Podcast

Retail Wrap-Up 2020: Will Black Friday ethics lead to retail innovation?

The second wave of the global pandemic is here and Black Friday is not going away. However, there a few Black Friday ethics for retailers and brands to consider in the midst of the 2020 holiday shopping season. Safety is top of mind for retailers across the country right now – not just how to keep consumers safe, but their associates as well, and the financial situation many shoppers are in, due to the pandemic, creates many challenges and ethical decisions to address. In this fourth holiday retail episode, Kristin Demel, Retail Strategy Director, talks with Joe Cox, Director of Communication Strategy, about the top three headlines for retailers and brands in the coming weeks:

  • Consumers are favoring in-store retailers that have the safety precautions in place.
  • Consumers are realizing they don’t have to be in the store to get Black Friday deals, and it doesn’t even have to be the day after Thanksgiving.
  • The financial impact of the economy right now has consumers seeking value now more than ever.

Learn more about what to expect on Friday, what consumers are thinking this year and how to find opportunity in the midst of change:

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Other podcasts in our Retail Wrap-up 2020 series include:


Joe:
Hi everyone, and welcome back to Uncovering Aha Podcast, devoted to transforming data into action that will inspire creativity and accelerate growth of our business and our brands. I’m Joe Cox, director of communication strategy at Callahan, and today we’re continuing our holiday 2020 wrap-up series, this time focusing on Black Friday.

Joe:
I’m joined once again by Kristin Demel, Callahan’s director of retail strategy, who is giving us an insider look into how retailers are dealing with the holiday shopping season in 2020 to help retailers and marketers prepare for what’s to come in 2021 and beyond.

Joe:
Hi Kristin. Welcome back.

Kristin:
Hi. I’m excited to be here. Thanks for having me on the podcast.

Joe:
For sure, so we’re here the week of Black Friday, known for big deals and even bigger crowds since, I think, in 1952, I looked up. Thank you for Wikipedia. This Friday after Turkey Day has for the last 20 years been known as the beginning of the holiday season and the biggest shopping day of the year. As someone that has spent their career in the retail world, what comes to mind for you when we talk about Black Friday?

Kristin:
Yeah. When you listed off some of those things about crowded stores and customers fighting that definitely comes to mind for me from a tradition perspective. I can remember being a young girl going out shopping with my mother, waiting in these long lines, and it was this family tradition. It always meant for us, that holiday season was upon us, and there was this pivot from fall into winter.

Kristin:
As a retailer and growing up in the retail world, there’s still that same feeling of chaos, but there’s this feeling of excitement. You spend months and months and months planning, strategizing around how you’re going to steal share, how you’re going to create new and compelling offers for consumers. Then there’s all the planning and the work that goes into just inventory management.

Kristin:
Do I have enough in the pipeline? Where am I going to place my big bets? What’s going to be my big item? There’s this other sense when I think about Black Friday, just about the adrenaline rush of the planning and placing big bets.

Joe:
This year seems to be a little bit different, meaning that we’re in this second wave coming of the global pandemic. Since March, things have definitely been shifting for us. I think the question for the podcast today is, yes, Black Friday, it’s not dead. It’s not gone away during the pandemic, but what we’re considering here at Callahan is what are those ethical decisions that retailers must address for this Black Friday, specifically? What is going through their heads?

Kristin:
I love that you call them ethical decisions, because I think top of mind for retailers and for everyone across the country is safety. That is definitely under that firm ethical banner, but then there’s also a lot of big questions that retailers are having to think through related to sales plans and what a consumer’s need and expect, and how do we help people have a great holiday season with all the change in the chaos that everybody’s been through in 2020.

Kristin:
Let’s start on that piece of you’re right, we’re in a global pandemic and having a bunch of folks in one spot together, up close, in a line fighting potentially over the same item, definitely has some issue associated with it. I think number one in everybody’s mind is crowded stores, so retailers are thinking about how far down does traffic need to be? What do I need to do to make sure that my customers feel like their needs can be met in a way that is not literally between the hours of 6:00 AM and 8:00 AM in my physical store on the morning of Black Friday?

