November is increasingly a crunch-month for retailers with online sales such as Click Frenzy, Black Friday and Cyber Monday embedding themselves in the consumer and merchant mindset.

Add to that the global impact of Singles Day in China and it’s easy to see why the month is such an important part of the retail calendar.

Centring around the Thanksgiving holiday in the US, the next wave of sales kick off with Black Friday on November 23, followed three days later by Cyber Monday. In the US, Adobe is predicting sales across the weekend will reach $23.4 billion.   

Aussie retailers are also expected to participate, as the festival continues gaining traction among Australian shoppers.

“The uptake from consumers on sales events such as Click Frenzy, Black Friday and Cyber Monday has been phenomenal, and there’s no sign of this slowing down,” David White, Deloitte’s lead retail analyst told Which-50.

Amazon is promoting the Black Friday Sale which runs from November 23, 2018 until November 25, and is promising new deals every hour. And while Australian shoppers are no longer able to buy from Amazon.com, Amazon has launched a ‘global store’ which allows Aussies to access US deals. [Update 22/11/2018 Amazon has reversed its decision to block Australian shoppers from Amazon.com].

And Kogan.com is getting in early with a “Black Friday Week” sale that’s already underway.

According to figures from Australia Post, in 2017 Click Frenzy sales were up 14 per cent year-on-year and Black Friday and Cyber Monday grew by 27 per cent.

Ben Franzi, Australia Post General Manager Parcel & Express Services/Intermediaries, says the November sales drive online volumes for merchants by as much as 30 per cent. He expects the trend to continue this year.

Online volumes typically begin to increase in November and continue to increase throughout December where we expect to deliver more than 2 million parcels in a 24-hour period on our busiest day before Christmas.”

Last year registrations for Australia Post’s US freight-forwarding service Shopmate increased by 67 per cent in November compared with the same period in 2016.

“Considering Black Friday and Cyber Monday originated in the US, Shopmate registrations are a good indication of Australians looking to find global bargains during the sale. But in recent years, we have seen more and more Australian retailers participate in Black Friday and Cyber Monday, so Australian shoppers can also access heavily discounted items locally as well,” Franzi said.  

In 2017 the Thanksgiving day weekend created a spike in transactions across Square’s network. According to data released by the payments company, Saturday November 25 was the biggest retail trading day for retailers using Square to process online and in-store payments.

Turnover in November was 57 per cent higher than their average monthly trade. And December is busier still, with revenues increasing 73 per cent. 

Data from SEMrush shows interest from Australia in Black Friday sales has increased steadily. In four years, the number of searches across Google, Bing and Yahoo has risen from 90,000 to 300,000. Despite this growth, Australian sale Click Frenzy still attracts more interest than the US sales, according to search data.

Source: SEMRush

According to data from SEMrush the most commonly searched phrase relating to Black Friday was “What is Black Friday”.  

Source: SEMRush

Discounting Dilemma

Sales pose a new set of challenges for retailers. They need to manage stock levels and customer service without collapsing their margins. Then there’s the risk of turning customers into sale-only shoppers, who hold out for the frequent discounts. Don’t participate and they could be leaving money on the table as shoppers go elsewhere.

Deloitte’s David White says for some retailers the sales are an opportunity to clear specific stock items and boost top line growth. “However, increasingly consumers are using these sales periods to shop for specific brands or products rather than just what’s available – further shifting the power from the retailer to the consumer.

“Undoubtedly sales events like Black Friday in the lead up to Christmas will shift some sales from December to November. But more importantly, it’s a great barometer for retailers to see how strong consumer spending is in the run up to Christmas, and therefore how aggressive they might need to be in terms of their discounting strategies.”

According to Deloitte’s 2018 Retailers’ Christmas survey, 62 per cent of retailers will be discounting to help drive sales, but most only after 25 December.

“Discounting will remain an important Christmas sale strategy, with more than 60 per cent of retailers planning to discount, and a further 21 per cent still to make a call on this front,” White said.

“Importantly, they are looking to hold strong on pricing this side of Christmas, with lower pricing only on the agenda as part of Boxing Day sale strategies.”

The report notes this strategy is highly dependent on customers being enticed by great products and customer service, be it in store or online, that is personalised and convenient.

“However, with customers choosing to shop later and later each Christmas, aided by improvements in online offerings as well as faster and more reliable delivery services, retailers look set for a nervous first trading week in December,” the report states.

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