For years, experts have pontificated over which mega-sale day will dominate retail profits: Cyber Monday or Black Friday. However, that debate no longer seems relevant. Today, Black Friday deals exist online and in-store, and neither promotion lasts only a day or two. The distinction between Black Friday and Cyber Monday is fuzzier than ever, but the difference between online and in-store shopping is real.
In the second gifting season since Covid struck, consumer shopping behavior, supply chain, and reverse logistics trends mean retailers must prepare to handle the various challenges across channels. Those who navigate the new normal will drive greater profits and build consumer loyalty along the way.
Black Friday vs. Cyber Monday Then and Now
Holiday sales weren’t always so complex. Since the term was first coined in the 1960s, Black Friday enjoyed decades of unencumbered dominance and simplicity. Starting from Thanksgiving day afternoon, hordes of Americans flocked to stores to grab the best deals on items ranging from electronics and home goods to jewelry and apparel. Those were the good ole days for brick and mortar until Cyber Monday came along in 2005.
Over the years, Cyber Monday and Black Friday have vied for supremacy, but that all changed in 2020 when the point became relatively moot. As a result of the pandemic, a record-breaking 100 million consumers shopped online, while millions of fewer people shopped in stores Thanksgiving weekend. As a result, retailers quickly rolled out online deals that launched weeks in advance, in some cases. The swift transition increased Black Friday profits by 21.6% year over year. With $9 billion in sales, Black Friday became the second-largest online spending day in the US, next to Cyber Monday, which reached $10.8 billion.
2021 Record-Breaking Predictions
Last year, due to Covid, most retailers closed stores on Thanksgiving Day for the first time in over a decade. While some offered in-store Black Friday sales, consumer turnout significantly waned compared to years past. Some retailers offered simultaneous in-store and online deals for an entire month. Walmart and Target started showcasing Black Friday events days before Thanksgiving, making it unnecessary for shoppers to line up on the big day.
Closing stores served a necessary purpose in the height of the pandemic, but it yielded an unintended consequence– shoppers got a taste of freedom from crowds, and now they don’t want to go back. goTRG’s data shows that long lines are the number one biggest hassle for people during the holiday season. To avoid lines, they prefer to shop and even return gifts online. As a result, Black Friday joins Cyber Monday by taking place predominantly in the digital realm.
Additionally, both holidays will see their most significant sales occur throughout the weekend, rather than on the advertised date. This year Adobe predicts Cyber Monday’s Monday sales will draw $11.3B while Black Friday’s Friday sales will drive $9.5B. However, Saturday and Sunday are expected to attract $36B in total online revenue, accounting for 17% of the holiday season. Weekend sales across Black Friday and Cyber Monday have grown an incredible 35% in the last two years!
Generally speaking, the record-breaking sales expectations is great news for retailers. However, due to widespread supply chain issues, labor shortages, and shipping delays, retailers must work harder than ever to prepare their online and in-store strategies with the right product mix, resources, and policies to overcome customer hesitation. At the same time, they must deal with significant Covid related issues that put a damper on this peak gifting season. According to goTRG’s data, 85% of Gen Z consumers say they’re going to shop early to avoid supply chain issues, and over 55% of all respondents say they plan on skipping Black Friday and Cyber Monday altogether.
Consumer Expectations for Black Friday and Cyber Monday
- Product mix
Apple AirPods stole the spotlight last year, led by Walmart, which offered some of the lowest rates of the season ($169). AirPods will likely continue dominating the electronics category, but they may share the spotlight with Google’s Pixel Buds A-Series and Amazon’s new Echo Buds this year. Last year, other top-selling products included Apple Watches, Lego sets, HP Laptops, and Samsung and TCL 4K TVs. Tech products were among the hottest selling items and will remain in demand this year for both Black Friday and Cyber Monday.
64% of consumers in a recent goTRG survey said they planned to focus on electronic gifts followed by apparel (59%), toys (43%), and home furnishings (35%). Given supply chain issues, many consumers told goTRG they’re ditching physical goods and opting for gift cards instead.
- Free shipping
Most shoppers look for free shipping opportunities all year-round, but they expect it on Black Friday and Cyber Monday. Free shipping is such a strong purchasing incentive that most retailers this year will leverage it to get more sales. In fact, retailers typically drop the minimum order value requirements for free shipping by 8% during the holiday season, offering peak deals on Black Friday and the day after Christmas. However, customers may not always utilize the free option this year due to worries over shipping delays. Instead, those who didn’t already purchase in advance may pay to guarantee their items arrive on time.
- Easy returns
Most of the time, customers love shopping online and prefer returning items in-store. In fact, 45% told goTRG earlier this year they were ready to ditch e-commerce returns altogether and go back to stores despite Covid risks. But during the holidays, that all changed. According to goTRG’s latest holiday survey, 60% of Gen Z and Millennial shoppers said they prefer to ship online returns rather than deal with in-store lines this year. At the same time, they recognize that shipping items back takes a bit longer than driving to their local stores. So consumers expect retailers to make it easier for them. Over 80% of respondents to a new survey from goTRG said that retailers need to extend their returns window.
How Retailers Are Preparing
- Dark spaces
The exponential growth in digital sales has forced retailers to disrupt their entire forward and reverse logistics infrastructure to fulfill orders and returns. As a result, some retailers transformed storefronts into “dark spaces,” or warehouses specifically for online order fulfillment and returns processing rather than forward sales. Dark stores are especially helpful during the holiday shopping season because they allow nearby customers to receive same-day delivery or pick-up and reduce total shipping requirements.
- Fewer toy deals
Toys are extraordinary popular holiday gifts for clear reasons. But supply chain and shipping issues mean retailers may not have ample toy stock to offer widespread Cyber Monday and Black Friday deals. That means customers will have to work harder to find the sales if they can even find the toy itself. Nearly 60% of shoppers told goTRG they’ve encountered out0of-stock messages when looking for items this holiday season.
- Extended sales duration
Even before the pandemic, retailers started to extend Black Friday and Cyber Monday deals. Now, facing the reality of shipping delays and labor issues, retailers are announcing sales even earlier this year. In fact, Walmart’s deals are going on now, and Kohl’s is launching sales starting November 21st! The traditional mad rush is officially a thing of the past, replaced by the need to get products in customers’ hands by any means necessary.
- In-store and curbside pickup
Free shipping and, specifically, on-time delivery may not always be available this year. But retailers who leverage large physical footprints will offer something even better–free in-store and curbside pickup for online orders. With buy online pick-up in-store options (BOPIS), retailers can alleviate their supply chain and avoid disappointing customers with late arrivals. Plus, contactless pick-up options are desirable to customers with covid related concerns. Last year 20-25% of all online orders were fulfilled through curbside pickup, and this year will be no exception.
The bottom line
Black Friday and Cyber Monday are two terms that cover a broad spectrum of overlapping deals. Ultimately, Cyber Monday now mirrors Black Friday (and vice versa) in terms of its offerings, duration, and consumer expectations. Especially now, as stores announce Thanksgiving day closures, the push for online shopping and returning is even greater. Now it’s up to retailers to deliver a seamless omnichannel experience that offers a variety of great deals, in-store pick up wherever possible and on-time delivery.