Black Friday: What Can We Learn During the Christmas Spending Frenzy?

 By: James Lovell, European Retail Executive, IBM Commerce

So, Black Friday 2015 has been and gone and we are now well and truly into the Christmas shopping season, but did Black Friday this year have the same impact on the High Street that it did in 2014?  Looking at some of the high level statistics, it certainly did. Consumer spending for the day went over £1 billion for the first time, showing an increase of 36% over the previous year. IBM has this year been tracking the effects using it’s new Watson Trend service to provide some interesting results and here are some of my observations.

Digital channels lead the way:

One of my biggest observations for Black Friday this year was the shift in focus from physical stores to the digital channels.  One of the highlights (or low lights, depending on how you viewed it) last year was the amazing scenes in some retail outlets, where consumers were literally fighting over products that were heavily reduced.

There was a definite shift in retailers using the digital channels even more than ever to promote their Black Friday offers and this can be seen from our results that show that online sales rose by over 50% compared to 2014. Physical stores showed a decrease in sales of 4.3% this year against 2014, further backing up the evidence of a shift to the digital channels. This shift did take some retailers by surprise, with digital page responsiveness being hit, emphasising the importance of a robust peak trading testing and planning programme.

Black Friday, Black Friday Weekend or Black Friday Week?

Another key difference in my opinion this year were the different promotional strategies various retailers were taking.  Many used Black Friday to kick off a sustained period of promotional activity, rather than simply keeping it to one day.  The mix of products promoted were also generally more focused, with carefully selected products, rather than the overall blanket X% off everything we saw last year in many cases.  This tells me that retailers are really looking to control sales margins greater this year at a time when sales are at their peak and profits need to be maximised before the traditional end of season sales.

Mobile is king:

This has been coming for sometime now and Black Friday confirmed that mobile channels have now well and truly taken over from the desktop as the primary digital channel.  63% of all digital traffic came through mobile devices and 47% of sales came through the mobile channel.  It is still interesting though that consumers still appear to prefer the larger screen devices for actually making their final purchase.  This is more than likely down to the richer customer experience that can be delivered through tablets and the desktop, than that of the smartphone.

Dwell time is on the up:

Last year we had seen indications that dwell time was reducing, but encouragingly our Watson Trend analysis is showing that dwell time is now actually increasing.  This backs up a trend I have been seeing with my retail clients, where they are working heavily on making the digital experience far more emersive by fusing content with commerce to further engage and inspire the customer online.  This looks like it is paying off as session lengths increased, whilst bounce rates reduced.

On the face of it, all this bodes well for retailers going through the Christmas trading season.  However, it will be interesting to see how trade continues on through December and into the New Year sales and when the dust settles in late January, will we all be looking back and thinking if we got it right for this year?



What Can Retailers Learn form Cyber Monday

Last week I was interviewed and filmed by Internet Retailing Magazine about what the retail industry can learn from initial findings around Cyber Monday.  The results were compiled as part of IBM’s Digital Benchmark reporting.  The statistics are captured in real-time from over 200 retailers across the UK and made for some interesting reading.

Show-rooming Doesn’t Need to Kill the Shop Floor

There’s a new trend hitting the high street – consumer show-rooming. This term refers to the practice of consumers entering the shop floor to seek out desired items and then making their purchases online or via mobiles.  In light of this new behaviour, retailers need to get smarter about how they interact with consumers. Instead of shying away from technology, shops need to use it to retain in-store loyalty.

 It’s the speed and flexibility that people like about buying online – to ensure that consumer show-rooming has a positive effect on high street sales, retailers need to create a similar environment to the online space, one that makes it easier for consumers to buy in-store.

How can technology improve consumer interactions at the shop floor level?

Retailers need to have the ability to recognise when a loyal customer walks into a store, and crucially, have access to an accurate and complete overview of their previous interaction history, not just with the physical shore, but across all channels.

Contact can be established by using wi-fi-based ‘presence zone’ technologies to identify a shopper as soon as they enter the shop. Working in tandem, location-based services linked with smartphone devices can give retailers the ability to identify customers individually and send targeted marketing alerts to these devices.

The best way to turn consumer show-rooming into a positive behaviour is to arm in-store employees with technology that builds on the two areas above and helps them engage directly with customers. By collating online and offline consumer insight, retailers can offer personalised promotions and ramp up sales conversion in-store.

Many high-street retailers recognise that innovations such as augmented reality applications can also provide on-the-spot product information and promotions. However, it takes an innovative retailer to deploy this type of service.

Ultimately, there are many technologies that can be used to recognise customers once they enter the store: presence zones, location services and even biometrics such as facial recognition can all be used.  But their usefulness stems from organisations having sufficient and appropriate customer data, insight and understanding to identify each customer individually.  Integrating this data across multiple channels is also vital for success.

By treating consumers as individuals, retailers can engage them through a variety of devices, from digital signage to interactive kiosks. If customers are using the store as a showroom, this type of technology can engage them in ways that encourage purchases to happen in situ rather than online.

The shop floor is fast becoming a point of consumer interaction that could just as easily lead to follow-up sales in store or online.

Retailers need in-depth understanding about their customers to be able to offer more engaging and immersive experiences. And all this depends upon having the right technology to turn customer data into customer insight.

James Lovell – IBM European Smarter Commerce Solutions Consultant

IBM Mobile App Will Monitor the Effectiveness of Deals

IBM app will monitor the effectiveness of deals

07 Jul 2012 | By James Halliwell, The Grocer

Software giant IBM is launching a mobile app that offers retailers and brands insight into why some promotions work and some don’t.

The app is ostensibly being launched to let shoppers see detailed information about supermarket products by simply panning their smartphone camera along the shelf. Using augmented reality, the app can display the ingredients, issue coupons – or even tell you if your friends liked it.

“When you focus on a product area, the requested data will flash up – nutritional info, for example,” said IBM European smarter commerce solution consultant James Lovell. “A shopper could even see what their friends have said on Facebook about a product and make a purchasing decision based on that.”

However, the app would also provide valuable information to retailers and brands as to why the shopper chose one product over another, he said. “In a store environment, it’s easy to see what sells, but difficult to monitor what products are being looked at.

“This app will allow retailers to accurately see inside the decision-making process. Knowing the products people look at but don’t buy is just as important as knowing the ones they do. Retailers can evaluate whether there is something wrong with its pricing structure, or store placement. It gives them advanced analytics pre-purchase.”

The success of promotions was often determined by sales rather than pre-purchase decision-making, he added. “Brands will be interested in the analytics this app will generate to understand the effectiveness of a promotion.”

A spokeswoman for IBM said the release date and price for the worldwide app, which has the working title of Augmented Reality Mobile Shopping App, is still being finalised.