20/02/2023 • Andrew Lowdon
Black Friday 2022 has come and gone. With external factors including the Cost of Living Crisis and a Winter World Cup, the run up to it has been clouded with questions. Will consumers pull back spend this year? How can we convince people to buy? What if they’re watching Football rather than Shopping?!
Here we’re taking an initial look at what we saw from Black Friday 2022 and answering some of the questions we had
All brands are facing the challenge of dealing with the impact of the Cost of Living Crisis. One concern was that market demand would be suppressed with disposable incomes reduced. We’ve actually seen the complete opposite with interest at all-time high levels and traffic levels up 70% when comparing Black Friday 2022 vs. 2021.
Looking at Revenue generation it’s fantastic to see higher levels across every hour in 2022 compared to 2021. We did see a small drop in conversion rates as consumers looked for great value deals compared to last year. This was planned for by using product bundling with compelling offers to increase the average basket value by 8%.
A big question mark was around the impact the World Cup would have on BFCM. Traditionally retailers see 19% of Black Friday revenue generated between 7pm & 10pm and there was a fear that with England playing USA at 7pm, this could have a big impact on sales. Would people buy and when?
Firstly, there was no negative impact seen on revenue generation caused by England vs. USA on Black Friday. We did see a clear change in consumer behaviour compared to 2021, with the 7pm - 10pm period only accounting for 9% of revenue and a big shift to spend earlier in the day. The hours of 11am - 2pm saw 33% of revenue compared to 21% in 2021. Looks like everyone was getting their shopping in before the big game.
The Saturday & Sunday which are often overlooked are a great opportunity for brands. We saw these two days generate 39% of revenue with CPMs 17% lower than Black Friday helping to maximise the value of ad spend.
Looking at the two most important trading days, we see a distinct difference in how consumers purchase and the urgency to purchase. Black Friday sees consumers acting quickly with 38% of revenue generated between 10am & 2pm. This appears to be driven by fear of missing out on a deal due to stock availability.
Cyber Monday sees the majority of purchases later in the day with 41% of revenue generated between 4pm & 9pm as consumers take advantage of deals at the last minute before they end. It’s important that advertisers don’t pull back spend based on performance early in the day on Cyber Monday. The revenue does come, just later than you’d like.
Black Friday is one of those marmite events. Some people love it and will invest heavily in using it to drive high revenue levels at a lower profitability level. Others hate it and want to focus on activity with a higher first-purchase profitability level. Personally, I see the Black Friday period providing brands with two great opportunities depending on the business focus and the offer needs to change to match.
Scale up Customer Acquisitions when purchase intent is at its highest and Customer Acquisition Costs are actually at their lowest.
Increase Customer Lifetime Value by deepening a customers use of a brand’s product set
The common approach to both of these opportunities is to give a heavy discount, but it can be even more effective to bundle products up and communicate a compelling reason to purchase without the discount at Black Friday. Black Friday is a discount event, but with the right planning, it doesn’t need to be.
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