The holiday season is undoubtedly the most lucrative for retailers. Last year’s November-December holiday season generated in excess of $691.9 billion, according to the National Retail Federation (NRF). In the end, 2017 saw a 5.5 percent increase in holiday sales compared to the previous year, with online and non-store holiday sales growing 11.5 percent. The overall health, beauty and personal care sector saw a 2.2 percent gain. Many factors led to 2017’s holiday sales growth, such as greater confidence in the economy. But consumer expectation for the myriad sales events leading into the New Year surely played a big role, too.
There are now several official holiday events to pull in consumers (see the calendar on the bottom right for the busiest shopping days of the year). And retailers continue to push the limits. Many launched their holiday promotions on Thanksgiving Day last year–with a few starting even earlier. Some analysts suspect that monthlong deals will soon supplant specific sales days. For now, Black Friday is known as the holiday sales season kickoff. Surprisingly, even though there’s a perception that Black Friday sales have slowed, current statistics show that it’s actually still growing. Black Friday, which follows Thanksgiving Day, is considered the biggest sales day of the year for brick-and-mortar retailers. And it has expanded to include the web; those 24 hours saw $5 billion in online sales alone in 2017.
However, for some smaller, independent retailers, Black Friday may not be the biggest revenue generator of the year. Because these specialty stores thrive on local business, they aren’t positioned to compete with the big-ticket items and deep discounts that retail giants use to steal families away from Thanksgiving meals and conjure winding lines of shoppers at midnight. The competitive edge for smaller stores is customer experience or exclusivity– attributes that could be diminished by gigantic discounts. As a result, some small retailers eschew Black Friday for a promotional focus on Small Business Saturday instead. Small Business Saturday, which follows Black Friday, allows them to capitalize on the advantages of exclusivity, in-store experience and commitment to local customers, sans deep discounts. For the retailer on the fence, both are worth exploring.
Brian Field, senior director of global retail consulting for analytics provider ShopperTrak, says Black Friday will be the largest in-store shopping day of 2018–and the second-largest won’t even come close. He explains that part of the reason Black Friday is so successful is that it’s part of tradition: Family and friends fly in from out of town for Thanksgiving. They pass turkey and mashed potatoes around the table and spend time with loved ones. The next day, they continue the merriment as they pile into the car and shop the sales together.
More than 174 million Americans shopped both in-store and online last year from Thanksgiving Day through Black Friday weekend into Cyber Monday. Consumers spent an average of $335, with 75 percent of it going toward gifts, according to a survey conducted by the NRF and Prosper Insights and Analytics. Early estimates predicted that almost half of consumers would shop Black Friday and nearly one-third of those would only or mostly shop in-store. The chief motivation for some was “offers not available during other times of the year,” reports Periscope by McKinsey.
But with Black Friday online sales growing, and behemoths like Amazon and Walmart taking bigger and bigger slices of the e-commerce sales pie, smaller retailers need to come up with unique strategies for Black Friday.
The following are Field’s expert tips to help small, independent retailers succeed:
- Offer online promotions, but make sure your brick-and-mortar promotions are enticing enough to get customers into the store.
- As competition heats up, expect consumers to start researching and even shopping holiday promotions earlier than Black Friday week.
- Create a mobile strategy. Holiday season mobile purchases continue to grow. Mobile set a new record on Cyber Monday 2017, generating 47.4 percent of site visits and 33.1 percent of online revenue, according to Adobe Analytics. What’s more, shopping apps generated higher conversion rates–in some cases three to five times higher than on the mobile web–according to a Criteo report.
- Create and market customized promotions that appeal directly to your VIP and loyal customers.
- Adopt alternatives to deep discounts, such as free shipping, exclusives and in-store pickup, that usher customers into your brick and mortar.
- Finally, don’t rely on analyst predictions alone. Look at your store numbers and shopper patterns to determine your best strategy.
SMALL BUSINESS SATURDAY
“We don’t participate in Black Friday; we participate in Small Business Saturday,” says Shawn Tavakoli, CEO and owner of Beauty Collection, a Southern California-based prestige beauty retailer with five locations and an online store. “We believe that it is counterproductive to spend our time pulling in customers who are looking for a $99 TV or competing with stores that open at midnight. We choose to maximize the Saturday and Sunday following Black Friday.”
Launched in 2010 by American Express, Small Business Saturday directs consumer dollars to independent local businesses. The effort was certainly a boon to entrepreneurs still feeling the effects of the Great Recession at the time.
