With just two weeks to go, the available Black Friday 2022 spend from consumers is top of every retailers agenda. How do you extract the maximum revenue from customer with a cost of living crisis limiting their spending power.
Orla Power of Luzern Ecommerce emphasises that getting your assortment and execution right is imperative to maximise consumer’s Black Friday 2022 spend. Revenue is always a top priority, but margins shouldn’t be sacrificed for turnover:
Ecommerce brands and retailers are already witnessing the impacts on buyer behaviours as consumers shop around for less expensive alternatives and switch down to cheaper brands.
Having the right product mix to maximise sales is essential around the Black Friday / Cyber Monday period, which is why it is important to have your assortment strategy and inventory management processes managed correctly. Getting that “messy execution” end of ecommerce right is crucial when ensuring a seamless online shopping experience for customers and customer satisfaction. Most organisations, however, even the big guys, simply don’t have enough expertise in-house. Working with external experts to do this can bring the agility and expert knowledge required to handle an agile go-to-market strategy that ensures customer satisfaction whilst ensuring that online sales remain profitable. Brands and retailers need this to ensure there is no “race to the bottom” pricing that can quickly erode profitability.
In my opinion, it’s vital to resist the temptation to push online sales at the expense of margins. Instead, look at increasing average order value (AoV) through launching new product variants or bundles either with your own products or with another complementary brand. A good example of this done well is BiC, a French manufacturing company that sells pens, bundles its items into packs, enabling them to sell at a higher price point and protects margin.– Orla Power, Marketing Director at Luzern Ecommerce
Similarly Dan Edelman at American Express suggests retailers focussing on the value proposition to attract consumer’s Black Friday 2022 spend. There is some good news, despite pressures on budgets, nearly half of shoppers plan on spending the same as in previous years this Christmas… and shoppers are aware that small businesses face the same pressures and are keen to support them so long as their proposition offers value.
As ever, sales and promotional events like Black Friday will be firmly on consumers’ radars this year. People will always want to make the holiday season special, but the prevailing economic conditions mean shoppers are laser focused on value and what they spend their money on. Recent American Express research found over a third of UK shoppers plan to make the most of the seasonal sales to get the best deals. Shoppers are budgeting carefully and planning how they make the most of their spend. This means Black Friday will be more important to retailers this year, who are likely to extend their sales events over a longer period rather than squeeze them into just a few days.
What people are buying is also changing; while consumers will always look for a little luxury or ways of treating loved ones, sometimes gifts that people really need or find useful are the most valuable. This certainly appears to be one of the underlying sentiments around gifting this year, with our research finding one in five (21%) shoppers will be gifting ‘essential items’ this Christmas. However, despite cost-of-living pressures, nearly half (48%) of UK shoppers said they plan to spend the same this Christmas as they did last year – meaning there remains plenty of opportunity for retailers.
There is also room for all sizes of retailers with our research finding that consumer sentiment toward shopping with small businesses remains strong, reinforcing the unique appeal they hold with shoppers. More than three-quarters (77%) believe it’s more important than ever to support small businesses this holiday season and seven in 10 people (72%) prefer to shop small to find personalised and unique gifts – offering reasons for small business positivity despite their well-publicised challenges.– Dan Edelman, Vice President & UK General Manager, Merchant Services, American Express