Black Friday, which originated in the US, has become a feature of South African retail. It is a vital period that marks the start of the festive season.
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. However, in the mad rush things can, and do go wrong, which means a solid data strategy is non-negotiable.
Black Friday 2024 is a good time to reflect on how retailers can shift from being on the back foot to using the period as a successful launching pad.
Those that enjoy the promise and potential of Black Friday promotions have one thing in common, they work with reputable data partners and implement a well-governed, secure data platform.
They learn the right lessons and make correct, data-driven decisions to improve performance during the Black Friday period.
A few retailers, who have successfully implemented robust data platforms and processes with data specialist partner Insight Consulting, have shared their experiences on how to effectively manage Black Friday campaigns. Key themes emerge, each with the effective management of data front and centre.
Data-driven forecasting
First, there needs to be accurate data-driven forecasting. Here, retailers rely on historical data to predict future demand, and this is crucial for extraordinary periods like Black Friday.
Shaun Michaels, head of Data at Bash, says:
“Data is the cornerstone of our planning, monitoring, management, and decision-making processes. It empowers us to scale our business, roll out valuable features, and ultimately keep delighting our customers, even during the busiest times.”
He adds that the business’s app and web traffic, along with order volumes, soar to new highs over the Black Friday period.
Steve Pearson, head of Supply Chain at Retailability believes data is fundamental to accurate forecasting.
“How can you do any forecasting without data?” he asks, adding that the data they analyse includes: “Previous sales, transaction attributes such as promotions and markdowns, top-line budgets to be met, and more. We check previous Black Friday trends, and then factor in pay days, as well as the nature of the promotions used previously which determine the uplift”
Muhammad Omar, director at Toys R Us says their business uses historic item trend analysis and Black Friday item sales history to forecast accurately, and Jennalee Callister, Merchandise Manager at Toys R Us adds that they “Assess current stock levels and compare it with historical sales data to determine optimal stock levels.”
Inventory optimisation
As all retailers would know, the Black Friday promotion period is crammed into a short space of time, making effective inventory management crucial. Here, successful retailers use data to determine optimal stock levels, allocate stock to different channels based on demand, and monitor real-time inventory levels.
“By reviewing turnover rates and current stock levels, data should be able to allow us to identify slow-moving items and determine to mark down or find replacements on lines that are moving above predicted sales rate,” says Toys R Us’s Callister.
Pearson says Retailability uses data for longer-term stock management, which effectively manages the Black Friday rush. “Inventory has a longer term view so it can’t be controlled on the day. It may determine what promotions we load if we want to get rid of certain stock, but we typically take a punt on certain stock for the season rather than build extra for Black Friday specifically”.
Real-time performance tracking
Real-time monitoring of key metrics, such as sales, revenue and conversion rates allows retailers to make timely adjustments on the day, while also optimising their strategies with an eye on the future.
Michaels from Bash says real-time data is essential for smooth running on the day. “Engineering, operations and marketing teams are glued to real-time dashboards during Black Friday. They’re actively monitoring our infrastructure and services, sessions, number of orders, sales values, margin and more,” he says.
This speaks to real-time decision making and how a strong platform, working off clean data, enables cross-functional collaboration. This intelligence informs strategies that are based on accurate, actionable insights.
Omar says that real-time data analysis is important in Toys R Us’s management of Black Friday. “We closely monitor our data to measure unit sales against forecast, value sales against forecast, sales by hour versus the prior year and Black Friday promotion items as a percentage of total sales for the day.” It is clear how these types of insights inform planning and decision-making for future successful Black Friday campaigns.
Customer feedback and analysis
If we appreciate that Black Friday is about more than just higher sales volumes for a specific campaign and crucial to attracting and retaining customers, then listening to them is non-negotiable.
By analysing customer feedback, retailers can identify areas for improvement to enhance the overall customer experience.
“Customer feedback is a very important data source that we actively utilise to identify pain points and improve our customer experience,” says Bash’s Michaels.
Omar says Toys R Us continuously analyses what its customers are saying via various channels to ensure a good customer experience, including “feedback from our operations team, internal audits, marketing channels, and CRM.”
