Putting the customer first and providing value is crucial to Black-Friday-joy for retailers – By Peter Ludi, Business Development Executive at redPanda Solutions
Black Friday is almost upon us again, just in time to raise the stress levels for everyone involved. Shoppers are in a rush trying to find the deals that offer value, while retailers for their part need to achieve sales numbers in order to satisfy shareholders. To get this right this year, these organisations will need to make the most of their investments into retail technology, while providing consumers with real value and a superior customer experience.
The origin of Black Friday dates back to the 1960s and is rooted in the description by the police of the traffic and chaos in the streets of Philadelphia as crowds came to do their Thanksgiving shopping. Fast forward to today and Black Friday is a global phenomenon, the police have been replaced by IT teams, and the traffic is digital.
This period – and it is a period because lately the strategy has been to offer discounts over the period and reduce the resource load on one specific day – is important as a significant proportion of annual sales occur. One can say that the sales numbers help move retailers into the black so to speak – into profit. Of course, this varies by sector and strategy selected.
The continued growth in online sales locally also played a major role, with retailers focusing on e-commerce and using strategies like personalised marketing and AI-driven recommendations to capture customer interest and drive purchases. In the end, a well-executed Black Friday means new customers, a reduction in excess stock, and a sales volume boost for the fiscal period. For the consumer, it may mean buying goods at reduced prices and being able to save during tough times. That is if their decisions are carefully considered and not driven by impulse.
This year’s Black Friday will be an interesting one, given that the period last year was a bit of a mixed bag, with sales transactions values lower, indicating that local consumers were financially stressed. It is likely that this year will be more of the same unless there is real value being offered to the consumer. If retailers can provide this value, however, there is an opportunity to grow their customer base.
Preparation is key
Either way, retailers will need to prepare for the period. They know that it is coming, and the planning and preparation needs to be foolproof. This high-pressure environment is unfortunately the perfect time to drop the ball with a potential crashed website, pricing errors, running out of stock, or simply not being able to live up to the brand promise.
Retailers will need to have full visibility into where their products are stored, how the orders will be fulfilled, and even stress test third-party dependencies to ensure their readiness. Retailers should test demand forecasting, ensure supply chain reliability and continuity, and have contingency plans in place for the unexpected.
Then, given the large volumes of data that will be created and stored over the period, cybersecurity and risk mitigation becomes a given. As an example, fraud detection should form an integral part of their platform in order to protect both the retailer and the customer. This is crucial as losing customer data can result in liability, lost customers and reputational damage to the brand.
As such, retailers need to be agile, and must be able to monitor and adjust in real-time. Here, it is crucial that retailers have their technology partners on standby to provide support. Staff should also be ready, trained and incentivised to deal with any type of scenario, good or bad. Black Friday is a team game, and partnerships are key to success.
Then, considering the preferences of South African shoppers, retailers will also have to find the balance between online and in-store. Thankfully, the introduction of Cyber Monday means that a focus on online sales can be planned for to a certain extent.
The customer first
I have often wondered why we don’t spend as much time thinking about how to lighten the load on the consumer. The customer has to come first, and an improved customer experience should be a focus for all of the preparation. There must be a way we can encourage loyalty during the year, and then use the Black Friday period as an opportunity to recognise the brand’s most loyal customers and ensure that they don’t get lost in the chaos.
Promotional strategies should be well-targeted coming back to customer first thinking. One area to keep an eye out on this year is how successful (or unsuccessful) retailers are in using AI-driven tools to recommend and drive purchasing. There should also be flexibility in how consumers can receive our goods and perhaps incentives to influence what’s best for the retailer’s existing infrastructure and logistics.
Ultimately, the Black Friday period provides businesses with a great opportunity to make full use of the retail technology that they have at their disposal, and to give digital platforms the needed level of attention. This can include invoking mobile POS and clientele stations on the shop floor, or enabling self-checkout or even Just Walk Out experiences. Investing in techniques such as automated online assistants will help further reduce friction for shoppers.
Once again, retailers need to keep the customer – and customer experience – at the forefront, as failed technology initiatives will just hurt the brand. We are all more familiar with what is needed for a superior online experience – an optimised website, performance, functionality and ease of use should all be there. In fact, what I’m looking forward to is seeing if anyone brings something innovative and over and above the online experience this Black Friday.
Author: Peter Ludi
Marshmallow Treat
South Africa is ranked 62nd overall in the latest edition of the World Economic Forum’s Travel and Competitiveness Report 2013, which surveys 140 countries on their policies to develop the travel and tourism sector. (66th in 2011).