Black Friday/Cyber Monday Weekend: Three Takeaways From Our Latest Survey
The holiday shopping season started early this year as many retailers kicked off their annual promotions well before Black Friday weekend. Amazon hosted its Prime Early Access Sale from Oct. 11-12 and Target held its Deal Days from Oct. 6-8, among many others, in an effort to sell off their excess inventory. This combined with inflation rates still above 7% at the end of November had many questioning what Black Friday/Cyber Monday weekend would look like this year.
To help uncover the latest consumer trends from this weekend, Blue Yonder surveyed over 1,000 consumers who shopped during one of the five shopping days (Thursday, Nov. 24-Monday, Nov. 28) to learn more about how inflation impacted their spending, if they would return items, and more.
Here are three trends we uncovered:
While Consumers Spent Less Because of Inflation, Deals Still Drove Them to Buy
Inflation, and how it will impact consumer spending, is atop retailers’ list of concerns this year. Our survey confirmed consumers are in fact tightening their belts, with 60% of shoppers reporting that they spent less than normal during Black Friday/Cyber Monday weekend this year and 30% spending a lot less than normal. However, the results also showed that 61% of shoppers were pleased with the promotions and deals that were available this weekend, with 25% reporting they were very pleased and 36% reporting they were somewhat pleased.
Although discounting can make prices more appealing to shoppers, retailers don’t want to risk losing potential revenue when spending is already down. With Blue Yonder’s Luminate Lifecycle Pricing solution, retailers can still be strategic about how much they markdown products. The solution provides retailers with insights into the factors that are influencing consumer behavior, such an inflation, so they can make optimal pricing decisions based on the price elasticity of an item. The ability to accurately forecast which products will be in demand, as well as when and how much consumers will pay for them, will be an essential strategy as retailers try to get their final holiday items off the shelves.
E-commerce Shopping Dominated
Consumers still value flexibility for getting their purchases. The survey showed that 73% of respondents used buy online ship to home this year, while 43% made a purchase in store; 35% leveraged an omni-channel fulfillment method like buy online pick up in-store (BOPIS) (18%); buy online, curbside pick-up (11%); and purchase online and pick up in a locker (6%), one of the newer omni-channel fulfillment options as retailers try to cut down on shipping costs.
Regardless of the volume of online transactions, holiday shoppers expect real-time availability and accurate commitments before check-out. During peak season, many retailers are challenged to provide customers with accurate promises due to stale inventory data that isn’t in-sync with the high volume of sales. Many retailers don’t factor in staff availability to ensure they are capable of their promises for delivery, BOPIS, curbside, and locker slots.
To meet that expectation and provide accurate promises without driving up costs, Blue Yonder’s Commerce and Order Management (OMS) solutions can help deliver responsive real-time inventory visibility, along with profitable and capacity aware order sourcing and orchestration. Enhanced by AI/ML, Blue Yonder helps retailers balance the needs of both the store and online shopper. These solutions empower retailers to make promises to delight customers not just during the holiday season, but all year long.
What Retailers Should Expect for the Future
Customers were pleased with the discounts, and results show that 23% of shoppers have done at least 75% of their shopping for the holidays after this weekend. When planning for the remainder of the season, AI/ML insights can help better forecast shopper demand and which days they will be shopping. Blue Yonder’s Luminate Demand Planning solution can analyze hundreds of demand-driving variables, like pricing and item availability, to provide a unique demand projection to help retailers ensure they have the right products in the right place at the right time.
As we look toward the future and what we might expect next year, one thing is clear: Cyber Monday is becoming as important to the holiday weekend as Black Friday. As a primarily online-only holiday, Cyber Monday online sales hit a record $11.3B this year, which makes sense as we saw such a high amount of ship to home purchases in our survey.
Despite Strict Return Policies, Shoppers May Still Take Back Their Items
With a high volume in sales over the holiday weekend, retailers should still expect to see returns coming in over the remainder of the season. In 2021, NRF anticipated that 16% of items that were purchased during the holidays would be returned. Our survey confirmed that this number is continuing to grow, with 25% of respondents saying they are likely to return an item this year.
As costs continue to rise, we’re seeing retailers implement strict policies to deter consumers from returning items, from shortening return windows or even charging a fee. Charging a fee for returns can offset the shipping costs, but often doesn’t account for the labor cost to inspect and repackage the item, along with the impact to their profits if the item cannot be resold. The result is a drag on bottom lines. That’s why retailers are also investing in new technology to help guide the customers to select products they don’t have to return in the first place.
Retailers that will win the holiday season are focusing on delivering the personalized experiences their customers have come to know and expect while also balancing price changes that align with customer demand.