What can we expect from Black Friday in 2017?Back to overview
Dr. Jens Koerner, CEO of the ad pepper media group, explains how Black Friday really was a dark day for some in 2016 and talks about the lessons advertisers are likely to have learned from this for 2017.
As it turns out, the original Black Friday was actually a Thursday. On 24 October 1929, the stock market on Wall Street in New York began to plunge. At around noon, anxiety gave way to panic, and the frenzy to liquidate began. On the following Friday, 25 October, when the crash had reached the European stock exchanges, the Dow Jones continued to plummet, trading collapsed several times as everyone scrambled to purge their stock – at any price.
On 25 November 2016 we saw another black Friday – in two regards: Black Friday, which originated in the USA and is the Friday after the Thanksgiving holiday (always the fourth Thursday in November), is traditionally taken off as well and considered the first day of the festive shopping season. Black Friday was invented in the 1960s to stimulate consumption in retail stores. Today, it has become a global event that continues to break records in the e-commerce sector as well.
American online shops began rolling out their special Black Friday deals in Europe in 2010. But it wasn’t until 2013 that Black Friday became a truly noteworthy event in Europe. “Walmart’s Black Friday by Asda” in the UK is generally considered to be the starting shot. At first, special online sales were only available on Cyber Monday (the Monday after Thanksgiving). Since then, however, Black Friday has become the unrivalled day for online bargains, with online shoppers clicking with a vengeance all weekend long.
Last year around 1 billion pounds was spent on Black Friday alone in the UK. In Germany, the 1 billion Euro record was broken for the first time, though sales could arguably have been much higher, as Black Friday experienced its own black Friday of sorts last year.
As expected, 25 November 2016 started off with all indicators shooting through the roof, and online retailers thought they were well prepared for what was to come. And it was true that there had never been so much traffic, never so many bargain hunters ready and waiting for the virtual floodgates to open. But in the course of the morning, the first websites had already started crashing or were only able to offer a limited service. Currys PC World, GAME, Macy’s and several cashback sites are just a few of the examples. It didn’t take long before negative reactions began coursing through social media, some of which were quite harsh. Frustrated customers vented their dissatisfaction and proclaimed that they would avoid the affected providers in the future, and urged other users to visit the online shops of competitors whose online services were still working properly. The lion’s share of online retailers weren’t affected on Black Friday, and e-commerce transactions were processed smoothly. Still, the crash was a veritable disaster for the companies that did experience problems – a “dies ater” (black day) which not only led to considerable sales losses, but also threatened to drag down the companies’ reputations, too.
From Black Friday to Black November
The importance of Black Friday for the entire online retail sector is reflected in the data provided by the affiliate marketing network Webgains (see chart below). The sales peaks at the end of the month are obvious. As mentioned, Black Friday fell on 25 November last year. More than 10 percent of the total e-commerce volume for the month of November was turned over on this day. A very similar pattern can also be observed for the previous year on 27 November 2015. In 2014, the spikes were much flatter; in 2013 the curve was even completely flat – a clear indication that, , as a major event in the world of online retail, Black Friday is still a rather young phenomenon, and is likely to be at the beginning of a more dynamic development.
As pleasing as this development is overall, it also demonstrates the problem already discussed above. Vulnerabilities or holes in the IT infrastructures of online retailers or even hacking attacks during the critical phase, i.e. the final ten days of November, can sometimes have serious consequences. Around half of the month’s sales are
generated during this period, and around 15 percent of all annual e-commerce sales is generated during the month of November (both figures according to data from Webgains’ affiliate platform). It can be assumed that most online shops have experienced similar trends. The relationship is likely to be even more significant for new, fast-growing and/or highly seasonal e-commerce companies.
This is why, for some time now, companies running online shops have been working to develop strategies to reduce this dependency on late November sales peaks and even out their sales performance well beyond the traditional “Black Friday season”.
Webgains affiliate platform: November e-commerce sales (in EUR mill.)
If you observe e-commerce globally, the rather young phenomenon of Singles Day in China has already brought about a certain diversification among shopping events. Singles Day, or “Double 11”, takes place on 11 November. As a side note, the event was introduced commercially by Alibaba in 2009. Meanwhile, it has become the biggest sales day in the world, far surpassing Black Friday and Cyber Monday. It can be expected that brands and retailers will also become quite inventive in coming up with new shopping events, or, as an American investment banker recently put it: “Today is Cyber Tuesday. Tomorrow is Cyber Wednesday […] What started before as one day […] has transformed itself into a week, maybe several weeks.”
Add to this that more shops are offering “sneak peek” or “early access” deals aimed at diffusing the sharp edges around the peak sales days. Last year, for example, certain brands began launching their first deals in October during the days before Halloween with the aim of approaching customers and promoting customer loyalty well before the peak sales period had even started heating up.
Instead of focussing so intensively on the final weekend in November, the bargain hunting began as early as late October and continued until just before Christmas. Any longer would of course be impossible, as the purchases have to be delivered to the customer in time for Christmas. Similarly, Amazon spread out the temptations by offering customers its Black Friday sales for a total of 35 days – all the way through to 22 December last year. It can be assumed that this trend of stretching out online purchasing will take place again this year.
The trend should be embraced, as online retail can be equalised and spread out, while at the same time limiting the risks for the IT infrastructures of the various providers. It therefore remains to be seen whether the outages will be contained this year, whether online shops will do their homework and whether click-happy shoppers will be able to complete their festive shopping smoothly. In any case, Webgains is already preparing for the season and expects to break new sales records – and not just on Black Friday.
About the author
Dr Jens Koerner has been CEO of ad pepper media International N.V. since March 2017. The holding company of one of the most experienced international, listed corporate groups and, together with its subsidiary Webgains Ltd., has specialised in affiliate and performance marketing. In March 2017, Koerner also took over as sole chairman of the group’s executive board, where he was initially appointed CFO in 2006.
ad pepper media International N.V. is the holding company for one of the world’s most experienced listed business groups in the field of performance marketing. Founded in 1999, the Group has been listed in the Prime Standard segment of the Frankfurt Stock Exchange since 2000. With seven companies in four European countries as well as the USA, ad pepper media group delivers performance marketing solutions to renowned customers, including Samsung, Nike, Hertz, ERGO Direkt and Fiat. ad pepper media International N.V. consists of ad pepper media (lead generation), ad agents (performance marketing agency) and Webgains (affiliate marketing network). These businesses, along with the holding company, employ a workforce of 250 members of staff.