Kristin:
I think when you look at all the statistics out there right now, there’s a lot of different sources reporting what they believe that the traffic levels will be for the day of Black Friday. I know retailers are actively looking at that information and bouncing that up against their plans. Some of the statistics are traffic’s expected to be down 25%, but then you also start to hear varying reports about consumers and their plans, where 30% to 50% of consumers still plan to visit a store, a physical store, on the day of Black Friday.

Kristin:
I know that creates a lot of challenges for retailers as they think about, not just how to keep their consumer safe, but how do they keep their associates safe as well? Because none of them want to be at the heart of some big spreader event. Then once you move past just the health and the safety of associates and consumers, there’s this next level of financial situations.

Kristin:
As we look at the Bureau of Labor Statistics, unemployment has been at record levels this year, where in the early part of 2020, we were at almost 14% unemployment. That’s down now, October was around that 7% mark, but there’s still this conundrum and debate around what are consumers going to spend on holiday? Should I be encouraging consumers to just spend a ton of money and build the basket on holiday? Does that feel like the right thing to do?

Kristin:
Then that even leads into the conversation around seasonal workers. Typically, retailers staff up for the holiday season to meet the demands, and we’ve all seen the articles about Target and the thousands of workers that they’re hiring. Well, that becomes this debate around, well, now I’m potentially putting more associates in harm’s way, but also am I meeting a need from an unemployment perspective?

Kristin:
There’s not really an easy cut and dry answer around the financial situation like there is around the traffic and keeping people out of the store. I think there’s a general consensus around how to handle and how retailers are approaching keeping folks out of the store, but there’s still this open-ended question around the financial situation of the country and how retailers are going to play into that from an ethical perspective.

Joe:
What’s going through my head is this, is 2020 just an anomaly, where we’re like, okay, well, everything just got spread around and we’re dealing with this pandemic, so this Black Friday is going to be different from anything else that we’re ever have. How do these things going on this year, do they have any impact on Black Friday in general as we move on past 2020?

Kristin:
Well, if you’re to believe every headline that you read, this would be a one-of-a-kind Black Friday that’s experiencing things that have never been experienced before in retail. Now, some of that is true, but let’s push a little bit deeper. When you think about the sub-headlines under the one-of-a-kind Black Friday, you start to read things like, “Black Friday is moving out of physical retail. It’s spreading out over time, and consumers are shopping earlier than they ever have before.”

Kristin:
Let’s pause on those three things for a minute and say, “Are those really new things that have never happened in Black Friday?” I think as we start to look back about what’s happened historically to Black Friday, these are already trends that have been emerging in Black Friday shopping patterns and holiday shopping patterns for the last several years. Then when you start to think about what’s been happening in retail all of 2020, this is just another example of COVID accelerating the trends that were already going on in retail.

Kristin:
Let’s talk about the moving out of physical retail. I think that’s been the largest headline related to retail across all of 2020 is this shift from physical shopping to virtual shopping. The headline you read for Black Friday and for the holiday season is that 60% of shoppers are going to purchase all of their gifts online. Well, what’s interesting about that stat by itself makes folks go, wow, that’s so many people engaging only online, but what you see less of is the report that last year that was already 56% of shoppers that purchased all of their holiday gifts online.

Kristin:
Really, when you think about 60%, if you were going from zero to 60, that would be a big shift, but the four basis points shift from 56 to 60 puts it in perspective, and says, you know what? People were already doing this. There’s just going to be more of it. Now, that was a, am I purchasing all of my gifts online or none of my gifts online? I do think you’re going to see this big shift to these partial purchases and folks that are purchasing both physical and virtual. That number is that 51% will shift most of their purchases online.

Kristin:
Now I don’t have the last year to stick, and that was from the MPD Group, but I think that’s where you’ll start to see a big shift is this kind of, how much did I spend physical versus virtual last year and a shift towards virtual. When you talk about this moving earlier in spreading out of the holiday purchases, I think that’s another example where this has just been something that’s been happening.

Kristin:
Prior years, any of the sales that were happening prior to Black Friday would have been called sneak peaks and pre-Black Friday specials. We already saw consumers starting their shopping prior to Black Friday. We’re just seeing a little bit more of that this year. The stat that I saw from Retail Dive was that 43% of consumers will start shopping before Black Friday. Now that sounds like a lot, but last year was already 34%. We’re seeing an increase in it, but again, it becomes an increase in a trend that was already emerging.

