Great discounts aren’t just for Black Friday. With retailers and sellers locked in fierce competition, dishing out promotions has become vital for drawing and keeping customers. Managing discounts well means not only knowing what customers want, but also crafting win-win situations for them and the business. In this article, we’ll explore tactics and strategies to help merchants offer appealing discounts, ramp up sales, and upgrade customer service.
Why does Black Friday Work?
Black Friday has its origins in the United States and is linked to the traditional kickoff of the holiday shopping season after Thanksgiving. Typically falling on the last Friday of November, it heralds the start of the Christmas season. What makes Black Friday renowned are the substantial discounts and exclusive deals that capture the public’s attention.
Shoppers anticipate substantial discounts, promotions, and special offers on this day, leading to a massive surge in sales and demand for products and services. Retailers actively promote Black Friday, contributing to its widespread appeal. Consequently, Black Friday has become synonymous with hunting for bargains and seizing the chance to save money on gifts and other items before the upcoming holidays.
The excitement around Black Friday stems from several factors:
- Anticipating huge discounts. Shoppers expect substantial savings and fantastic deals on this day, so they’re ready to bide their time and keep a close watch on Black Friday.
- Pre-holiday season prep. As the holidays approach, many people start gearing up, and Black Friday becomes a chance to snatch up some amazing deals during this time.
- Advertising campaigns. Numerous retailers and companies actively promote Black Friday, stirring up a lot of interest and buzz around the event.
- Consumer psychology at play. People relish the thrill of saving money and scoring good deals, and Black Friday delivers on that front.
- Limited-time offers. Many discounts and special deals on this day come with time or availability constraints, creating added urgency and prompting consumers to act swiftly.
Black Friday in Numbers
Shoppers in the USA, Canada, and the UK show the greatest interest in Black Friday. In these countries, buyers intend to spend $485, $430, $397, respectively.
In 2022, Black Friday expenditure totaled $9.12 billion, marking a 2.3% increase compared to 2021.
As per Shopify store owners, the average order amount during Black Friday/Cyber Week in 2022 stood at $102.10, slightly up from the $100.70 recorded in 2021.
In 2022, approximately 87.2 million U.S. consumers engaged in online shopping, a figure largely consistent with 2021.
The most spendings on Black Friday 2022 was on the following categories:
- Clothing/accessories (53% of respondents)
- Electronics (49%)
- Toys (35%)
- Beauty personal care (28%)
- Groceries (26%)
Millennials and Gen Z represent a significant portion of Black Friday shoppers, with individuals aged 26-35 showcasing the highest purchasing power.
49% of shoppers stated that complimentary shipping was one of the primary factors influencing their purchases during Black Friday. 29% of females intended to participate in Black Friday shopping, as opposed to 27% of males.
The Fear of Missing Out (FOMO) is linked to the unease of passing up on opportunities and advantages. Social media and advertising greatly contribute to amplifying this effect. Actively showcasing amazing deals and others’ purchases can induce feelings of inadequacy and concern about potentially missing out on money-saving opportunities or valuable purchases.
This phenomenon is so prevalent globally that it’s often referred to as “the ailment of the modern era.” It’s closely tied to social media and motivates people to desire involvement in events like Black Friday to ward off the fear of missing out on potential gains or opportunities.
Several common triggers often drive people to make purchases:
- A sense of urgency (“limited time offer”, “promotion ends soon”)
- Scarcity of goods or limited time (“last items in stock”, “limited time offer”)
- Incentives and extra perks (“exclusive discount for subscribers”, “sign up for a special offer”)
- Utilizing social networks (active display on social platforms, sharing with friends to pique their interest)
Tips on How to Make Profitable Offers
Shoppers are always on the hunt for the top Black Friday deals, and online retailers can capitalize on this by providing discounts on both new and existing products, thereby boosting sales and revenue. Black Friday presents a prime chance for online retailers to entice new customers. Due to the discounts, shoppers are more inclined to explore new offerings on Black Friday. Moreover, online retailers can utilize Black Friday to declutter surplus inventory and create space for new stock.
Let’s explore the strategies that will help you make the most of Black Friday. We’ll delve into how to craft compelling offers that resonate with buyers and consistently yield positive results.
1. Free Shipping
Offering free shipping can motivate hesitant customers to make a purchase:
- You can establish a minimum order value to ensure that shipping expenses don’t eat into the transaction’s profit.
- It’s beneficial to test the waters with free shipping during specific time frames like the initial hours of Black Friday.
- Additionally, you can provide free shipping as a perk for loyal customers, such as those who make multiple purchases from your store.
2. Buy One, Get One Free
You can offer goods as gifts based on the cost of goods or the average purchase in the cart. Additionally, you can create creative promotions by bundling products to reward existing customers and boost sales.
Strategies like “Buy X, get Y” (e.g., 50% off or get one free), along with shipping and other types of discounts, offer increased flexibility when crafting loyalty programs. Monitoring the performance of your bonus products can help you identify which ones yield the best results.
3. Rewarding Loyal Customers
Utilize discounts to reward loyal (registered) customers. Analyze their purchase history and tailor special offers to their preferences. A whopping 76% of shoppers prefer personalized discounts.
For instance, Wizz Air effectively implemented this strategy by providing a 30% discount on flights to their club members, enticing customers to make their next purchase. The Black Friday discount may even be boosted based on availability.
4. Discounts for Early Bookings
Launching new products concurrently with a Black Friday promotion can significantly expand your audience and enhance the prospects of a successful product debut. This approach is particularly effective when the product isn’t as widely recognized, unlike launching a new iPhone. However, exercising caution is crucial when offering discounts on new products. Discounting a product before it hits the market could potentially diminish its perceived value among potential customers. Hence, it’s advisable to refrain from large discounts and ensure that any markdown is only a small percentage off the full price of the product.
When applying a discount to a product, you can present it either as a percentage or in monetary terms. Opt for the approach that delivers the most value to the customer based on the product type.
5. Gifts With Purchases
Provide your customers with additional incentives for their purchases, such as helpful guides, instructions, or manuals. Given that Black Friday sales and promotions coincide with the approach of the New Year, consider including tips for New Year’s home decor, gift ideas, and other seasonal selections.
For instance, Etsy consistently offers gift guides throughout the year.
6. Random Discounts
Offer a discount accompanied by a surprise gift, and incorporate win-win sweepstakes in your emails. Send out a unique random code alongside a surprise discount that can be utilized at checkout.
Customers can discover their discount by adding items to their cart and proceeding to checkout. This approach not only adds an element of excitement to Black Friday deals but also boosts email open rates and encourages more subscribers to visit your website and proceed to checkout.
What Should You Remember After Black Friday
To avoid losing customers after promotions, it’s essential to plan a post-promotion strategy to not only reap benefits but also gain new loyal customers. Consider these steps:
- Showcase your promotions and discounts across diverse online platforms to widen your audience and entice new customers.
- Engage in customer surveys to understand their preferences for enticing promotions and discounts.
- Prioritize transparency and honesty in your promotional offers to foster customer trust in your brand.
- Evaluate the effectiveness of your promotions and discounts to inform future campaigns.
- Maintain communication with customers following the promotion to sustain engagement.
Using discounts is the art of achieving balance. If you use them wisely, offering them at the right time and place to the right prospect, the results will be great.
It is worth considering that you should not give discounts simply because others are doing so. There are always alternatives if you decide not to discount your items.
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