This year, Black Friday falls on the 29th November with Cyber Monday following on the 2nd December. In this article, we:
- Review how sales revenues for brands and retailers are affected in the run-up to Black Friday and Cyber Monday and how that might feed through to 2024.
- Explore which omnichannel consumer touchpoints brands can use to maximise sales.
- Forecast this year’s trends, ranging from who will spend the most to how consumers will pay for goods and services.
Revenues in the weeks up to Black Friday and Cyber Monday
Black Friday has been a game-changer for retailers. Ever since its emergence in the U.S. and its later spread around the world, retailers have been keen to extend Black Friday’s impact. First, Black Friday became a weekend tail-ended by Cyber Monday. Today, that weekend is the finishing line of a prolonged discounting period that now often stretches all the way back to the start of October.
This has somewhat diluted the uniqueness of Black Friday but retailers benefit from this longer sales cycle. Revenues are now higher in October as consumers begin shopping for bargains earlier, in anticipation of a discount. McKinsey data found that 56% of consumers began holiday shopping in October 2023, up 50% from the previous year.
This gets more intense in November in the run up to Black Friday itself. For example, online retailer revenues in November 2022 were 304% higher than in October. Research from The Drum in 2021 found that order volumes doubled in the week running up to Black Friday.
Luxury brands have, of course, traditionally treated Black Friday discounting differently to mass and mid-market brands. Instead of cutting prices, many prefer to offer exclusive experiences or time-limited offers to generate additional revenues.
However, recent economic trends are challenging this approach for some brands. Earnest Analytics credit card data from 2023 suggested that these consumers had reduced their spending on expensive items in response to tougher economic circumstances. In the first week of November 2023, there was a 21% fall in online and in-store luxury apparel sales compared to a drop of 8% in general apparel.
This decline may have prompted some luxury manufacturers and retailers to discount - in the 2023 Black Friday period, brands like SSENSE offered 50% discounts and Tory Burch 40% discounts.
The impact of these discounts appears to have been significant. Adobe Analytics found, as reported in Fashion Dive, that online apparel sales jumped 136% year on year on Black Friday and 154% on the following two days. This suggests that shoppers were waiting for the larger discounts to appear before making a purchase.
Although wages are going up faster than the falling rate of inflation, aspirational consumers will probably still feel the pinch this year. For these consumers, discounting may be one approach to drive revenue and shift inventory.
However, for luxury brands wanting to maximise Black Friday revenues without discounting, research indicates that you'll do well by focusing more on the in-person experience more than online discounting.
Omnichannel and consumer touchpoints for Black Friday 2024
Across both retail and online, the following strategies were successful in 2023 and may become more important this year:
- Omnichannel marketing campaigns: Reach customers across multiple touchpoints including print media, in-store promotions, social media, email and via your website. Create a cohesive look and narrative to let customers know what to expect in terms of any Black Friday offers and incentives you’ll provide.
- Limited-time offers: Although we’ve seen that revenues jump particularly on Black Friday Weekend, consider launching limited-time promotions in the run-up as well. The offers you run could be flash sales on a particular range of pieces or hourly deals on limited-edition items or stock you wish to clear. This will generate excitement and trigger FOMO vibes among your target consumers.
In a recent poll conducted by Croud on LinkedIn, limited-time offers emerged as the most compelling Black Friday strategy, with 82% of voters selecting it. Flexible payment options trailed significantly, coming in a distant second.
- Flexible payment options: To make your products more affordable, consider offering Buy Now Pay Later (BNPL) at your checkout. For high-ticket items, consider partnering with a personal finance company. On selling pages, juxtapose these easy payment options with a reminder of the inherent value and exclusivity these products offer.
- Sustainability initiatives: Gen Z and millennials often cite sustainability as a key driver on how they favour brands. Consider launching a “Green Friday” collection featuring items made from ethically sourced or upcycled materials. If you partner with any charities, consider donating a proportion of the sale price to further incentivise ethically-minded consumers. If you do, let visitors know about it.
- Luxury loyalty program integration: If you run a loyalty program, one way to encourage high net worth customers to buy from you during Black Friday season is to offer enhanced points based on purchases they’ve made. They could redeem these points in the form of future discounts, early access to new product ranges, or on a unique Black Friday experience.
Audience predictions for Black Friday 2024
In 2023, Gen Z and millennials were expected to be the big spenders and this proved to be the case. In 2024, we shouldn’t expect much that’s different.
However, brands should beware. While Black Friday represents a great opportunity to win new businesses, 60% of Gen Z reported that they regretted their purchases. To build customer loyalty, brands should examine the reasons behind that dissatisfaction and address it in their promotions.
In 2023, social media achieved five times the level of traffic compared to digital and email advertising. Its importance in raising brand awareness is significant but be wary of investing too much into it as it only accounted for 3.5% of sales in 2023, compared with 29.4% for paid search and 15.3% for email.
Analysts expect to see another rise in the use of digital wallets and BNPL over the Black Friday season in 2024. For luxury retailers that lack a BNPL option, this may boost sales during the period; however processing costs are generally around double the cost of credit cards.
Finally, the importance of generative AI in providing product recommendations, targeted offers, and conversational interactions is expected to increase. According to Salesforce, AI influenced $51 billion in global sales during 2023’s Black Friday period.
Conclusion
As Black Friday 2024 approaches, brands and luxury brands alike face both challenges and opportunities. While the economic squeeze may push some towards discounting, others can still capitalise on this period by leveraging omnichannel touchpoints, and offering flexible payment options. By focusing on sustainability initiatives and integrating loyalty programs, brands can appeal to the values and spending habits of key demographics like Gen Z and millennials.
To maximise your brand’s success this Black Friday, Croud is here to help you navigate the evolving landscape. Contact us today to start planning your winning Black Friday campaign!
