The Evolution of Black Friday Sales
Hi CX Sages,
It's been a fun week heading into the depths of Q4. We are working on some direct mail initiatives, a ton of email and SMS goodness, and special launches for BFCM. So much to talk about.
Before we hop in, two quick things:
1. Cody and I just started recording season 2 of Down To Chat and that first episode should be coming your way next week, we are beyond stoked about it!
2. I wanted to briefly highlight a newsletter I’ve been loving lately. WTFcrypto is a newsletter that helps beginners (like myself) understand crypto in a way that finally makes sense. Thousands of readers trust them to deliver critical information about crypto so that they don’t fall behind. Sign up here.
Lots to talk about this week, so let’s jump right into it.
Remember the days when Black Friday sales consisted of waiting outside Best Buy to get a cheap TV?
Over the last few years, we have seen a trend of brands bringing Black Friday earlier and earlier each year, as well as extending Cyber Monday sales well into December, in an effort to turn Q4 into one large never-ending blockbuster sale.
It’s gone from “early access of our Black Friday sale” to:
- Private Sale (Cuts Clothing)
- Warehouse Sale (Rag & Bone)
- Fall Sale (Our Place)
- Friendsgiving Sale (Graza)
- and so much more.
We’ve seen brands like 8greens just boldly go with “Best Deal Ever”, my fingers are crossed it actually is, because if it isn’t their customers certainly won’t be thrilled.
What is it about all of this that is working?
Is this front-loading BFCM revenue?
If folks stock up now, do they purchase again next month?
and, will this ever stop?
I’ve got some thoughts, let's chat.
- How this happened; a brief history
- RIsks associated with this
- Should you do it
Before we dive in, a huge shout to Gorgias, our sponsor for this week’s newsie.
Gorgias is my CX helpdesk of choice and what I’ve used at both OLIPOP and JRB. If you have been here for a bit, you know how much I love Gorgias and why I think it’s an absolute must-have for any Shopify business. More on my fav Gorgias use cases here.
It’s our one-stop-shop for all things customer. If you have any questions about how we use Gorgias or why we chose Gorgias, feel free to email me anytime.
1. How this happened–a brief history
It’s been a lifelong dream of mine to guest lecture at a college, but until then, newsie lessons it is.
Buckle up, Black Friday history 101.
It is believed by many that the term Black Friday derives from the concept that businesses operate at a financial loss, or are “in the red,” until the day after Thanksgiving when massive sales finally allow them to turn a profit, or put them “in the black.”
However, this is not entirely true.
A more accurate explanation of the term dates back to the early 1960s when police officers in Philadelphia began using the phrase “Black Friday” to describe the chaos that resulted when large numbers of suburban tourists came into the city to begin their holiday shopping and, in some years, attend Saturday’s annual Army-Navy football game. The huge crowds created a headache for the police, who worked longer shifts than usual as they dealt with all the chaos.
The use of the phrase “Black Friday” to signify a positive boost in retail sales didn’t spread nationwide until the late 1980s, when merchants started to spread the red-to-black profit narrative. Black Friday was described as the day stores began to turn a profit for the year and as the biggest shopping day in the United States. In truth, most stores saw their largest sales on the Saturday before Christmas.
Many look at the name through an accounting lens too. “Black” refers to stores moving from the “red” to the “black,” back when accounting records were kept by hand, and red ink indicated a loss, and black a profit.
This was all from Brittanica, but they’ve unfortunately missed the part of recent history where this Friday moved to late October and early November.
Over the last few years, as shopping massively shifted from retail to online/omnichannel, we’ve seen logistics become a prime concern, leading brands to pressure consumers to order early in order to have their goodies in time.
Last year, I ordered some stuff from MeUndies that made its way to Guam before heading back to LA, and then east-coast bound. In order to make sure folks get their goods early, brands started pushing them to order early. Easy.
In 2020 it was Amazon that helped push up the holiday start, with an October Prime Day that had been delayed by the pandemic. Yet this year is shaping up much the same way.
With retailers starting their holiday messages and supply chain snafus continuing to make headlines, consumers have responded. A great majority (83%) told RetailMeNot that they would start before Thanksgiving, with 19% saying they started in August or even earlier, 18% said September, 22% October, and 24% in November before Thanksgiving Day.
You know who did not mind this trend at all? Retailers.
2. Risks associated with this
Discounting is a weird animal. It works, but the returns greatly diminish over time.If a brand is always on sale, the list price is not actually the list price, nor is it the price a repeat customer would pay.
