Black Friday 2016 - it’s a wrap! Top 5 things we did right
Every year we see the peak period in ecommerce (Black Friday/Cyber Monday) becoming a bigger and bigger phenomena in retail sales. Each year we try to anticipate what retailers online will do in terms of online sales during this period, and we never really know until the day how it will all play out. Will their systems survive the torrent of traffic? Will customers find their offerings compelling enough? Here are some observations from my viewpoint watching peak from the Salmon Peak Operations room, and a video interview I did with IBM at the Watson conference.
#1 - Customers like all day sales. In previous years we had seen retailers go with the midnight sale on Black Friday. This year we saw a lot more of the "non-start time specific" sales - so instead of going live with a sale at 00:01 on Friday we saw the sales spread over a whole day period, or multi day period. This is good from a systems point of view, as we saw the load balanced out across a 24 or 48 hour period, ensuring the customer experience was relatively good at all times, instead of dropping off when a deluge of traffic came in at midnight. This is also good for consumers, who don't want to be "stressed" about having to get in at a specific time to get a sale deal.
#2 - It's not all about Black Friday anymore. As expected sales began earlier - some starting on Wednesday or Thursday of Black Friday week. Some even went with specific sale days the week before Black Friday, and had good sales numbers. Cyber Monday was robust, but as a phenomena I think by the time Monday comes the peak of the buying activity has come and gone, so my guidance would be to have multi day sales starting around, but biased to the lead up to, Black Friday to get the most eyeballs.
#3 - Cloud providers and services did a better job this year. Last year we saw breakages in a number of payment and content providers used by ecommerce customers. This year was much better in terms of reliability and response time. We still saw high response times on certain payment providers, which can cause issues with customers waiting (or timing out) in the checkout process, but overall the additional awareness of peak and scaling to support it was better.
#4 - Back end systems are still the soft spot. In previous posts we spoke about ensuring that order fulfilment and customer notification systems were stress tested enough to understand how quickly they could process the flood of orders they would be getting. We feel there is still room to improve in this area next year - it seems the emphasis on testing a website is still there, but testing how the back end systems respond to that level of traffic and orders could do with additional study. Our goal is to know factually what will happen when those systems get hammered, not think we know, and this remains a focus area for ecommerce systems.
#5 - International buying is expanding. One effect of Brexit was a significant devaluation in the GBP currency. As a result we saw a large increase in international purchasing from UK merchants, as the relative cost of these goods had gone down by 20% to overseas purchasers. No doubt inflation will rectify that somewhat next year, but year on year international sales were up across the board. While countries may turn away from globalisation, it's obvious consumers aren't doing that in their purchase patterns.
One data item I don't have access to that I wish I did was profit margins from this peak period. It feels to me like retailers reduced the top line revenue from Black Friday sales, holding back on full catalog sales and price slashing to retain some margin for their businesses. If so, I think this is a good thing for everyone, as it will sustain the peak shopping period for years to come, instead of a "boom and bust" cycle where more retailers (and consumers) opt out. While it can be argued that peak is bad for the environment and people buying on credit beyond their means, we've also wrapped up a lot of joy for people around the holidays and given them a chance to grab items that they might want but otherwise been unable or unwilling to buy.
For more information download John's Whitepaper - Peak 2016 presents a fresh perspective, grounded in analysis and insight sourced from – and in conversation with - many of the UK’s leading retailers. Focus areas include:
- Marketing Trends
- The Opportunity for Retailers
- Technical Trends
- New Areas of Fragility
- Checklist for Peak Selling