Voices: the CMB Blog

What can B2B companies learn from Black Friday and the Holiday Shopping frenzy?

The Holiday 2011 Shopping season got off to a strong start over the weekend.  Black Friday was the biggest ever for brick-and-mortar retailers; and there was an even bigger increase for online retailers.  Overall, the weekend was a huge success when compared to the start of the 2010 holiday shopping season.

The fact that Black Friday saw an increase in retail sales this year should not come as a surprise.  Much research (including our own) foretold strong buying intentions, with a continued shift to online shopping. The sheer size of the increase, however, is quite a surprise.  Many analysts predicted a 2-3% rise in holiday shopping activity, so the big jump this weekend has brightened the prospects for American consumers and retailers.

So, does this mean all of the Black Friday deals and hype worked?  The midnight store openings?  The door-buster deals?  The incessant advertising and promotions?  Is there any way we can do something like this in the B2B space? 

Let’s put the holiday shopping activity into perspective.  We are at the end of the year and consumers are looking at their bank accounts and budgets, and assessing how much is left to spend, and looking at the bare walls where the flat screen TV should be hanging.  We find a great deal of pent-up demand in the US market, as US consumers have been through another difficult year and pulled back on spending.  This cutting back has left people with more money to spend (whether from their bank accounts or credits cards).  

So, it looks like we are finding a strong convergence of:

• The Supply (retailers going out of their way to make it easy for consumers to shop and buy with longer hours and lower prices)

• The Demand (a rather strong need to refresh the cupboards), and

• The Financial Support (to make it all come together)

Much of the same can be said for business.  Budgets have been trimmed for several years, resulting in the need for investments and purchases to lead and support growth in the future.  As on the consumer side, cutting back has created strong profits for many companies, which means they have money to spend. 

What is the supply in this B2B equation?  Are companies making the necessary effort to match pent-up demand and the ability to spend?

First of all, B2B can’t replicate door-buster deals and midnight store openings.  But, B2B firms can:

• Make it easy for companies to spend:  Look at the holiday deals for shoppers, and you will see promotions for items priced from $25 to $2,500 (and even higher).  If for no other reason than “spend-it-or-lose it,” companies approach the end of their budgetary year with the need to purchase – when selling to other businesses, you need to be prepared with products and services in a range of prices to meet their budgets.

• Address the need to invest, and communicate it repeatedly:  The theme of Holiday Shopping 2011 has been the consumers’ need to purchase many of the new technologies and new fashions that they’ve been unable to buy over the past year.  The same can be said for business, but instead of the latest tablet or gaming console bringing joy to the consumer and her/his family, the product or service will bring opportunity to grow and advance the business.

• Know your customer’s budgetary cycle:  Retailers have it easy in this area – personal budgets follow the calendar years, so December represents the rush for consumers to spend within their annual budget.  However, companies have unique fiscal years, often tied to industry business cycles.  If you sell to businesses, it is smart to know when your customers may be looking to spend leftover cash.

• Clearly understand customer needs and wants:  This should go without saying, but retailers greatly prepare for this time of year by deeply analyzing what consumers need and want.  They tailor product offers, pricing and communication to meet them and remain focused on the key aspects driving purchases.   

Posted by Jeff McKenna, Jeff is a Senior Consultant at CMB, and the creator and host of our Tools and Techniques Webinar Series.

Black Friday is nearly upon us.  For Americans under 30, the Friday after Thanksgiving has always been “Black Friday,” and the madness of doorbusters, riots, and people camping out in front of major retailers defines the day.  But this hasn’t always been the case, and a brief walk down memory lane reminds me that great opportunities exist to prepare and define the next phase of this holiday tradition…

A nice summary of “Black Friday” history shows the day after Thanksgiving has marked the start of the holiday shopping season for over a century.

Just a few interesting facts…

• It wasn’t until recent years (mid-‘00s) that Black Friday actually became the busiest shopping day of the year.

• Philadelphia police officers dubbed the day “Black Friday” around the mid-1960s because of the massive traffic in the city brought on by the start of the shopping season and the annual Army-Navy football game, which was hosted in Philadelphia.

• Black Friday was not given the name because it was the date when retailers’ balance sheets went from being in the red to being in the black.  This myth arose in the mid-1980s as the name became part of common lexicon, but retailers started to spin the new story to counteract negative connotations.

