What did we learn from last year’s retail performance?
The importance of Black Friday and Cyber Monday, and the value that these sales periods offer for consumers and retailers, has increasingly come into question in recent years.
The positive financial impact has become harder to quantify as many retailers start their promotions earlier each year and extend their sales to spread across the entire month. This anticipated sales period is an integral part of the overarching holiday retail season but the nature of the promotional event means that it attracts distinct audiences with different motivations and shopping behaviours. As a result, it is important that marketers in 2024 think and plan beyond Black Friday in isolation.
Starcount has explored the spend consumption trends in 2023 across hundreds of the UK’s leading brands from a range of retail categories – looking at both the winners and laggards – to advise how last year’s behaviours can help shape your brand marketing strategy so that you can tap into the in-market audiences throughout the promotional season.
What is the Black Friday opportunity?
Starcount’s Spendmapper data underlines the important role the Black Friday period continues to play in the retail calendar. Last year saw a significant increase in retail spend in the 4 weeks leading up to and including Black Friday & Cyber Monday which grew +17% versus the previous period, with spend peaking in the week of Cyber Monday at £5.7bn in retail sales.
This increase in spend is reflective of more consumers entering the market, spending more frequently, spending more per basket, and across a greater range of retail categories. This opportunity for brands doesn’t simply mean a larger size of the prize, it increases the number of purchase occasions that they can compete for and shoppers’ willingness to consider more brands and products.
However, there is not one universal experience for retailers and we find considerable differences between the behaviours across sub categories based on the types of customers who are shopping in this promotional period.
The top 10 fastest-growing categories in the Black Friday/Cyber Monday Period.
Who are the Black Friday/ Cyber Monday shoppers?
Early-Planning Gifters
When we examine the top performers we can see Children’s Retailers, Jewellers, and Beauty Retailer’s all growing around +50% in this promotional period as bargain loving gifters begin to hit stores in search of the best deals of the festive season. This sales momentum continues through into the gifting month of December but for brands in these categories, it is important to consider who your early movers and bargain shoppers are and what differentiates this shopper group. This can enable you to tailor your marketing to maximise engagement whilst minimising the cannibalisation of full-price customers you would see in December.
Treat Yourself
The Black Friday period appears to be even more important for the Electronics and Hobbies & Gaming categories as the strong double digital growth they experienced was only short term and was followed by a significant slowdown in December where their growth lagged behind the broader retail market. For these categories, there may be a greater proportion of purchases that are motivated by personal indulgences (over gifting), and it is important for brands to reflect this difference in the end recipient in your creative as you want your message to resonate and mirror the audiences’ shopping motivations.
Bargain-Loving Home Hosts
When we take a broader view of the performance of Homewares, Furniture and DIY stores across the holiday season it indicates that November is a key period for consumers who are purchasing big-ticket items and tackling those last major jobs as they prepare their homes for hosting and celebrations over the holiday period. A must win moment for brands in this category with a key objective to balance competitive pricing and profitable margins.
Buying directly from the brands they love
Whilst the Clothing category performs strongly through the holiday season, shoppers are especially on the hunt for Athleisure deals in November. What is particularly interesting is that we see a far greater propensity for shoppers to go brand direct around Black Friday, with the likes of Nike, Adidas, Lululemon, and Sweaty Betty seeing their market share peak. Whilst this is a significant opportunity from a sales perspective as it can increase brand revenues and margins, it crucially provides an unparalleled opportunity for brands to forge direct relationships with their customers enabling them to grow their future direct marketing reach and enable more effective tailoring of content. Brands interested in understanding more about their existing CRM network and getting the most out of their 1st party data can read about our approach to 1st party enrichment here.
The growth in spend with athleisure brands over the promotional period.