Kristin:
Then as you start to think about, well, then what’s going to be happening after Black Friday, and is there going to continue to be this spread out? Well, everyone at this point knows the term Cyber Monday and anticipates that, which is a term that started in 2005, named by the NRF. This online shift and this shopping that has happened post-Black Friday and these big shopping days, we’re just going to continue to see more of that, I think, and that just becomes a continuation of what was already in place.

Joe:
Yeah, I really liked that thought, because it falls in line with a lot of the other shifts we’ve seen in consumer behavior during 2020, and that it has pushed a lot of people on to tracks that were already there. We did not invent Zoom. It was not invented because of the pandemic. It was already going that way and more virtual, everything was happening. With the pandemic, it really caused that fast forward button to occur and put a lot of people that may be lagged behind into those things and got them to interact with them maybe more quickly than they would have.

Joe:
It’s something that was already happening, not this insane polar shift of what was happening. I dig that. The more I read, and especially talking to you, all the headlines that are popping up, I can’t help myself. I’m reading this article and that article, and a lot of it’s from the retailer perspective of what ways in which are they, A, trying to keep it safe and trying to spread things out and all the things that you discussed, or, B, for smaller businesses, what kind of experiences are they trying to make?

Joe:
I’ve seen some really cool stuff like you can get a personalized shopping experience by reserving a time slot at a place, or you get a discount by reserving a spot or simple things like mimosas. Like, come on in, we’ll give… It’s more of that social experience we talked about on last episode, but what is it? I think the one thing that we talk a lot about Callahan is how do we really see things from that consumer perspective? What is your thoughts on what is the consumer thinking about Black Friday this year?

Kristin:
I think there’s a couple headlines going through everyone’s minds right now from a consumer perspective. I think the first one is definitely the pandemic. Consumers are definitely concerned about their safety. They’re definitely favoring in-store retailers that have the safety precautions in place. I think that’s headline one.

Kristin:
I think headline two. We started to have this conversation a couple of weeks ago about shopper experiences and how the mindset of the shopper has just been changing over time from, I’m planning to shop on Black Friday, would have been prior thinking too, I’m kind of fitting shopping in wherever it fits into my lifestyle, and I’m always shopping and I’ve got this phone in my hand, so I can make a transaction whenever I need to. I’m seamlessly navigating between life experiences outside of shopping and into shopping.

Kristin:
I think that there’s also this school of thought for folks right now around, well, I don’t actually have to be in a store to Black Friday shop. By the way, shopping the Friday after Thanksgiving doesn’t have to be the only time in which I’m Black Friday shopping. I think you’re seeing some of that also start to transition.

Kristin:
The statistic this year is that 36% of consumers are planning most of their holiday shopping on Black Friday, compared to 60% last year. I think that just starts to show you, while people are still planning to shop Black Friday, it’s less about the actual day of Black Friday and more about when this idea of Black Friday fits into their plans for that weekend and their plans for kind of the first couple of weeks of December.

Kristin:
Then I think third, we’re going to see this influx of value mindset. We talked a little bit earlier about the financial impact of the economy right now and the unemployment rate. That’s leading to consumers are definitely looking for value, and they’re definitely looking for price and promotions, and that’s going to be a huge trigger for when they start shopping this year.

Joe:
Right, no matter if it’s in person or if it’s online, that’s going to be a consideration. Also, the thinking of the time shift also corresponds with a lot of consumer things that we know, we just know. The idea of time and placement, meaning I can watch a show whenever I want. My kid doesn’t even understand the concept of, well, every Thursday, this show’s on television and we watch it every Thursday.

Joe:
I tell her stories like I’m a grandpa of some kind of saying, “Back in my day, we would go round around the television every Thursday just to watch the show and whenever it was done, it was over.” That concept of time and having to be at a certain place at a certain time seems to, especially with our technology, seem to be fading away with other consumer behaviors too. That’s really interesting. It feels like-

Kristin:
Let’s talk about time for a minute. As you think about time, Black Friday used to almost be like Pavlov’s bell. It would ring and we’re like, “Oh no, it’s time to holiday shop,” but that’s totally different this year. I think it’s part of what you just said, that there’s not a specific time that we have to wait for, everything’s kind of available.

