The wasted potential of Black Friday – How retailers could be missing out this BF?

Jarno Marin

Black Friday shopping

 
All the buzz in the retail news is currently around Black Friday (BF) and most of the commentators are hotly debating whether the footfall will be up or down. The study we did last year showed the importance of BF both in terms of achieving a big uplift on footfall and as the day that really kicks off the Christmas season shopping period. Similar results were seen in 2015 and likely this year too. The study also gave some indication of the importance of Black Friday in attracting new customers.
 
As trying to estimate the year-to-year increase (or decrease) is not very actionable for retailers, we decided to look at the BF from slightly different angle and drill deeper into the potential of new customers during and after BF. But to get a bit more background to the increases in the amount of new customers, it is good to look first into the overall footfall patterns.


Why Black Friday is the perfect time for attracting new visitors

When we compared BF 2015 (27.11.2015) to the average of earlier days of the second half of the year (H2/2015) over the UK stores we had in our focus group (including major electronic, fashion and grocery stores), we saw +57% increase in footfall. Interestingly enough, the next Saturday (28.11.) saw an even bigger increase of +83% in footfall.
 
Now let’s just look at the Fridays –  the increase in footfall for UK stores overall was +49%. Breaking this down by retail vertical we saw +56% increase over the fashion stores (71% of the stores had statistically significant increase) and +209% increase in electronics stores. However, across the grocery the change in footfall was slightly negative with a drop of -2%. But all in all we can conclude that once again the Black Friday had hugely positive effect in high street, shopping centre and retail park footfall, so no surprises there.
 
If we just highlight brand new customers (never been seen before) on BF vs. the Fridays during the earlier half of the year, we saw +39% increase over the UK stores with +54% increase in fashion stores and +158% in electronic stores. This shows that the additional footfall that came to the stores was pretty much even between new and recurring customers. It also highlights the fact that BF hype and offers do a great job of attracting new visitors.
 
To further support this fact, for 43% of the UK fashion stores it was the Friday with most new customers over the second half of the year so far. It was also the most common “number one Friday at attracting new customers”. Furthermore, the same applies to Fri-Sat as a combined period against other Fri-Sat combined period of that half of the year.
 
To summarise, BF is truly the best time for encountering and engaging new customers before the Christmas period. Yet, we had a sneaking feeling that this huge potential of new customers isn’t being capitalised on as well as it should or could be.

 

So how often are Black Friday customers coming back to your store during the main Christmas shopping period?

 
To better understand how well the retailers were able to engage Black Friday visitors and turn them into loyal ones for the most important shopping period of the year, we looked at the amount of customers returning to each store during the rest of this main Christmas shopping period (i.e. 3 weeks before Christmas).
 
Overall, UK stores were able to get 20% of the customers back for the Christmas period, but only 9% of the new visitors during the BF. That’s 11 percentage points less than for all customers and in effect less than one in every ten new customers return to a store during the Christmas period. For the Fri-Sat period the situation was slightly better with 10 percentage point drop between all and new customers (19% and 9% returning respectively). Whether this lack of returning customers is a good or a bad thing is up for debate - it could be that the customers were satisfied on their first visit, got what they needed and didn’t have to make a return visit, or conversely they had such a bad experience they just didn’t return!
 
For UK fashion stores the amount of BF visitors returning during the main Christmas period was only 8% for all the customers and 5% for the new customers. This means 95% of the new customers gained around Black Friday were not seen in the store again during the Christmas period. Imagine the impact on sales if they could persuade just another 5% of these first time customers to return?
 
The UK electronics stores had roughly the twice the return rates of the UK fashion stores (16% out of all customers returning and 10% of new customers). On the other hand, in UK Grocery stores 60% of all and 24% of the new customers were returning for the Christmas period, as we’d absolutely expect as people always need to eat, especially over Christmas! 
 
These numbers confirmed our worry about how well the potential of new customers is currently handled, which highlights these two important insights from Black Friday:

    •    Black Friday is a phenomenal opportunity to serve and gain many customers, especially the new ones, during the Christmas period
    •    Retailers need to find ways to improve the engagement of the new customers during Black Friday in order to truly benefit from this huge potential
 

Side note about the rest of the Europe:

As Black Friday seems to be more popular in the UK than rest of the Europe, that was our primary focus for this analysis. However, it’s Christmas soon and we feel in a giving mood, here’s a quick take on the rest of Europe. For the focus stores we had over the rest of the Europe (electronics, fashion and grocery stores and malls) showed “only“ +13% increase in footfall when comparing the BF to other Fridays before it during the second half of the year. Many of the stores also had a decrease in footfall during the BF, perhaps highlighting the raise of online shopping in these territories. Also, the average change in the new customers was -14%, showing that the effects of Black Friday are somewhat different compared to UK.
 
However, the problem of getting the Black Friday visitors returning during the Christmas period was pretty much the same in these stores. As an example, a Finnish mall had 58% of all customers from BF returning during the main Christmas shopping period, but only 26% of the new visitors (-32 percentage points difference!).
 

Contact us now if you would like to hear more about:

    •    how to measure loyalty (e.g. using retention)
    •    how to improve engagement and loyalty
    •    what are the other good events/weekends for attracting new customers

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Walkbase provides a retail analytics solution for improving the impact of marketing on physical stores and personalising in-store shopping experience.

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