Our five guidelines for peak week sales planning and portfolio management
Highly volatile markets, unprecedented demand, supply chain disruption, and accelerating trends characterized consumer technology and durables markets in 2020. And Black Friday was no exception: For the first time ever, there was no year-on-year growth when comparing the peak week with the same week in 2019. Indeed, sales fell - 6%. The COVID-19 impact was certainly felt, but rather than slowing overall demand, it stretched it over a longer period. In fact, over the three peak weeks leading up to the event, sales grew 5% over 2019’s performance.
Whether you’re a manufacturer or a retailer, you will already be planning for this year’s Q4 peak weeks. And with uncertainty guaranteed, it is more important than ever to base your product portfolio management and peak season sales planning on reliable and up-to-date data and expert insight. To support you, GfK’s industry experts have drawn conclusions from last year’s Black Friday performance, and the latest consumer and retail trends to support your preparations.
Here are our five guidelines to drive sales performance in 2021:
Prepare for multiple weeks of promotions to deliver sales success Black Friday is no longer a one day or a one-week event, it has extended over three weeks – and more – of promotional activity and increased shopping levels. Every week matters and it’s important to understand how sales in those weeks relate to each other and the fluctuations in demand during this key time.
For instance, compared to 2019, last year sales increased by 19% three weeks before the event, and by 15% one week before. Sales in the week of Black Friday fell compared to 2019, but overall, the three-week trend was up. To ensure you maximize those peak weeks, it’s vital you anticipate when you’ll see the most demand and plan your activity and supply accordingly.
Make more of e-Commerce For the first time ever online shopping sales exceeded those made in stores during peak season 2020. In the week of Black Friday, e-Commerce accounted for 53% of all sales. We believe this trend is going to be even bigger in 2021 as so many new customers were converted to online shopping during the pandemic. In particular, the online shops of traditional retailers boomed and took the lead in the e-Commerce market. Make sure you understand the changing channel dynamics and shopping trends as part of your planning for Black Friday.
Reduce the number of price drops 33% of products were sold at a discount of 15% or more during the peak weeks of 2020 versus 41% the year earlier. Yet despite this reduction in the number of price drops, demand remained high. Expect this trend to continue this November as the strong consumer demand we witnessed last year flows into 2021.
Hone-in on “home” We believe last year’s very strong demand for @home to continue into 2021 and many of the top selling products will remain as strong as in 2020. In particular, shoppers will focus on buying IT to support working and learning at home as Home Office is here to stay beyond the pandemic. This will cement the need for small domestic appliances to help with eating and cleaning at home. But beware of differences by category: last year’s shopping sprees for items such as TVs to deliver entertainment at home will be at risk once out-of-home entertainment resumes.
Excel in meeting online shopper’s needs Your competitors will be innovating in the online channel – make sure you are planning to do that too. Social shopping is mainstream in China already with six out of 10 of consumers using buy buttons on social media. Now is the time to be researching new formats for your online shoppers.
From educational to social shopping to live events with influencers and celebrities, embrace the online channel to give consumers the experience and information they want. GfK’s Norbert Herzog says: “Innovation today is not just about products; revolutionize the customer experience and you’ll be rewarded with long-term sales opportunities throughout the year – not just during peaks weeks.”
Black Friday planning: Make informed decisions on what comes next
As the saying goes, “Nobody can predict the future; the idea is to have a firm grasp of the present.” This is even more the case today in unpredictable markets and in an environment where consumer behavior is changing rapidly.
When it comes to planning for Black Friday 2021, GfK has historical and up-to-date weekly and monthly sales tracking to monitor and make sense of whatever comes next. By evaluating what has happened, what is occurring now and closely monitoring the future, this is the essential intelligence you need to make the best business decisions to stay ahead of the market throughout the year and this peak season.
For more facts, figures and analysis on peak season planning, trends in retail and top-selling products, read our white paper “Against all odds: Successful sales planning for Black Friday 2021”.