According to US-based National Retail Federation, 30% of annual retail sales happen between the end of November and Christmas, a festive period which is kicked off by Black Friday – the busiest shopping day of the year.
In 2017, nearly three in four US adults shopped either online or in person over the Black Friday weekend, spending an average of $335. Black Friday's significance in the US market and further afield means it is an opportunity no retail company, large or small, US-based or not, can afford to miss out on. The huge boost to a company's finances, as well as to its reputation among consumers, can either make or break the holiday period for retail firms.
It is also at a particularly well-placed time this year, with the lows in the stock market seeing tech giant's losing billions from their value. On November 13, the S&OP 500, which primarily consists of companies operating in retail and e-commerce, closed at 2% lower than the start of day. The success of Black Friday is sorely needed for a number of retail giants, so a strong strategy for the "holiday" has never been more key.
With this in mind, Innovation Enterprise looks at some of the most successful Black Friday strategies from four of the world's biggest retail heavyweights.
You could not discuss a dominating retail strategy without mentioning Amazon. The e-commerce colossus was founded in 1994 and recently became the world's second company to reach a trillion-dollar valuation due to its incredibly successful, disruptive and efficient strategy that has seen its founder Jeff Bezos crowned the richest man on the planet.
And it has managed to get Black Friday down to a "T". Of the top 50 retailers in the US, Amazon captured nearly 55%, more than half, of all transactions on Black Friday in 2017, according to Hitwise.
It achieves these dramatic numbers by stretching out Black Friday by starting it early – very early – and building up excitement throughout the month by adding more and more unmissable deals.
Starting early is key to the success of any retailer's Black Friday strategy as, according to eMarketer, many customers begin their holiday shopping, or at least begin researching, as early as October. Amazon runs its pre-Black Friday and Black Friday deals throughout November, and this year will be running deals of the day every day from November 16 to November 25, ensuring a constant cash injection throughout the latter end of the month.
Its strategy does not end when Black Friday ends either. Amazon has been one of the key drivers of Cyber Monday, a day which further stretches out the holiday, and the incredible deals it delivers on that day also saw it responsible for a staggering 60% of all online transactions on that day last year, according to TechRadar.
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Founded in 2002 under the name CSN stores and rebranded in 2011, Wayfair is one of the largest online-only home goods retailers in the world, with 36 million active customers and a revenue of $4.72bn in 2017.
Like Amazon, Wayfair has extended its Black Friday holiday deals throughout the month but debuts the best deals of up to 80% off on the Black Friday weekend.
However, earlier this year, Wayfair took the discount holiday craze into its own hands by debuting its own holiday, "Way Day", on April 25. This began at midnight and offered discounted items for around 70,000 items for 24 hours only. Wayfair's approach of creating its own "retail holiday" means it creates a day which resembles buzz and mass shopping of Black Friday, but without the high levels of competition on the day. This is a method borrowed from – you guessed it – Amazon and its Prime Day in July.
Walmart is the largest brick-and-mortar retail corporation of discount departments and warehouse stores, with global net sales of more than $481bn, and it is a name that is synonymous with the excesses of the Black Friday holiday (many of the images used to portray the day in the media often feature a crowded Walmart cashier). As the retail world becomes increasingly digitized, driving customers to brick-and-mortar shops becomes more difficult. A survey from BlackFriday.com found that of the 1,500 adults polled, 68% intended to do their Black Friday shopping online. Years of overcrowded, stressful in-store shopping experiences have driven many consumers to shop from the comfort of their own homes.
This means that traditional brick-and-mortar shops have to come up with inventive ways to attract people to their stores. This year, Walmart has announced it will be kicking off the "holiday" early with wholesome in-store parties that start two hours before the official 6pm Black Friday kick off on Thanksgiving Day. The party will involve free cookies and coffee so people have a chance to browse the shop and prepare for the onslaught. The idea being that if people are already in the store for the event, they are more likely to purchase something.
Additionally, Walmart has a plan for its online sales as well. As detailed in Walmart's Black Friday ad, it will follow in Amazon's footsteps and start its Black Friday online sale early, at 10pm on November 21. It is also offering free two-day shipping on millions of items for orders above $35 in an effort to encourage customers to spend more to reach the threshold.
Founded in 1902 in Minnesota, the Target Corporation is one of the largest US-based discount retailers and, based on sales alone, the third largest in the world. Its revenue in North America in 2017 reached almost $72bn.
Target's Black Friday strategy for enticing shoppers into its brick-and-mortar shops this year is pretty simple: Its opening hours during the weekend are simply incredible. On Thanksgiving Days it will open from 5pm-1am so shoppers can get early access to Black Friday deals. This is despite around 60 retail companies announcing they will not open at all on Thanksgiving. Target evidently hopes to entice shoppers who would otherwise be at competitor stores.
It will then reopen just six hours later at 7am for its official Black Friday sale.
These are the longest hours the store has held operated since it opened its doors on the holiday back in 2011.
Black Friday 2018
With Black Friday just days away, it remains to be seen which strategies pan out to be the most successful and whether shoppers still have the same taste for Black Friday as they have had in previous years. No doubt, Amazon will continue to lead the way with its hyper-streamlined system already in place. However, with unique strategies across the different retailers it will be the most interesting to see whether the winner of Black Friday turns out to be the online or physical shopping experience this year.