“We choose to maximize the Saturday and Sunday following Black Friday.”
—Shawn Tavakoli, CEO and owner, Beauty Collection
In 2017, Small Business Saturday drew $12.9 billion in spending from 108 million shoppers, as reported by CNBC. And no wonder; 70 percent of U.S. consumers were aware of Small Business Saturday going into the event, according to a survey by the National Federation of Independent Business (NFIB) and American Express. Thirty-five percent of consumers who took part in Small Business Saturday shopped small retailers’ websites. Nearly 60 percent shopped or dined at multiple, local small businesses and almost half visited new, unfamiliar ones.
“Small Business Saturday provides people an opportunity to discover and celebrate the variety of small businesses that make their communities thrive,” says Elizabeth Rutledge, executive vice president of global advertising and brand management at American Express. “Beyond visiting their favorite go-to spots, shoppers say Small Business Saturday inspires them to visit places they have not been to before and would not have otherwise tried.”
Tavakoli adds, “Our consumer is the type who likes to shop locally and support their local businesses. We position our company as a family-run business, so the Small Business Saturday theme ties into our model, which is experience-driven.” It’s a model that Beauty Collection customers value. “For that reason, we’re not focused on using incentives, coupons and discounts to draw in new customers.”
True to this strategy, Beauty Collection’s end-of-year promotions demonstrate appreciation for its loyal customers, with incentives and offers tailored just for them. “We’ve found that our Small Business Saturday customers are usually shopping for themselves. They’re coming in for that one piece of expensive skin care, or to stock up on replacement products.”
Beauty Collection also crafts its own VIP event for existing customers during the holiday season. It’s a practice touted by experts, who recommend creating specials for VIPs to maximize Small Business Saturday and other sales events. This approach extends to some communities that participate in Small Business Saturday. It’s not unheard of for customers to enter local business areas and find shops working together to make the event special. All in the same neighborhood, one shop may woo customers with live music while another may provide treats and drinks, with the next stop offering wine and beauty services. These unexpected festivities are part of what makes Small Business Saturday so unique. It infuses consumers with the joy and wonder of shopping locally.
And consumers are pleased. According to a survey by UPS and ComScore, in recent years they’ve offered the following motivations for shopping local:
- “They offer unique product.” (61 percent)
- “I couldn’t find what I needed from traditional sources.” (49 percent)
- “I want to support the community or small businesses.” (40 percent)
- “I like to try new retailers.” (29 percent) • “They feature a broader assortment.” (26 percent)
- “They provide an innovative shopping experience.” (24 percent)
Small Business Saturday also brings loved ones together. Seventy-three percent of consumers who shopped the event did so with friends or family, according to a 2017 American Express survey.
NFIB expects Small Business Saturday 2018 to be at least as strong as last year. “The economy is on pace for 3 percent growth this year, largely driven by consumer spending,” says NFIB policy analyst Paul Bettencourt.
The following are a few expert tips for Small Business Saturday success:
- Take advantage of the American Express Shop Small website, which has Small Business Saturday marketing materials and other support.
- Do not imitate Black Friday by offering deep discounts. Trust consumers to shop the event because they want to support local businesses.
- Spur on promotions by giving consumers rewards for check-ins on apps such as Yelp and Facebook, and enlist their help with social media promotions.
- Partner up. Align your shop with other participating local businesses.
In the end, it’s all about finding the best holiday sales approach for your store. “The holiday challenge for us is an everyday challenge: How do you create an unparalleled experience that the consumer is willing to pay retail for, rather than going on Amazon or seeking out a discount?” Tavakoli explains. “When you have places like Amazon garnering 50 percent of online consumer traffic, winning that online consumer is a challenge. For the small beauty retailer, winning consumers away from the Ultas of the world is a huge challenge. When you factor in Amazon and Sephora, the online-shopper pie is very small unless you have a proprietary product that no one else has. So, stay true to your customers and create relationships with them so that they want to come into your store.”
2017’s BUSIEST SHOPPING DAYS
Let last year’s busiest shopping days give you some insight into what to expect for 2018.
Nov. 24 Black Friday
Dec. 23 Super Saturday
Dec. 16 Saturday
Dec. 26 Tuesday
Nov. 25 Small Business Saturday
Dec. 22 Friday
Dec. 9 Saturday
Dec. 2 Saturday
Dec. 30 Saturday
Dec. 21 Thursday
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