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Black Friday provides clues to Boxing Day outlook for retailers

Written by James Johnson, Director of Retail Industry Strategy at Salesforce

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Retailers looking to maximise Boxing Day sales should look to this year’s Black Friday for clues on important shopper behaviours.

The post-Christmas sales are a local retail institution, responsible for more than $2.5 billion in local sales last year. Yet the adoption of overseas sales efforts such as Black Friday and Cyber Monday meant many in the retail sector feared a negative impact on Boxing Day shopping.

However, new digital retail data from Salesforce suggests retailers can benefit from the lessons provided by the relatively new shopping-occasion newcomers. Salesforce has reviewed transactions from more than 500 million consumers, including those from Australia, over the Black Friday/Cyber Monday shopping period.

Overall the number of online shoppers in Australia increased by 22% and revenue increased by 41% this year across the week-long Black Friday shopping period. This compared to a 36% increase in revenue the year before.

The data found that better mobile strategies, early promotion scheduling and improved shipping all played a strong role in attracting shoppers and are likely to feature strongly again around Christmas.

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Discounting doesn’t (always) deliver

However, one area not as strongly associated with demand was discounting.

Looking at data from 25 November to 2 December, which includes both Black Friday and Cyber Monday, few of days with aggressive discounting corresponded to larger spikes in visitors or sales conversions amongst Australian stores.

Whilst most retailers waited until Cyber Monday to offer the greatest discounts (peaking at 30% off original cost), most shoppers visited sites around a week before despite discounting being up to 5% less than later in the week.

The same can be said for converted visitors, with an increase of around 41% of store visitors making a purchase around 25 November (when discounting was weakest) compared to an increase of just 18% in converted shoppers on Cyber Monday on 1 December when greater bargains could be had.

The lesson here is that retailers need to create and maintain a steady drumbeat of engagement to promote their best deals, new products and exclusive holiday merchandise leading into Boxing Day sales. Discounting alone won’t help.

Make it mobile this Christmas, same with social 

Australian shoppers again turned to their mobile devices and social feeds for inspiration and purchased in record numbers.

Seventy percent of all digital shopping traffic in Australia came from a mobile device, marking yet another groundbreaking day devices. But mobile orders were the real breakout star, as mobile buying reached 56%, compared to 22% growth in converted sales on all platforms.

This is consistent with retailer experiences in other parts of the world and local businesses should expect more of the same going into the holiday period.

The impact of social was less pronounced on the virtual cash register but still important to many online local stores. Whilst much lower in terms of actual sales, it continues to be a growth channel for driving inspiration and product discovery. Even though coming-off a smaller base, encouragingly traffic from social increased 21% and orders driven by social increased 25%.

Don’t overlook delivery and pick-up as an incentive 

Perhaps one of the most interesting lessons from Black Friday for local retailers was around the pull of free delivery and pick-up.

As the Black Friday shopping period progressed, more retailers identified the importance of delivery to consumers.

Early on, around 25 November, free shipping was being offered on around 64% transactions. However this sky-rocketed to 77% of transactions as more local stores began to see its pull.

Salesforce has also found that initiatives such as Click And Collect were highly sought-after by shoppers. In fact the Salesforce Connected Shoppers Report found that 62% of Australian shoppers will purchase a product online for in-store pickup, in part due to concerns about getting gifts in time.

When planning retail businesses should instead should focus on differentiated experiences, rather than just price. Salesforce research has found that services such Click And Collect can have a profound impact on customer trust and the bottom line.

It’s also clear from the data that retailers need to expertly execute mobile and social strategies going into the Boxing Day period, and not rely on deep discounting as a way to attract shoppers and close sales.

The insight garnered from Black Friday could be a huge advantage to retailers this Christmas.