The Role of Online Shopping
With nearly a third of retail sales in November 2023 occurring online it is unsurprising to see high growth and outperformance from the major online native brands including ASOS, Boohoo, Shein, AO, and Very. This gradual trend has accelerated over previous years as consumer shopping habits evolved post-pandemic and with a greater proportion of shoppers working from home and adopting online shopping. Whilst traditional high street brands come into the ascendancy in December, it underlines just how important it is that brands offer a seamless and convenient digital experience on site and via apps to win around Black Friday/ Cyber Monday.
The race to the top
Whilst the majority of retailers are buoyed by the wider seasonal trends at the end of the year, only some retailers appear effective at capitalising on these trends to their full potential. For instance, Amazon goes from strength-to-strength throughout the holiday season whilst the likes of Argos, AO, Currys, and Very experience a significant slow down in demand in December. These brands may be leaving money on the table that they could compete for by adapting their marketing proposition to respond to the changes in the mix of in-market audiences and the evolution of their needs and shopping behaviours.
So, what are 3 things retail brands need to consider for 2024 promotions?
- By understanding the in-market audiences and how their respective needs evolve throughout the holiday season you can ensure that your brand can pivot and benefit from the surge of demand enjoyed by the wider category, competition or relevant adjacent categories.
- Optimisation across the holiday season is key – you need to ensure you understand how your audiences evolve and segment your targeting accordingly to maximise your engagement and profit throughout this key period.
- As consumers increasingly go brand direct during Black Friday brands need to ensure they leverage this unique opportunity to build up their 1st party data and position their marketing to deliver customers with a perceivable value exchange.
How can Starcount help you reach these in-market audiences?
Starcount specialise in building behavioural audiences for activation. Whether leveraging our clients 1st party data or using signals from our online and spend behaviours, we can locate and find the best audiences to target based on WHY they buy and their mindsets and motivations for purchasing. This means that you can build audience segments for Black Friday and Holiday shoppers, through a more holistic understanding of who your audiences are, and crucially have the ability to identify the best geos for you to target.
We can bring in a myriad of relevant metrics including overlaying spend related to your category, brand and competition, related interests and mindsets, or we can ingest your own 1st party data to help you create meaningful and impactful audience segmentations.
Finding the Electronics Sales Shopper
When we explore one of our Black Friday shopper audience segments – the Electronics Sales Shoppers – we find that these shoppers are more affluent than the average UK consumer and thereby command considerable buying power. This indicates that whilst this audience is price sensitive, and keenly focused on hunting down the best offers, it does not mean that they are looking for the cheapest product options. It will be the perceived value on offer, rather than the simply the price, which is going to be key and therefore brands need to be cognisant of the framing and price anchoring employed in their marketing.
Digging into their audience profile can also help us to understand the types of products that may particularly appeal. These shoppers are predominantly middle-aged, between 35 – 54, with a clear focus on health & wellness which covers the broad spectrum of physical and mental health, and provides an opportunity for retailers to promote their range of health-tech or health-enabling products.
In addition, we see a strong interest in, and spend on, home entertainment across movies, TV and gaming. We know that these shoppers are likely to have older children still living at home which will shape the role that electronics play in the household, acting as a focal point of family connection, as well as increase the appeal of propositions such as family plans and the likelihood of them buying gifts such as gaming consoles for their children. By building this understanding of your audience into your creative, tailoring it to their interests and lifestyles, brands can ensure greater resonance and drive engagement.
All of the audiences built within our Connect platform can be activated through a range of DSP platforms, including the Trade Desk, DV360, and Stackadapt, to ensure that your targeting evolves to reflect the changes in the in-market audiences.
Need help or want to discuss this further?
If you want to understand more about your brand’s audiences and performance during the holiday season, and how you can tap into this opportunity, please get in touch and we can arrange a call with our team!
Data Source:
Data periods:
- October (previous period) = 08/10/2023 – 04/11/2023
- November (Black Friday period) = 05/11/2023 – 02/12/2023
- December (Christmas period) = 03/12/2023 – 30/12/2023
