Year after year, we have seen that when it comes to maintaining end-user experience during the holiday season, preparation is key. But this year promises to be different, there has never been a time where digital-first was so imperative to the survival of most retailers. The drastic changes brought in by COVID-19 is bound to have a significant impact on the holiday season. Black Friday 2020 might as well be the benchmark for DEM going forward.
In this post, we take stock of current retail trends and examine the results of our recent eCommerce Survey to understand what Black Friday might be like this year, and reinforce why retail companies need to have a comprehensive DEM strategy in place.
Navigating the New Normal
COVID and the ensuing lockdown has exacerbated problems for many traditional retailers, which were already in play prior. Analysts at UBS are forecasting the closure of 100,000 retail stores by 2025 as a result of coronavirus. They predict that as eCommerce sales continue, brick and mortar clothing stores, consumer electronics, furniture, and grocery stores will bear much of the impact.
The amount of revenue at stake for the global retail and eCommerce industry between October 26th and November 30th for global retailers has never been more uncertain and major retailers are reacting cautiously.
Catering to Growing Demand
New data from NRF’s Spring Consumer view shows how the pandemic has shifted the priorities of all baby boomers (roughly between 56 to 74). Almost 45% say that they’re shopping online more often due to the pandemic. Buy online, pickup in-store (BOPIS) has become a go-to for this group and consumers are also embracing delivery services in larger numbers than ever.
How significant will the impact of this trend be during Black Friday? Retailers need to ensure omnichannel infrastructure is set up and consider making convenience enhancements to checkouts to facilitate easy transactions for the new breed of online shoppers. You can’t afford slow page loading time or a credit card processing error with new customers, whether they’re tech-savvy or not, who is only the click of a button away from your competitors.
For Grocery and Household Goods, Every Day is Black Friday
Another significant shift in consumer behavior during this period has been in grocery eCommerce, which is the fastest-growing product category online. NetElixir reported a 183% surge in online grocery sales between March 1 and 25 vs. the same period in 2019. A survey by Deborah Weinswig’s Coresight Research signals that online grocery sales stand to surge around 40% across 2020. For this sector, not traditionally a digital-first one, every day is now Black Friday.
For eCommerce and household goods retailers, as well as those across markets, it is worthwhile to invest now, ahead of Black Friday, to ensure digital storefronts are always open and sites are optimized for performance.
Amazon Prime Day Moving to October?
Speculation is rife that Amazon Prime Day will be moved to October. What might the impact of a three-month delay be on Black Friday? It brings one of the year’s busiest shopping days significantly closer to the start of the traditional holiday period in November. According to Business Insider and CNBC, Amazon has suggested to third-party sellers they use the week of October 5th as “a placeholder date” for Prime Day promotions and coupons, although it cautions the exact date hasn’t yet been announced.
By pushing Prime out to mid-to-late October, the four most profitable days for digital sales for the retail industry could occur within thirty some odd days of one another (Prime, Singles Days, Black Friday, Cyber Monday).
Walmart to Close its Brick and Mortar Stores over Thanksgiving
Walmart also recently announced its plan to close retail stores on Thanksgiving, marketing it as a “thank you” to associates. Experts say that keeping physical stores closed is a smart strategy, allowing Walmart to manage crowds and simplify its holiday strategy in this unprecedented year. In 2019, Walmart saw strong in-store foot traffic, bucking an overall trend of shoppers moving online, so it will be interesting to see how the decision to close physical stores will impact is online numbers significantly.
Retail Companies are Starting to Plan and Test Earlier than Usual
Over a hundred IT managers took part in Catchpoint’s 2020 eCommerce Survey. The study examined the changes that eCommerce companies are making to their annual preparations for the holiday shopping season and the impact of the Coronovirus pandemic.
Typically, retail companies start to plan and test in August; however, 58% said COVID-19 has forced them to start planning and testing earlier than usual.
As Deborah Weinswig, founder of Coresight Research recently told the LA Times, one of the ways in which retailers might be able to dig themselves out of “the greatest crisis we will hopefully see in our lifetime” is to start preparing now for the all-important Christmas sale period. “If retailers are focused on that, I think we do see fewer bankruptcies and less permanent store closures.”
Code Freeze Moves Earlier for Many Retailers
October is also a time when most retailers have entered or are about to enter code freeze as they enter the final stretch in preparing for holiday shoppers. 35% of respondents to our eCommerce survey said they enter code freeze in September and 27% said they halt all major changes to their site in October.
Digital-First or Hybrid?
Back when brick-and-mortar stores were receiving steady foot traffic, retailers were able to take their time working out the best strategy to move online. As our CEO, Mehdi has written about recently, an entire class of retailers have known they need to move into eCommerce for years but have dragged their heels. The pandemic has forced businesses to become digital-first, almost overnight.
At companies Catchpoint has been speaking with, digital initiatives that have been talked about for a long time, such as automating fulfillment, enhancing digital ordering, and integrating loyalty programs across channels are now being fast-tracked. Retailers expect “the new normal to be digital-first or hybrid.”
For those retailers that have or are rapidly accelerating their digital transformation efforts, it is worth asking, are you confident your on-the-fly digital makeover will withstand Black Friday traffic levels?
97% of respondents to the Catchpoint eCommerce Survey said their peak holiday traffic is higher than non-holiday ordinary traffic with 52% saying it is significantly higher and 24% extremely higher.
The high traffic volume creates a number of pain points during the holiday shopping season such as slow page loads (72%), high bounce rates (50%), inconsistent performance issues (50%), and functionality not working as expected (50%).
With sharp increases in traffic and transaction volume, eCommerce companies need to ask questions of the entire supply to service delivery chain to ensure you’re ready to handle a surge of customers this holiday shopping season.
Ensure Performance with Catchpoint’s Black Friday Assurance Program
We have seen how essential it is to prepare for the Black Friday/Cyber Monday period so that your websites and applications can get through it without a hitch. This year, with so much at stake, it’s worth beginning your steps on that journey today.
The Catchpoint Black Friday Assurance program is moving into its third year. From November 20 – December 4th, our Black Friday assurance team of experts will be working with our customers to set up, manage, and monitor their websites and applications 24/7. The deadline to sign up is October 31, 2020. Our goal is to ensure your sites and apps are optimized for performance to protect your customers’ shopping experience during the most important days of the year.