With many retailers now opening on Thanksgiving, Black Friday has morphed into much more than a one-day event. Joe Skorupa, Group Editor-In-Chief for RIS News, recently spoke with Supply Chain Nation as part of our Expert Insights series to share his views on Black Friday, Cyber Monday and other holiday shopping issues.
SCN: What will be the biggest surprises retailers will experience this Black Friday?
Skorupa: I think the biggest surprise is that Black Friday is losing its traditional meaning. It has a historical meaning that goes way back in retail, but it’s changing because so many of the retailers today are opening their doors on Thanksgiving. This changes the timeframe for measuring the impact, which is obviously now going to start on Thanksgiving. We’ve seen the major retailers move from opening up at a reasonable hour on Thanksgiving, at 7:00 p.m. or 8:00 p.m., to opening at 6:00 a.m. or 7:00 a.m. in the morning. This is naturally going to inspire the smaller retailers to do that as well.
So what does that mean for retail? The big surprise is that it’s going to convert the term Black Friday from a timeframe to a synonym for door-buster deals. Black Friday really stands for a shopping frenzy, and retailers want to generate that frenzy on other days as well. We have seen Walmart, for example, already begin offering Black Friday-like deals on their website. They’ve started their door-buster deals online as of November 1st. And Amazon, of course, cannot let anything go by without taking a competitive stance against it, or even leading it, so they are using the term Black Friday on their website as of November 1st and they will tell you what their Black Friday sales are at this point in time. So in my opinion, the big surprise is that Black Friday is going to be a multi-day event, a multi-week event, even a full month event, and that is taking place this year.
SCN: What will the impact be for retailers with so many now opening for Black Friday on Thanksgiving?
Skorupa: I think the interesting thing we have to take from this is how Thanksgiving has become a day where shopping has become an event on the traditional family agenda. And I don’t think this is in any way out of cultural bounds because shopping, after all, is a social event and families do it together. A lot of times when you have family gatherings around Thanksgiving and you have people coming in from other towns and states, and you have kids coming back from college, to do a social activity like shopping together is not unusual at all. It would be considered fairly normal. So I honestly don’t see much backlash occurring. In fact, I was interviewed last year by a newspaper who was anticipating a huge backlash and they were getting my opinion on what retailers were going to do when there was this big backlash against opening on Thanksgiving. I didn’t honestly see that happening and it didn’t happen—there was no backlash. I do understand there are some employees who are blogging against it, especially the 6:00 a.m. openings, but I think the retailers will work their way through that and find a way to incent or reward their employees. I don’t think you’ll see a backlash actually coming from shoppers. I think it’s just going to become another family tradition like football.
SCN: How will the continued rise in e-commerce and mobile commerce impact this holiday weekend? Will there still be a Cyber Monday?
Skorupa: I think that Cyber Monday is definitely one of the spikes that online retailers have tracked over the years, just like Black Friday for brick and mortar stores. I don’t see it going away as being a big spike in sales, certainly for online and mobile. But I do think, even historically, it has not proven to be the biggest online spike day. We have seen a day in December known as free-shipping day when there is a guarantee or an expectation that anything ordered by that time will be delivered by Christmas Eve, which makes everyone in a gift-giving mood feel reassured about placing their order. So that actually turns out to be an even bigger online shopping day.
I have something else that I want to note about mobile and online commerce. That is the fact customers don’t feel they are being well-served by retailers when they get their holiday promos, messaging and alerts. They actually feel like those are mass-blasted e-mails, ads or promos and are not personalized to their interests. I think that will be an important strategy for retailers once they get that right. I know there have been many tests where they have been able to personalize e-mails and promos based on customer preferences and the conversion rates jump from the traditionally very low, single figure conversion rates to being high into the double digits, as high as 60 percent in some cases. So I think that is going to be the big difference as retailers begin to create personalized and relevant promo offerings through e-commerce and global commerce channels.
SCN: Do most retailers have the right technology to take advantage of consumers’ shift toward online and mobile holiday shopping? If not, what are they missing?
Skorupa: I think they’re getting there. I like to think that responsive design is gradually moving its way to the mainstream of retail. Sophisticated retailers are ensuring that they design once and display on multiple devices through responsive design. So when a shopper is sitting in front of their TV watching the football game using an iPad or smartphone to access a retailer’s site, they’re getting a good shopping experience that is actually designed for that form factor. I think a lot of retailers have a ways to go to make that happen.
Let me focus on one other thing as far as technology goes. It sounds like an easy thing, that it has been around forever, and yet we know that only 20-25 percent of retailers effectively offer buy online, ship to store. Part of the reason a lot of national retailers don’t offer that effectively is that it is truly hard to do. At least it’s hard to do cost effectively. You can do it and lose money, but retailers are reluctant to take that step, unless you are Amazon. I think that is one type of technology that mainstream retailers don’t have today. If they think about their most valuable customers, and those are multi-channel customers, if they can serve those customers better and get the technology to offer order online and pick up from store effectively, I think that is one area where they could seize the opportunity and grow their businesses for next year.
SCN: Thanks for those great insights, Joe, and thanks to RIS News for always keeping us up-to-date on the trends in retail.