As Black Friday sales have become more popular in recent years, the traditional retail calendar has shifted, and the majority of holiday shopping now occurs in November. But just when retailers had gotten used to that new normal, a new new normal – Covid normal – emerged, and now the question on everyone’s mind is how the pandemic will change consumer expectations and behaviour during peak season. Inside Retail spoke to four retail experts – Nathan Bush, Jana Bowd
a Bowden, Gary Mortimer and Richard Facioni – to find out what businesses can expect from Black Friday 2020, which is set to occur on November 26. Discounts (and shopping) will be spread over more days Walmart has already announced that it will be reinventing Black Friday, which is traditionally a one-day and, more recently, a one-weekend sale. Instead, the US retail giant will hold three separate sales events across the month of November, starting on November 4. For each of the events, it will offer deals online three days before they’re available in-store. “I think what Walmart is doing is really smart, not only in having multiple sales but in offering these deals three days before they are available in store – this should reduce the physical rush,” said Nathan Bush, founder of the e-commerce consultancy 12High. Besides enabling better crowd control, spreading the deals over more days puts less pressure on delivery networks to process one massive spike in order volume. “Certainly from a network point of view, Australia Post is encouraging retailers to try and stagger sales to ‘flatten the curve of the sale and create a flatter peak’. Language that seems very familiar in 2020!” Bush said. While many retailers won’t go so far as to create their own sales calendar as Walmart has done, that is essentially going to happen anyway due to the timing of events this year. Amazon Prime Day was postponed from July to October 13-14, Click Frenzy in Australia will occur on November 10, Black Friday and Cyber Monday will occur on November 26 and 30 and Australia Post will stop guaranteeing delivery in time for Christmas after December 12. This means the trend over the past few years of spending being brought forward earlier into November will be exacerbated. “[Australia Post] has effectively brought Christmas forward a week and a half. This makes Black Friday and Cyber Monday not as a lead up to Christmas sales – but smack bang in the middle of it,” Bush said. Jana Bowden, associate professor of marketing at Macquarie University’s business school, agreed that holiday shopping is already well underway. “In fact, research has shown that 78 per cent of Aussies this year are shopping early and they are indicating that they are going to spend up in October and early November,” she said. “Frankly, looking at consumer spend patterns right now, retailers aiming at starting their sales on Black Friday…have missed the boat, and that strategy will end up too little and too late.” Stores will have capacity limits and queue trackers Another new aspect of Black Friday in the US as well as Australia this year is reduced capacity limits in stores. Big box retailer Best Buy has said it will continue to limit store traffic to comply with social distancing recommendations, while Walmart will operate at 20 per cent of its usual capacity. In Australia, capacity limits currently vary by state. In Queensland, indoor venues under 200sqm can have one person per 2sqm, or one person per 4sqm for venues over 200sqm. In NSW, it’s one person per 4sqm. Retailers in Melbourne were still in lockdown at the time of this writing, and only open for click and collect. Richard Facioni, executive director of Alceon Group, which holds the rights to Lego certified stores in ANZ and owns half of Mosaic Brands, the parent company of Noni B, Katies and other apparel brands, said reduced capacity could result in long queues to get into stores on a busy day like Black Friday. “We’ve used virtual queuing in the Lego stores, particularly when we opened a new store in Charlestown [NSW] a few weeks back. People could log on and they were given a slot, so we could control the queue, because we didn’t want people queuing up outside,” he said. “It’s relatively low-tech, but it works well. We can manage the queue throughout the day, rather than have everyone show up at nine o’clock in the morning.” QUT professor of marketing Gary Mortimer noted that Woolworths recently launched a tool called Q-Tracker that lets shoppers see how long the queue is outside their local supermarket, so they can pick a less busy and safer time to visit. “We may see more retailers adopt this approach,” Mortimer told Inside Retail. Bush said retailers need to remember that peak season can already be a time of high anxiety for shoppers, and Covid will only increase that. “I don’t think we’ve moved past the safety and certainty that customers are still looking for. Any retailers that help simplify this [time] for customers will do very well,” he said. “The retail basics of making sure inventory levels are accurate, product details are accessible, customer service available and fulfilment promises are met, will be key.” Online will be bigger than ever According to a recent survey of more than 1000 Australian consumers by Emarsys, only 9.5 per cent of those planning to shop for Black Friday deals will go in-store, while 30 per cent will buy from brands online. Almost one quarter will avoid in-store shopping because of Covid-19, while 18 percent will avoid in-store due to crowds. Based on these results, Emarsys is predicting that Black Friday 2020 will be the biggest year on record for online retail traffic. The experts Inside Retail spoke to largely agreed. “I think the early results from Amazon Prime day in the US have answered the question of whether there is any growth left after such a massive year,” Bush said. “At least from an online perspective. Analysts are reporting an increase of 49 per cent year on year for this year’s Prime sales with the average household spend up $110.02 versus $154.59 in 2019. It shows there’s plenty of growth left!” Bush believes there are two factors driving the growth of online sales right now. “The first is new online customers. There were approximately a million Australians who shopped online for the first time this year. Depending on the experience they had, you can expect that Christmas may be their second, third or fourth purchase,” he said. “Secondly, many retailers have invested heavily in people, technology and processes to make sure they can capitalise on Christmas 2020. With a (relative) lull in Jul-Sep to recover and fine-tune these, we expect that these investments will pay off in peak season.” But concerns about delivery could impact sales Australia Post’s December 12 cut-off for guaranteed delivery before Christmas could impact online sales on Black Friday, which is just a little over two weeks before that date. “I suspect many shoppers won’t risk it and will shop earlier this year,” Mortimer said. While Australia Post has increased its staff to cope with the seasonal demand, Bowden wondered whether it will be enough. “The message to consumers is the earlier the better,” she said. The fact that there are still inventory shortages in the market could also contribute to delays, according to Alceon Group’s Facioni. “We had a lot of suppliers cancelling their spring/summer stock and then having to reorder them and get them back into production, but also now we’ve had these port delays for the last few weeks, so that’s caused a real bottleneck with vertical product, but also third-party wholesale product coming in,” he said. If this doesn’t get resolved in the next few weeks, Facioni said many retailers won’t have enough inventory to push through on Black Friday. What else to know In terms of categories, Bowden from Macquarie University thinks fitness, health and wellbeing, electronics and gaming, DIY and remote working equipment will be the big winners this year. Bush added clothing, household appliances and furniture and toys to the list. According to the Emarsys survey mentioned above, around 56 per cent of consumers will spend either the same or more this Black Friday than in previous years, with around 40 per cent planning to spend between $100-300. Bowden also thinks targeted advertising and livestreaming will play a more important role in engaging consumers this year, since they have more than doubled the amount of time they spend consuming content. “This year getting sales is about pumping out content that is relevant, increasing top of mind awareness and upping the frequency of messaging – 2020 has been about really driving consumer-brand engagement,” she said.