Given everything that’s happened during 2020, it’s no surprise that the upcoming Black Friday shopping period will be unlike anything that has come before. After all, the current global crisis has been changing consumer habits and purchasing trends for well over six months now.
With volatility comes opportunity. Many of them. Opportunities that, with the right insights, your brand can seize before the competition.
The one thing that won’t change is that Black Friday will still be the biggest shopping event of the year for tech and durables in many countries, particularly across Europe and the Americas. In 2019, we saw growth rates of 6% in Germany and even 12% in Spain compared to the previous year, which shows that consumers are increasingly motivated to buy in this peak period. Our forecast for the global tech and durables markets for 2020 is a stable 0% growth compared to last year. Such resilience was not on the horizon some months ago and the continued recovery came as a surprise for many.
And as economies have adapted to the new normal and recovered around the globe, people have continued to shop. The fundamental attitude to promotions like Black Friday hasn’t changed in 2020 – according to GfK’s FutureBuy study, for 42% of consumers globally, price is still the strongest purchase factor online, while in-store this is just 24%.
The anticipated decline in demand that many predicted has not eventuated and Black Friday still holds enormous potential for brands.
But there will be significant changes in buyer behaviour and trends.
The markets continue to be extremely volatile. And this uncertainty means that shoppers are switching from a ‘I want’ to a ‘I need’ mentality. In this crisis, consumers have urgent needs that they have to satisfy in order to cope with their new reality. So they are buying what they actually need, versus buying to fulfill their wishes as they might have done before the pandemic. As shown in the chart below, particularly obvious is this change of attitude with regards to sales increases in the IT and small domestic appliances category, both necessary purchases during this crisis.
The stay-at-home nature of the current crisis presents great opportunities in the coming promotional season for brands in home-related categories. For example, 69% of global consumers now cook for fun at home at least once a week. Products also suited to working from home will be in high demand — IT/office sales are soaring at a rate of 15% — as will entertainment, health and wellness products centered around home use.
Furthermore, there has been an increased demand for premium goods. Those not directly affected by the crisis, who still have solid employment but less opportunities to spend their money — for example, on vacations, or clothing they would ordinarily wear to the office — are purchasing premium goods at a higher rate. These untouched budgets present great potential for premium brands.
It’s not just what consumers are buying that’s changed, but also how. Consumers are leaning heavily towards online shopping, for obvious reasons. There has been a surge in online shopping, with pure online retailers growing by 33%. ‘Click and mortar’ retailers have been thriving even more: sales in traditional retailers’ online shops increased 88% YTD. Loyal buyers are trusting the online presence of their known offline retailers. This means that having an effective omnichannel presence will be even more important this coming Black Friday, as well as the online support that many customers expect when shopping online.
And with this preference for online shopping comes an opportunity to achieve more business through innovative, cutting-edge digital experiences. Brands will need to prioritize digitization if they want to continue to compete successfully throughout the Black Friday season.
How, why and what consumers shop this Black Friday will be different to previous years. But the huge scale of the event won’t change. Brands that want to succeed will need to monitor trends closely and frequently in order to capitalize on opportunity, mitigate risks, and outpace their competition.
PS – Want to know more about what to expect this Black Friday? Get all the insights in our on-demand webinar.