Kristin:
If I want to do holiday shopping at 2:00 AM, there’s a retailer I can transact with at any moment from my phone. I don’t even have to get off the couch. When you start to combine that with things that have been going on this year, Black Friday and holiday shopping really kicked off with Prime Day, and so that’s when folks started thinking, oh, you know what, you’re right. It is fall, and you know what comes late in fall is holiday.

Kristin:
You’ve started to see that now folks are putting up their holiday decorations, and they’re shopping for their presents and their gifts for their families. They did not wait for that bell this year to tell them that it was time. The stat that I loved here was that 25% of Americans are already done shopping for all of holiday in early October. I think that just shows that no one’s waiting for Black Friday to be that kickoff to the holiday season anymore.

Joe:
Yeah, it was. The flood gates were opened with Prime Day, which was a strategic lead pretty sound move from Amazon to ring that bell so early in places we weren’t even thinking about holiday season.

Kristin:
I think that triggered some thoughts for retailers. With Prime Day moving out to October, I think from a retail strategy perspective, all the retailers had to go, oh man, what’s my response? That really changed the dynamic of the holiday planning for them and forced folks to get out of their comfort zone and start to think about doing something differently. Do I just match Amazon the way that all the retailers have done in June and July on prior years, or do I come up with a new concept and how do I link that to what I already have going on in fall?

Joe:
To that point, I think a lot of this can be what do you… Yes, 2020 holiday season’s different, and it is a lot of added stresses and a lot of added operational things we weren’t thinking about prior to this. I guess the question is, is there opportunity in that? Does the fact that, hey, the moments like this that shake everything up, if you’re a smart retailer and a smart marketer, and you can get your head above water for a minute to say, okay, what is this an opportunity?

Joe:
Is there any way to shake off some of the things that we’ve been doing and just doing because that’s how it’s done every single year? Is there some opportunities here for innovation and to things that we can get rid of the old stuff that just doesn’t make sense and bring on new?

Kristin:
I totally think there’s a glass half full to what’s going on right now. You can look at this and say everything’s changing, and there can be this reactive panic to, okay, well, I have to scramble to figure out how to do what I did last year, but make it fit for 2020. Or this is where I think the strong retailers and brands can step back and say, well, how can I take in the changing consumer dynamic? How can I take in the changing landscape, like Amazon putting their Prime Day in October and start to think about how do I try something new?

Kristin:
When we first had this podcast around the holiday season and talking about Black Friday, you asked me a question around how do retailers plan for Black Friday and the holiday season? I think the first thing I said to you was, well, everybody starts with last year, what happened last year? What happened with the competition? There almost is this culture in planning for holiday at a retail office that if I don’t do what I did last year, there’s this risk that’s going to happen. If I deviate too far, consumers might not go there with me.

Kristin:
I would love for consumers to start shopping November 1, but if the consumers aren’t prepared to shop, then I’m risking a lot by having some aggressive promotion and campaign set up for a time when consumers aren’t there. But this year that’s all changed. Everything is new. There are definitely trends in consumer purchasing behavior that should influence how retailers and brands respond. But this is the perfect time to say, what have I always done that I just want to stop doing?

Kristin:
I think seeing retailers take a stand on being closed on Thanksgiving, you know what? Maybe that should have always happened., and there should have always been a break for store associates to be able to spend time with their family. By the way, they’re all still open online, so if you desperately needed to buy something, that’s still an option for you, but you get to make a different choice that would have felt like an impossible choice in 2019 or 2018.

Kristin:
I think to your point, this is the perfect time for retailers to try something new and try something that they’ve never had the courage to do.

Joe:
Well, Kristin, thank you as always for your POV and analysis of this 2020 holiday retail season, and thank you to everyone listening out there. Most of all, thank you to all the people out there in retail trying to make the shopping season both safe for shoppers and for their staffs. It is a tough year, and we wish you a happy holiday season.

Joe:
From Kristin and myself here at Uncovering Aha and the entire Callahan team, happy Thanksgiving, and if anything else, here’s hoping that Thanksgiving 2020 is a safe one for all of you out there and that all of this mess that we’re dealing with can lead us to a better future for our businesses in 2021 and beyond. Kristin, thanks, I’ll talk to you soon.

 

You’ve been listening to the Uncovering Aha! podcast. Callahan provides data savvy strategy and inspired creativity for national consumer brands. Visit us at callahan.agency to learn more.