Snooping around YouTube, I found this Miami news report from 1984:

One noteworthy aspect of the video, besides the fashion (yikes!), is the fact that “Black Friday” is never mentioned.  Not one reference to “black” or “Friday,” even though the telecast was reporting about the big start to the holiday shopping season.   In fact, the reporter interviewed a husband and wife shopping together – not like today where Black Friday is promoted as a “lone wolf” activity, where a solo shopper has the freedom and flexibility to snatch up every deal. Or alternatively it is treated like a team event where groups of shoppers strategically coordinate their shopping tactics.

On the other hand, the final segment of the clip references the start of the retail store camping-out trend, with the story about Cabbage Patch Kids.  If you don’t know the history of the original CPK, watch this video, and skip to the 1-minute mark to see the vision of Holiday shopping future back in 1983:

So, how does this apply today?  Are we to expect Black Friday to continue its march to become the “Battle Royale” of shopping events, and even swallow up Thanksgiving, as several are cautioning?

I don’t think this is necessarily the case.  In fact, the point of the earlier comments is that things change, and rather rapidly at that.  Black Friday has not always been the gluttonous event of “doorbusters” and “Midnight Madness” sales.  While it has marked the start of year-end shopping activity, it’s only been recently since retailers have put a huge premium on this single day.

And I think we see the winds of change in new shopping behaviors.  As we recently reported from research in our Consumer Pulse, nearly the same share of people plan to shop online on Cyber Monday (38%) as on Black Friday (39%) this year.  And, online retailers have been implementing a big push to attract shoppers this year as they seek to gain a larger share of holiday sales (my inbox is filled with offers from a wide variety of e-tailers, and all I need to do is click a mouse rather than sit outside my local Best Buy with thermos in-hand.)

 In the end, the online start to holiday shopping and doorbuster deals will become “serverbuster” deals, and people looking for the killer deals or must-have gifts will do it online.  (The recent Target Missoni online fiasco shows that shoppers are as content rioting online as in-stores)  Then, perhaps, the Friday after Thanksgiving will return to the old days with families would get together and simply go shopping.

For more on holiday shopping trends download our latest Consumer Pulse: The Holiday Shopper: Cyber Monday, Black Friday, online shopping and what they mean for retailers.

Posted by Jeff McKenna. Jeff is a senior consultant at CMB, he is not asking for a Cabbage Patch Kid this year.

I recently read Mike Albo’s piece in W Magazine about beauty hotlines where operators are standing by to answer questions and deal with “emergencies,” like accidentally using an antiperspirant cream as a hand lotion.  This got me wondering , in a 24/7 online world filled with IMs and chats, are most beauty companies still relying only on 1-800 numbers to answer their customers’ questions and concerns?Curious as to whether beauty companies offered a customer service chat option, I did an impromptu investigation of 10 product websites based on products I have in my bathroom.  Most products are from well-known, deep-pocket companies (e.g. Neutrogena and L'Oreal).  A few were organic-type products produced by smaller companies (like Earth Science Naturals). I was surprised to find none of the product websites I visited offered live chat with a representative.  Not one.  If chat was available, I couldn’t find it anywhere on the sites I looked at, and I searched.  Usually, all I could find were the 1-800 hotlines from the back of the product itself. 

As a marketer I acknowledge there are some definite pluses to beauty hotlines, they are great for building customer relationships. As a market researcher I see other benefits too: the calls are recorded, and companies get the pulse of the customer, potentially driving further research on hot topics.  It's essentially free qualitative research that comes to them.  But the world has changed from a decade ago, customers expect answers now and limiting feedback to phone calls could keep companies from getting the most accurate information. Also, there are a couple of problems with limiting interactions to 1-800 numbers.

• First, these hotlines are usually available during office hours: Monday to Friday 9-5. These are the prime hours counted against cell phone minutes (800 numbers still count as minutes used).  Plus they’re closed nights and weekends, the time that most cell plans offer free calling.  With fewer and fewer people owning landlines; companies must consider that their toll free numbers aren’t free for most.  And hey, people work too!

• Second, if you can’t, or don’t want to call during hotline hours, there’s usually an email option. The rise of IM can make even email feel like a pain in the neck. And sometimes an email answer generates more questions.  Sometimes you need a little back-and-forth to get to the root of your question.  People want reassurance: a real live person to answer questions and hash it out with you until you get the information you need. 