Great examples of this are Gap, Old Navy, and Macy’s.
Without even checking their site, I can say for certain there is a sale of sorts running.
But what about brands that never discount and are running their first-ever sale right before BFCM?With a sale like this, there are two potential goals:
- Make more money by having customers buy now, and again on BFCM
- Steal wallet share from other brands by having customers spend their money with you
As far as number one, it really depends on the brand.
For example, I highly doubt you’ll step up your entire wardrobe now and then go crazy at the next Cuts sale next month, but can see customers stocking up on Graza now, and again next month.
Number two is more plausible. Customers only have a finite amount of resources (cash), and by pushing urgency or scarcity before any other brand, you might get that customer base to spend their finite stash of cash set aside for holiday gifts or shopping a bit earlier.
Will this get earlier and earlier each year? Yes.
Will brands get more creative each year? Also, yes.
One small issue: If your BFCM is a much larger one than the one you ran a few days or weeks before that, I can imagine customers being frustrated they stocked up right before a sale and asking for a price match. Not a huge problem, just a slight pain in the ass for your CX team.
In general, discounting works on the principle of urgency, as the discounts are only available for a specific period of time. If people don't buy the product now, at the discounted price, they're likely to miss out on saving some money. There is urgency involved. That anticipation of missing out is exactly why discounts work.
If you train your customers on specific times of year each year, they will probably remember to wait for that. The less you discount, the more discounting can help make that splash. Slippery slope, so tread with caution.
3. Should you do it?
I’m never here to opine the one right way to build your 18-figure brand, I’m just here to push for intentionality around marketing, especially discounting.
A great example of doing this thoughtfully is Graza. So much of their brand has been built around community. From hosting IRL dinners across the tri-state area to sharing Graza moments around meals, it feels so authentic that their first real sale is in honor of Friendsgiving.
When chatting with folks about this concept for this newsie, Amrit pointed out Disapora Co’s sale as another example of a brand giving a “why” behind the sale. Instead of “buy our shit”, they went in on explaining the why. A full notes-style approach.
At OLIPOP, BFCM was the largest sale of the year, and we kept it simple and straightforward.
At JRB, we offer products and kits we don’t offer year-round.
Whichever route you do take, I've got just one favor to ask:
Be intentional with it. Play the long game.
That’s it for this week!
Any topics you’d love to see me cover? Drop a reply!
Appreciate you more than you know,
Lou is also a part of our CX friends discord group!
What’s your CX Philosophy?
I can get kinda passionate about CX. I have so many CX philosophies, but I’d love to talk about one in particular: how we operate within the larger business structure.
There can be a disconnect between CX and the rest of the team in traditional settings — I’ve had past employers tell me that CX is an island. They’ve been surprised when I can give them valuable customer insight with data backing it. They haven’t invested in CX structure and instead pushed more dollars to paid media, wondering why they were losing repeat customers that had predicted LTV.
I think that attitude is changing in large part to CX leaders like those reading this newsletter. We’ve all strapped on our floaties and rowed over to the meetings we would have been left out of before. We’ve demanded to be a part of the conversation.
I mean, especially for DTC businesses, CX and Social are the external voices and mouthpieces of your business. It can make or break a reputation. Why wouldn’t you want to hear what they have to say?
My philosophy is that we, as CX leaders, have to uphold these high standards. We need to advocate for ourselves to be able to better advocate for the customer. What we do is important and can work cross-functionally with literally every part of the business—operations, marketing, growth, retention, social, etc. Make some noise!
Your favorite Joggy CX story?
Brands talk a big game about community — it’s become a buzzword. Maybe it means something to a brand, maybe it’s just a word to hook you in. I’ll admit that, on the consumer side, I’ve seen very few brands get this piece right in the past. But I also think that’s changing now. We demand more from our favorite brands—we want to hear what they have to say and vice versa. No one wants to feel like they’re yelling into the void…and then receive an automated message.
I haven’t been with Joggy & TYB long, but I will say that their approach to business is truly community-first, with like-minded leaders. Ty Haney is such an innovator.
I’m tired of being rewarded for brand loyalty with points that I forget about (sorry!). I want to vote on my favorite design or flavor or let them know when something misses the mark—I truly think that this is where ethical consumerism can take place.
Not every customer is going to want to engage in group discussions or testing, and that’s okay. But it should be an option. Brand loyalty is fierce when people know they’re being listened to, and I’ve already seen this with my customer interactions at Joggy.