences, abandoned cart recovery emails, and even win-back campaigns that may come into play later in the year.
Every touchpoint in these automated sequences should align seamlessly with your content strategy and reflect the current season. It's important to review all existing automation to ensure that no outdated content inadvertently makes its way to customers during this critical period.
Check Out Experience - (I know, again!)
The checkout process has become a critical focal point in e-commerce strategy, with consumers demanding both a variety of payment options and a seamless overall experience. Understanding the reasons behind cart abandonment can help in optimising this crucial stage of the customer journey.
For instance, a significant 73% of shoppers will abandon their transaction if shipping costs are not communicated upfront or if they're forced to create an account to complete their purchase.
Other major deterrents include a lack of trust in the company's handling of credit card information, concerns about the legitimacy of the brand or website, inadequate or unclear return policies, and insufficient information about shipping and tracking.
One effective strategy to boost sales and increase average order value is to offer free shipping, either as a standard service or for orders above a certain threshold. Research suggests that 48% of consumers are willing to add more items to their cart to qualify for free shipping, potentially increasing transaction values by 20-22%. By incorporating shipping costs into your pricing strategy or offering free delivery on orders over a specific amount, you can leverage this consumer behaviour to drive higher sales volumes.
Building trust throughout the payment process is paramount in today's e-commerce landscape. This involves offering a range of locally preferred payment options, such as Shop Pay and Apple Pay, which can help customers feel more secure in their transactions.
Additionally, providing the ability to shop in local currencies and offering dynamic payment options not just at the final checkout stage but also on product pages can significantly enhance the shopping experience and boost conversion rates.
By prioritising transparency, security, and convenience in your payment process, you can create a more trustworthy and user-friendly shopping environment that encourages customers to complete their purchases with confidence.
6. In Review
The landscape for Black Friday and Cyber Monday 2024 is shaping up to be distinctly different from previous years, largely due to heightened consumer sensitivity around pricing in the current economic climate. The timing of Black Friday, falling on a weekend that extends into December, presents a unique opportunity to maximise sales and engagement. While there's often concern that Black Friday and Cyber Monday promotions can cannibalise Christmas sales later in the season, it may be more productive to view this as part of a holistic strategy spanning from early October through the end of December. The focus should be on achieving overall sales targets for the quarter, regardless of whether those sales are concentrated during the Black Friday weekend or spread more evenly throughout the holiday season. The key is to be present and ready to serve customers whenever they are in a shopping mindset.