Why am I already seeing Black Friday deals?
Unraveling our shifting holiday shopping behavior
Welcome to my new subscribers who have tuned in since Curious Commerce relaunched a few weeks ago. I’m having an absolute blast writing here again and I’m so happy to have you with me. In the coming weeks I’ll share a proper introduction on me and why I decided to start this newsletter. As always, feel free to reach out with any questions, observations, or just to say hi!
Now on to the good stuff…
I love the holiday season. I put my Christmas tree up immediately after Halloween (no judgment please), host a festive holiday party, and contribute to Mariah Carey’s net worth by streaming All I Want for Christmas is You several hundred times per year.
In my professional life, I spend a large portion of the year planning for BFCM - Black Friday/Cyber Monday. Traditionally, in this one roughly week-long period, many brands and retailers do 25-50%+ of their annual sales in the US. A site bug, point-of-sale issue, or promotional misstep can cost a company millions. Last year, consumers spent $9.8B on Black Friday alone. Put simply, it’s a big deal.
Before online shopping was a thing, people would line up before the malls opened on the day after Thanksgiving (Black Friday) to get access to the best deals. Every year, the local news would run stories of fights breaking out over flat screen TVs and other chaos ensuing on this date. Today, a solid chunk of that spend (~26% according to Forrester) has moved online (fun fact - last year, the majority of this spend was on mobile for the first time). But the chaos remains - sites are overloaded with traffic, customer service teams are pulling all-nighters, and warehouse teams are working overtime to keep up with demand.
Holiday Deals are Moving Earlier
One thing I’ve noticed over the past few years is that these deals seem to be popping up in my inbox earlier and earlier. Just recently, I shopped a Black Friday preview sale at J.Crew on November 9 - nearly 3 weeks before the day itself. So why are brands following my lead and starting the holiday celebrations right after Halloween?
Data gathering and meeting sales targets
I’m starting here because as a data person, I think this is the most interesting driver for promoting early.
Brands have sales targets for each day - and sometimes hour - on these major shopping days, which roll up to weekly, monthly, and quarterly goals. Moving a few promotion days earlier in the season serves as an experiment to see whether you’re achieving the conversion and demand to reach your goal. Going back to the J.Crew example - several categories, including cashmere, were excluded from the Preview promotion last weekend, meaning they were still selling for full price. If J.Crew feels that their Black Friday preview underperformed, these categories might be discounted for Black Friday. Similarly, if sales were softer than expected, they can increase the discount depth of certain items or add an additional promotion day later in the month. Online, it’s seamless for brands to update pricing and promotions on a near-instant basis. This is unlike physical retail, in which signage and tagging need to be printed in advance (though there are some tech solutions to avoid this). It’s increasingly common to see early promotions to test the waters - either to all customers, or to a subset, like loyalty members.
Related to meeting plan, brands have ordered product from manufacturers many weeks ago to sell now, during the holidays. Moving the promotions earlier can give crucial insight on where there may be excess product or where things are likely to sell out. To take a simple example, if J.Crew sees that a bunch of red sweaters sold in NYC during their Preview, but only a few sold in Dallas, they could move the inventory to NYC ahead of Black Friday so they could be sure to capture those sales. For online sales, they can get the ball rolling on replenishment for items that seem likely to sell out so wait times will not be as long for a restock. They can also make merchandising and marketing decisions with a clearer picture of availability in mind - e.g. putting redirects in place for a hero item that is about to sell out to drive to similar products; updating marketing images if they include sold out items.
Demand smoothing and cost reduction
This data from Cloudfare shows how spiky site traffic and customer demand is during November. Moving promotions earlier helps smooth these peaks - reducing the pressure on a website’s infrastructure and company’s operations at the busiest times. Just a small shift in traffic from Black Friday to an earlier date can be the difference in keeping a site running effectively vs. crashing (the worst case scenario). There are also cost savings benefits in areas like customer service, warehouse staffing, store staffing, etc.
For more information on retail math and KPIs, check out my retail KPI explainer.
Following the leaders: Singles Day and Prime Day
Originating in China in the 1990s, Singles Day (November 11, or 11/11) started as a unofficial holiday to celebrate singledom with self-gifting and friends. In 2009, it morphed into something much bigger when Alibaba tapped into the holiday to offer a 24-hour mega promotion. This first year, the day generated $7M in revenue - a solid start. By 2022, sales ballooned to $157B worldwide on 11/11, making this the single biggest shopping day on Earth, dwarfing the USA’s cute lil $10B Black Friday haul. Not to be outdone, Amazon jumped into the arena with Prime Day in 2015 to celebrate the company’s 20 year birthday. Typically in June or July, the event offers promotional deals to Prime members and drives billions in sales. In recent years, Amazon has also hosted “Prime Deal Days” in October, tapping into back-to-school and early holiday shopping occasions. These promotional days aren’t just on Amazon or Alibaba. In the interest of capturing eyeballs on these significant shopping days - when consumers are primed to be online and clicking away - many brands have jumped on board to offer competitive promotions as well. In just the last decade, the landscape of holiday shopping has fundamentally changed. These other, large shopping moments have leapfrogged Black Friday and pulled both brands and consumers into the holiday shopping mode earlier.
Calendar Timing
About 70% of spend over Black Friday is for gifts. Brands need time to fulfill those orders and get them to customers well ahead of Christmas and other holidays. This year, Thanksgiving, and hence BFCM, fall later in the year, reaching into December. This shortens the shopping period and further compresses a period of time when carriers are overloaded with shipping volume and facing delays. In order to give shoppers a bit more time to consider and purchase gifts, starting the deals early could make sense.
Competitive positioning
Any decision to promote is made in the context of what one’s competitors are doing. Going earlier gives brands the chance to capture shoppers sooner, when their wallets are still full and their eyes are not yet glazed over from marketing content. It’s likely that brands are looking at when their competitive set started offering deals last year and is using that as an input into their own planning for this year.
How do I know I’m getting the best offer?
As a shopper, one nice thing about the “old school” version of Black Friday is that I felt confident the deals were the best I was going to get. Now, there is a lot of faux urgency - Prime Day in October! Black Friday Preview! Black Friday Early Access! Cyber Monday! Last Chance! How can I know when I’ll actually get the best deal? As a data-oriented person, a few thoughts:
Look at how discounts compare to historical averages
Last year, BFCM discounts were on average ~30%, with categories like apparel and toys offering the deepest discounts. If there’s a product you love listed at 50% off, it’s likely on the more competitive end.
Consider if something is really going to sell out
For brands, selling out of a product is a bad thing. Sure, it can drive a sense of exclusivity, but in the near-term, it is a lost sale. Most customers will look for that item on a different retailers site, or look for something similar from a competitor. A few years ago, supply chain challenges during and post-pandemic led to lots of out-of-stocks during the holidays, driving very real urgency to get our hands on the hottest gifts. Today, I think we will see a lot less of that as brands have had plenty of time to stock up on their big holiday items.
Happy Shopping!
ICYMI…
