How COVID-19 changed Black Friday
16 December 2020 | Written by Marco Pastore
The most iconic moment of the year for the retail sector is upset by the restrictions imposed by the pandemic. Let's see how and with what consequences for the future of shopping
Online shopping is now one of the most consolidated trends of recent years. Just think that in the period 2014 – 2019 alone, the world market for internet sales went from 1336 to 3535 billion dollars, an increase of over 260% (and a figure that corresponds to almost double the entire Italian GDP).
The largest companies in the e-commerce sector (Amazon above all, but also eBay, Alibaba, Etsy, Farfetch, Yoox, just to name a few) have greatly benefited from this positive trend that has brought the value of their shares to levels never reached. before.
Despite this, Black Friday remains (or perhaps it remained) the symbol of offline shopping, with queues at the opening of shops, races between the shelves, and the search for the best opportunity to grab what maybe you couldn’t. allow during the course of the year. However, Covid-19 has also changed this day, to the benefit of the data economy.
Black Friday 2020: the numbers. This year nothing has been the same as before. Large physical store chains such as Walmart have invited their customers to stay at home and take advantage of the offers offered on their e-commerce. Other stores have made available some of the usually most sought-after products (such as the coveted PlayStation 5) only online and have activated collection points that can be reached directly by car, so as to avoid the creation of crowds within their stores. The result, according to the results of Adobe Analytics (1) for the United States, was an increase of as much as $ 9 billion in online sales, a growth of 22% over the previous year.
American consumers spent an average of $ 6.3 million per minute online, which is about $ 27.50 per person. Black Friday 2020, once the data is confirmed, will become the second day ever with the highest daily online spending, beaten only by Cyber Monday 2019 (pending data on Cyber Monday 2020).
Paradigm shift taking place? Looking more closely at the sales data, what is most surprising are the results recorded by all those types of products that were traditionally purchased in physical stores. The purchase of food during Black Friday, in fact, grew by 397% compared to the average in October. Personal care products saw an impressive 556% increase while pet products saw a + 254% increase.
We cannot know if, once the pandemic is over, these figures will drop or remain at these levels. It is reasonable to think, however, that this Black Friday in a forced online version has given acceleration to the trend of internet sales, which are expected to grow by a further 55% in the next 3 years.
But the internet obviously means data. By browsing the e-commerce, we give a myriad of information to companies that can, for example, a record which products we have consulted and compared before proceeding with the final purchase, or how much time we spent on the product page before purchasing it.
In a context of large discounts such as that of Black Friday, the algorithm, however, could have been enriched with one more information: an index of how effective promotion is in directing people’s purchasing choices (what economists call elasticity of demand at price) thus leading him to understand even better the mental process on which the consumer bases his purchases and to categorize it accordingly.
The amount of data recorded on the occasion of this Black Friday is therefore powerful and highly informative. Just imagine the number of people who have accessed the e-commerce of their trusted stores for the first time or all those consumers who have browsed through various sites, browsing through catalogs, read technical data sheets, but then abandoned browsing without buying anything.
All of this data together generates a substantial added value for those who own it and probably the information collected during this Black Friday online version can already be used to make new marketing campaigns more effective in view of Christmas.
Is there something new in all this? Actually no, in the sense that this is exactly what already happens when we decide to sign up for a points card in any supermarket. Through the card, in fact, the store can record our purchase patterns: how often we buy a product, how much we are inclined to give up our favorite brand if a discount is applied to a very similar product, and much more.
The only difference is that in “traditional” shopping, through the subscription of the card we are guaranteed prizes or exclusive promotions while browsing online, in most cases, we actually give this precious information to the managers of the web platforms.
This is the real paradigm shift. The consumer is becoming an integral part of the value creation process for the producer. Through the data we make available on a platform, in fact, we are increasing the value of the platform itself. Through feedback, reviews, and all the other data we disseminate while browsing, we are involuntarily enriching the managers of these online spaces by revealing our impressions or preferences, our emotions. How can this dynamic be re-balanced in favor of consumers?