There’s a huge opportunity here folks. I’m talking to you, Bath and Beauty Products Industry.  With the implementation of website chat functionality, just think how much easier data collection could be.  Think how you could be getting more contact with a wider variety of people with a wider variety of questions. Think of the potential increase in customer satisfaction by offering another option for contact, and the chance to drive future strategy.  Think of the “Cool Technology” factor and who might be inclined to use it. 

As both a researcher and a consumer of beauty products, this seems like a no-brainer.  What do you think?

Posted by Jessica McClelland.  Jessica is a senior associate researcher at CMB who does her best thinking and magazine reading while exercising.

 “It's the most wonderful time of the year!”  You probably remember the singing parents in the Staples ad. So funny, and true!  And if your kids are college age, like mine, you may have wiped a tear when reading Beverly Beckham’s piece in the Boston Globe, “I was the sun, the kids were my planets.”

Back-to-School is as much about MOM as it is about kids (and teachers).   While moms miss their kids, it’s also time for mom to learn and grow.  Moms welcome the opportunity to do something for themselves for a change, and retailers can help.  You don’t have to sell pencils or lunch bags to participate.  Offer moms the opportunity and ability to learn something new themselves, or renew a prior hobby or sport.  Consider what the following moms said they plan to do, once their children are back in school:

“I’m taking a drawing class!”

“We are expanding the 2^nd floor, so I am picking out new paint and will be doing that.”

“I’d like to re-paint the bathroom and maybe re-decorate the living room.  We’re having company for the holidays, and I want the place to look great!”

There is so much opportunity to talk to moms and help them achieve their short term goals, and maybe some long-term ones as well. Whether you’re a grocer, a paint store, a gym, or you sell yoga mats or tulip bulbs, engage moms by demonstrating how you can help them achieve something this season.  They will re-pay you with their purchases, loyalty, and recommendations.

And don’t forget to also talk to moms about their kids – they’re #1 with them, and they want to explore and enjoy fall with their families.  From leaf peeping and apple picking, to biking and soccer, moms look for ways to connect their families in the midst of busy schedules.

Kathy Ofsthun is an Account Director at CMB, specializing in Shopper Insights.  Follow her on twitter @ShopperMRX, or find her at the mall, a SoHo boutique or the nearest estate sale!

I heard great things about the Shopper Insights conference in Chicago a few weeks ago. While I couldn’t attend, others from CMB said the conference had a great vibe, and was filled with excitement and information about the latest trends in the shopping experience. One of the major takeaways was that the combination of customers’ shopping preferences and new technologies continues to drive change in the retail shopping experience.  We’ve seen this first hand in our Consumer Pulse detailing how smartphones are changing the retail experience.

Appropriately enough, and just in time for the conference in Chicago, I read an article in Marketing Daily about Walgreens new “Pick Up Today” service rolling out in Chicago. We have seen this multichannel trend in other retailers like Wal-Mart and Best Buy and at many grocery stores, but this is the first I have seen for a pharmacy. This really caught my eye as my focus is on the healthcare industry and we recently looked at consumer digital communications trends in the healthcare market.

Walgreens is timing things right - our research shows one-third of consumers are already communicating with their pharmacy digitally (through websites, email, portals, or mobile apps). And it’s not just the young, 36% of those over the age of 50 say they’re communicating with their pharmacy digitally. For now most are simply refilling a prescription or asking a question, but this is another opportunity for a customer touch point. While 31% of consumers say they are currently communicating digitally with their pharmacy, 76% say they expect to communicate digitally with their pharmacy in the future.  

With only 16% of consumers saying they would never communicate digitally with their pharmacy, health insurer, or provider, the trend is clear.  Consumers have certain expectations with regard to digital communications based on what they’ve done in other industries.  It seems like there is a lot of potential here for pharmacies and other healthcare companies (e.g., insurers, providers) and security is really not an issue for consumers even with topics such as prescription drugs and health-related issues. 

So I ask those healthcare companies out there….are you prepared for what consumers expect to be able to do digitally in the future?

Download the CMB Consumer Pulse report sharing the consumers' perspective around digital communications with their healthcare providers. Download the report.

Posted by Amy Modini. Amy is an Account Director for CMB’s Healthcare Practice and enjoys spending time at the beach and trying to keep up with her almost two year old son.