What Retailers Can Learn from ‘Black Friday in July’
Amazon's special discount period, Prime Day, has some lessons for retailers preparing for the actual Black Friday this year, writes Gravy Analytics' Jeff White.
As retailers prep for the upcoming holiday season, Amazon Prime Day (or “Black Friday in July”) offers several lessons for other retailers. Chief among these lessons: to level the playing field (and compete with the likes of Amazon), location intelligence and data needs to be front and center among cross-channel strategies.
Let’s first look at how brick-and-mortar sales and foot traffic fared against Prime Day’s competitive ecommerce deals. Gravy Analytics’ Prime Day Foot Traffic Analysis (measured consumer visits at 1400 retail chains for the two weeks prior and following Prime Day 2018, and compared it to 2017 data), found that for some retail categories – particularly consumer electronics and cosmetic shops – in-store shopping is alive and well. In higher-end consumer electronic stores, in-store traffic picked up this year, adding 5 percent over the average daily attendance rates for the two weeks prior.
This kind of data, which reveals where people go and what they do there, provides valuable intelligence about consumer behaviors that can help retailers plan, predict and take action ahead of the year’s pivotal holiday shopping season.
A few lessons retailers can glean from Prime Day 2018 are below:
- Sensory experience trumps clicks and convenience
It should come as no surprise that before purchasing a big ticket item – whether it’s a home theatre system or a wireless printer – shoppers want to see and experience it. The same logic applies to cosmetics. Customers often like to test out products before buying: am I sure that this shade is right for me? From furniture to jewelry, there are several other instances where browsing stock images and clicking “add to cart,” simply cannot hold a candle to the sensory experience of shopping in-store.
Whether it’s taking cue from Sephora’s makeover services or REI’s climbing walls, retailers should explore new opportunities to create an in-store shopping experience for customers that isn’t easily replicable online.
- Location data can be used to improve in-store operations
Understanding how foot traffic indexed across certain retail categories can put brick-and-mortar stores at a distinct advantage this holiday season. If the findings suggest that electronics and cosmetics will bring consumers in-store, retailers should be prioritizing ways to partner with electronic and cosmetic brands to elevate the in-store experience. Likewise for big box stores such as Target and Walmart – from adding more display space to implementing demonstrational kiosks, how else can retailers and brands partner together to increase marketing efforts and drive more in-store purchases?
Taking this a step further, partnering with brands in categories least affected by Prime Day may also help increase dwell time – meaning shoppers might linger just a little longer before check out to see what else is on sale … instead of simply checking items off their list and heading for the door. Better tactical decisions during the notorious holiday shopping frenzy are also feasible. For example, location data can help retailers identify which stores are their busiest. With this information, retailers might decide to add more employees to those stores to help drive sales during key rush times – cutting down on long lines, overcrowding and customer frustration.
- Know what motivates people to shop online vs. in-store
Lastly, understanding why shoppers choose to buy certain items in-store can lead to more valuable insights about the holiday shopper, including behavior and motivation. For example: do customers only care about getting the best deal, or are other factors – like a store’s location in relation to their home or work – guiding purchasing decisions?
With a holistic consumer profile, retailers can also delve deeper into what drives deal seekers to shop online over in-store – and if there’s any room to show them that shopping in-store is a resource, not hindrance. Adding sensory experiences, ensuring busy stores are well-staffed, and having ample stock of the items that drive foot traffic all contribute to customer delight, which online or offline, we know to be the most important driver of both sales and loyalty.
*Jeff White is the founder and chief executive officer of Gravy Analytics. Prior to founding Gravy, he founded several companies and led them to successful exits. These companies include mySBX (sold to Deltek in 2009) and Blue Canopy (sold to a private investment firm in 2007). Jeff has over two decades of experience leading successful companies and was awarded the D.C. Technology Entrepreneur of the Year in 2011.