South Africa’s interest in Black Friday has been higher this year than during any of the three prior editions, according to research from the Bureau of Market Research.
Over and above this, a recent news article said the annual discount bonanza would boost the economy to the tune of R88bn, comprising what its source says includes R22-billion from direct retailer revenue, R28-billion in indirect economic impact, R32,1-billion from the wholesale sector and an another R6,2-billion in fuel sales.
That’s a lot of payments in a fairly short period. Black Friday is no doubt a highlight of the retail calendar. However, it is no longer a day.
In many cases it has expanded to Black November. Beyond this, looking at trends in the sector, there’s a spillover now between November and the classic festive season.
This means that the last quarter – especially for retailers selling bigger ticket items such as appliances – is a peak period where under-pressure consumers are waiting for the end of the year to look for bargains, either in the form of Black Friday deals or Christmas specials.
This bottleneck puts pressure on retailers to carefully manage an array of moving parts, all while trying to uphold a positive customer experience.
In a dynamic retail environment, with so many considerations from supply chains to fulfillment, an omnichannel payment platform managed by a specialist partner shouldn’t be one of the things stressing retailers.
It should already be fully under control, freeing the business to work on its business: delighting customers so it sells more inventory.
Imagine the following scenario, which is a real-world example: Someone goes online and sees a good deal for a dishwasher. It falls within a set budget and so the customer makes an online purchase.
The customer, who doesn’t live in one of the major hubs, accepts that delivery will take a week or more. If the payment doesn’t work, the customer can, and will, go elsewhere. Game over.
However, in our scenario, payment goes smoothly. Then, just before the item is meant to be delivered, the customer is contacted and told the business cannot fulfill the order as there is no stock.
The customer is offered a credit or a refund, which is extra admin. If refunded, when will he get his money? And what if he does not want credit on his account because he is irritated with the retailer? In this scenario, which did in fact happen, the customer was so disappointed he vowed never to support the retailer again.
It is clear that payments are fundamental to customer experience, and why that aspect needs to run efficiently, because retailers have far more to consider.
Stock issues happen, we all know this. The customer in our scenario, who is a reasonable person, knows this too.
However, he was angry because the communication was not timeous, and he was not given other options. It is entirely conceivable that had the retailer made other options available in lieu of being unable to fulfill the order, the customer may well have decided to top up the payment with a few hundred rand and choose another brand.
He would have remained a customer with a good experience, feeling that the retailer was both transparent and making an effort to attend to his needs.
During peak periods such as Black Friday or the festive season, customer experience is, arguably, even more important than during normal periods.
Besides the increased volumes, the actual discounts are a great opportunity to bring new people into the store or onto the ecommerce site.
This means that beyond margin pressures for retailers, they face the risk of customer blowback because of increased demand on the value chain.
And so, all through the year and especially during peaks like Black Friday, retailers need to be able to pre-empt stock demand, manage the supply chain accordingly, monitor real-time data to make adjustments as needed, and – importantly – provide alternative options for customers. If there’s no stock, the retailer must know this in real-time and give the customer a plan B.
There needs to be a strategy to retain the sale, and even possibly upsell. This is especially true with big ticket items because they’re not impulse buys but a conscious purchase decision resulting from a need and the means to afford one.
This concept is taken further – a conscious and planned decision to buy a TV may well be followed by an impulsive decision to add a sound bar because it is presented as a good special, and is related to the primary purchase.
The customer journey is crucial. Businesses already know this, and the ones that fare better have invested in good technology platforms to continually improve the customer experience. However, underpinning an improved customer experience strategy is a seamless, reliable, omnichannel payments ecosystem.
Payments are one of the key areas of friction and potential breakdown in the customer experience or value chain.
If a customer cannot pay because his card does not work, the bank is not available or the website is down… that sale is lost. This is a basic housekeeping, hygiene factor.
Businesses have so many other things to consider, such as delivery times, stock availability, consumer choice patterns, various fulfillment options and different pricing and promotion strategies, that payments really should be taken care of as a fundamental pillar so they can focus on attracting and retaining customers along every step until a purchase is made, with full confidence the payment will work.
The route to achieving this peace of mind – and the space to innovate elsewhere – is to seek out a trusted payments advisor that has been around the block, has a robust product and services stack, has scale, and can deliver near 100% uptime.
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