Slowly beaten to death by retailers, black Friday was given a fatal blow by consumers this holiday season. Once a term used to describe the beginning of the period when retailers turn a profit from the holiday selling season, it evolved to become synonymous with deep discounts as part of a marketing scheme. When the discounting for black-Friday began at Halloween I knew that the end was near. This marketing workhorse has seen better days. What is the lesson here? No longer will consumers be driven like cattle. I am not going to quote the numbers as you probably know them quite well.
Rather than lament bygone glory days I want to look forward. Consumerization continues to push retailers toward new business models built around personalized experiences. What we are really experiencing is a fundamental shift in the way consumers approach shopping. As with many aspects of life this is increasingly on their terms. The days of specific or predetermined sales periods are passing. Consumers want the best price and availability at the time they want to purchase. Over the next five years we will see a very dramatic shift away from seasonally driven advertising events like black Friday, back to school and the like. Rather than respond to a coat sale in October they want the coats to be priced right when they want or need them. This will further erode retailer’s ability to manage and plan for year over year sales growth via traditional vehicles.
As digital commerce continues to gain ground consumer response rates to global marketing offers will decline. In 2015 retailers must move quickly to enhance their capabilities to price “in the moment”. What do I mean by this term? Pricing in the moment is when a retailer will quickly determine the value of the consumer, the potential revenue and profitability of a particular item or transaction, and make a reasoned offer to the consumer. This will be done quickly but thoughtfully at first but in the future will require lightning speed. In recent Gartner research Predicts 2015: Retail Digital Commerce Stays Low, Crowdstorming Leads Innovation, In-Moment Pricing Drives Personalization, and Augmented Reality Rallies I made a prediction that by 2017, more than 25% of all products sold by multichannel retailers will be priced “in the moment” through personalization that supports digital business strategies. Embrace the change and learn how to survive and thrive in the consumer driven economy.