Black Friday 2018: The True Cost of BFCM Inefficiencies for Merchants


Black Friday used to be as American as, well, American Thanksgiving.

It’s come a long way from its origins in 1952. Always seen as the unofficial start to the holiday shopping season, the undisputed consumer holiday has grown to reach flyers all over the world. This year Black Friday and its echo, Cyber Monday, have reached as far as Brazil and Greece. Other headlines proudly announced this year that some shoppers “stay away and shop online”.

At the end of the day, the result is the same: consumers open their wallets for Black Friday and Cyber Monday.

But the beauty for retailers is that the cycle is predictable. Merchants know that at the end of the year, just like the year before, there will be an uptick in transactions as shoppers stock up for the upcoming holiday season. The schedule is known, and merchants are full-well aware of the date when everything needs to be in working order. Summer was (and still is) the time to start thinking of colder weather, to start thinking of new applications to make this year a bit better, to connect everything together so that as much of the business can run automatically without the need for human intervention.

And BFCM 2018 came and went. But not with the usual roar; instead, Black Friday 2018 felt more like the air being let out of a balloon.

Something’s changed with 2018. Read on…

Black Friday 2018 Felt Different…

Even in the month-long run up to the consumer ‘holiday’, this year’s Black Friday felt different for the consumer. There weren’t any blockbuster headlines of deals everyone just has to have. There’s no real ‘toy of the year’ that all parents are clamoring for; a strange echo of the summer song that almost didn’t happen for the summer of 2018, too.

Maybe 2018 is the year of apathy. After all, it’s been a year of tough headlines and political fatigue for many. Speaking informally with many, it seems that quite a few are just exhausted by the prospect of yet another holiday season fuled by heaps of stuff. With the true social and ethical cost of BFCM being discussed in many circles in earnest, Black Friday was very likely impacted by the zeitgeist.

But a good deal of many other shoppers took a different stint. Stepping back and analyzing past years, they approached Black Friday tactically with a plan in hand.

Some kept to trends of years past and completely shunned all traditional bricks-and-mortar shopping.

Others flipped the script on its head, opting instead to go analog-only and hit the malls.

And even though the air around BFCM was a bit stale compared to previous years…

… But It Still Performed

Black Friday still saw throngs of physical and virtual shoppers effectively shoving each other over for the chance at Black Friday 2018 deals. By Cyber Monday, American consumers were on track to spent $7.8 billion to make it the biggest online shopping day in US history, following record online sales for Black Friday.

But some key markers shifted. The biggest consumers this BFCM were youths, not mom and dad. Beauty and great brands were the big winners this year, with Lululemon making a comeback. More than $2 billion of Cyber Monday’s sales — nearly 20% of the day’s total — is expected to have come from smartphones.

It wasn’t all about ecommerce this year, though. There was the expected bottlenecks on popular ecommerce sites and marketplaces, but it was the physical stores that made some waves this year: many shoppers opted to not just stay at home to shop, instead heading to the mall. And consumers opened their wallets once there: Black Friday 2018 saw more of those who visited stores opening their wallets and spending more per transaction. About 151 million people visited a mall in the US, visiting an average of 11 stores (Forbes). Even though physical retail is still slipping for this consumer holiday (B&M sales on BFCM dropped by as much as 7% while traffic was down 5-9%), this much foot traffic was surprising to many.

So even though BFCM perhaps felt a bit different this year, it still outperformed itself in terms of revenue across all sales channels.

Shifting Consumer and Merchant Behaviour

The confluence and mini-resurgence of bricks-and-mortar with ecommerce this year is an interesting development. In years past, it’s looked like ecommerce has been on track to be the shopping method for BFCM and beyond. This year, though, the big trend was the push for unified commerce across all touchpoints. Consumers hold less and less patience for retailers that have not mastered their data to the degree that the consumer feels like they’re interacting with the same brand at all touch points — physical or digital.

But there was one absolutely unforgivable sin of BFCM 2018: failing on data accuracy and speed.

Because at the end of the day, it really does not matter if your BFCM deal was underwhelming or the deal of the century. What does matter is how merchants handle consumer trust post-purchase, and that has everything to do with how the merchant handles their data.

It’s BFCM 2018, and merchants are still struggling with the most basic element of their business: data.

Because while consumer expectations have been raised to expect the Amazon customer experience every single time they check out, other retailers have been focused elsewhere — improving the front-end website, adding new products, improving social, and implementing new tech, but forgetting about the crucial step of how everything is connected together.

It’s BFCM 2018, and We’re Still Telling the Same Story…

It took me until the day before Black Friday to decide that we were, in fact, going to make a Black Friday purchase.

We needed a mattress.

This had been a discussion in progress for months. We had done the research, and discovered the rabbit-hole that is trying to comparison shop for a mattress (hint: you can’t). We had gotten insofar as deciding on the brand we wanted to buy. It took Black Friday and a whopping $65 discount (again — off a mattress) to finally inspire us to make the purchase.

We had a game plan. No getting up at 5 AM; no waiting in lines. Nope, not for this deal. We were simply going to sit down that Friday evening, head over to the site (on our mobile phones, no less), and complete our purchase online.

In a perfect world, Step 2 would have been wait for mattress to arrive. Instead, Step 2 ended up being where did our money go…?

Because after spending not exactly a small amount on a physically large item, we never received our order confirmation or payment received confirmation notices. Did we even order a mattress?

Now I knew, being privy to what goes on behind the scenes in ecommerce via what VL OMNI does to help merchants and the industry, that there was nothing to panic about. On busy retail days, it’s not uncommon for omnichannel retailers to experience a bit of lag time. In fact, I’ve come to expect dismal wait times when it comes to busy retail days and auto-generated notices that never come when they’re supposed to.

Why? Because the average merchant uses pretty low-quality data integration strategies and tools. I’ve come to naturally expect the lowest standard because the lowest standard in data integration technology and systems is usually what’s being used.

So it didn’t phase me when our shipment notification email came a full day before our invoice and payment confirmation emails, but it was enough to make my partner nervous enough to reach out to the retailer and open a ticket to explore what had happened to our order. It took that customer service representative that full day to look into our order number, track down what had happened, confirm that our order had been received and processed, and look into why the system didn’t auto-generate the notices it was supposed to. All with a hefty helping of ‘sorry’s’ and ‘our systems got overloaded’, of course.

The True Cost of BFCM Inefficiencies for Merchants

What did my $65 savings on the mattress end up costing the retailer? At least a full day’s cost of the person hours it took to straighten out the data automation issues and communicate them back to us. I’d argue that the retailer actually lost money on my transaction by the end of the weekend — and not just due to the $65 discount.

The true cost of bad data integration is tangible on days like Black Friday and Cyber Monday because everything is augmented. And not every consumer will have the patience and understanding to forgive retailers for their bad data integration tactics. The fact of the matter is that data integration as an industry is evolving just as much as BFCM is. Not all solutions are created equal, but many retailers and merchants are still treating all data integration methods, tactics, and strategies as equal and interchangeable.

So if your BFCM didn’t go as smoothly as it could have, take a long, hard look at how you’re automating your data. Are you using just any solution, or have you approached data integration as a strategic tactic and a competitive advantage, pairing up with the best providers in the industry?

Are you saving a few bucks today that your customers will notice tomorrow?

It’s never too late to reflect:

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Preparing for a Successful Black Friday & Cyber Monday