Black Friday has become an integral part of the South African retail calendar. With consumers rushing to find the biggest and best deals, many retailers view the event as a race to the bottom. However, in the fast moving consumer goods (FMCG) sector, Black Friday has evolved into a strategic investment of getting customers into the store ahead of the festive season.
Equally important is learning the right lessons and making correct, data-driven decisions to improve performance during the next Black Friday period. This makes finding and working with the best data specialists crucial, because in the FMCG space, Black Friday is not just about immediate sales, it lays the groundwork for long-term customer relationships. It's an opportunity to showcase a brand, test new products and gather invaluable data on consumer behaviour.
So, with an eye on extracting the most value from Black Friday campaigns, there are a few things retailers can do to learn the right lessons and improve year on year.
Black Friday analysis
This should happen immediately after Black Friday. By starting the performance analysis as soon as possible, the retailer ensures that any changes that need to be made to supply chain, marketing and advertising can take place well ahead of the next Black Friday. The retailer needs to analyse key metrics such as sales, stock uptake, supply chain performance, the financials and market sentiment as soon as possible. In a collaborative process between the retailer and the supplier, the retailer should evaluate the supplier’s fulfilment of the campaign through a scorecard index.
The retailer needs to learn how to effectively leverage the various insights platforms available, and take steps to ensure that these can be consolidated for a full picture. This enables far quicker and more insightful analysis and, importantly, meaningful decision-making.
Negotiation and product selection phase
Three to four months after Black Friday, the retailer should start negotiating with suppliers for the next Black Friday campaign. The business should leverage the insights it has gained through its analysis to identify a shortlist of products to underpin the next Black Friday campaign.
A strong data partner will help the retailer arrive at the shortlist based on a weighted distribution index that considers the diverse nature of the retailer’s customer base. It is important that the retailer engages in a transparent negotiation process with its suppliers. Accurate data insights are crucial as they provide both parties with a comprehensive view of the market. Remember, the analysis looked at, among other things, sales, the supply chain, the financials and market sentiment data. Decisions must be made using accurate data.
Black Friday planning phase
With about six months to go before the next Black Friday, retailers should be finalising the campaign’s product list with their suppliers. All stakeholders, from suppliers to manufacturers, to the retailer’s own teams, need to work together in a co-ordinated way, utilising a well-governed, secure platform.
It is important that the platform chosen has robust security measures in place to prevent data breaches, and if a breach were to occur, it must have the ability to quickly identify the source and take mitigating actions. The best platforms are living ecosystems where data is continuously monitored for any positive or negative drivers that could impact product selection and planning.
Real-time data management
Once all the planning is done, it is time for the big day, so to speak. If we consider that Black Friday is a strategic investment to get customers into the store for the crucial festive period, this is a make-or-break phase.
The retailer needs to leverage real-time data capabilities to closely monitor everything, from real-time stock levels to delivery delays or other issues, environmental factors and anything else that could impact the campaign’s success. The retailer can make quick, informed decisions to mitigate risks such as stock shortages or other technical glitches. This all ensures a seamless customer experience. Remember, you want customers to enjoy being in the store because you want them to come back.
Retailers need to closely track the financial aspects of the campaign, including redemption and rebate calculations, to manage the financial risks associated with Black Friday promotions. This is important if we are committed to learning the right lessons to make the right decisions for future campaigns.
Listen to market sentiment and understand customer behaviour
This is an ongoing initiative and not something that is reserved for peak periods such as Black Friday or Christmas Eve. An FMCG retailer should continuously monitor and analyse social media and other market sentiment data. A strong, consolidated platform can enable deep insights using advanced AI-powered algorithms to identify genuine customer feedback, while filtering out malicious actors or, to use social media lingo, trolls.
Working closely with specialist partners, retailers should understand the psychology of retail and create a pleasurable in-store experience for customers. This is fundamental to drive loyalty and repeat business. In this context, it is crucial in how Black Friday feeds into the critical festive season.
See a data partner as a strategic ally
Throughout the entire process of using data to learn lessons, plan for and manage Black Friday, an FMCG retailer should view its data partner as a strategic ally. It should choose a provider with a proven track record, an end-to-end solution and a focus on simplicity, cost-effectiveness and adaptability. A data partner’s ability to deliver fast insights, to seamlessly integrate data from various sources and to provide a transparent, well-governed platform is crucial to a retailer's Black Friday success and improving performance year after year.
Contact Insight Consulting today and transform your data into an actionable strategy for retail success.