This year’s Black Friday shopping extravaganza looks set to be as big as ever, with global sales on Nov. 24 expected to exceed $40 billion. But despite that stampede of business, individual retailers aren’t guaranteed to make a profit, says nShift, a provider of parcel delivery management software.
From cutting margins too tightly with excessive discounting to running the risk of absorbing the cost on countless returned items, several factors can undermine profits during such peak periods, nShift says.
To avoid that, the company is offering a list of five strategies to maximize the money retailers make on Black Friday:
- Keep customers coming back for more : Retailers should not just focus on the “share of wallet” they can secure from a customer on Black Friday. They need to consider the “share of life” they can secure by building loyalty with shoppers over the long term. To do this, they need to focus on delivering the best possible customer experience throughout the entire lifecycle of the order, and not rely on deals and discounts alone.
- Focus on up selling and remarketing: customers are more likely to open delivery update messages than other marketing communications. That makes delivery communications a powerful digital marketing channel for retailers able to take advantage of it.
- Stop returns from killing profits: Roughly one in three items bought on Black Friday is quickly returned. However, operating the right returns solution can convert 30 percent of returns to exchanges. It can also help facilitate the right returns policy, for example by encouraging customers to make returns and exchanges in-store, increasing footfall.
- Ensure your enterprise has capacity to deliver what it promises: Three-quarters of shoppers will abandon a retailer over poor delivery service. But at peak times, it can be challenging to ensure that there is sufficient bandwidth to meet increased demand. Retailers and warehouses must quickly scale up, which may involve using a greater range of carrier companies.
- Reduce abandoned shopping carts: A whopping 80 percent of baskets are abandoned on Black Friday. Offering the right range of delivery options can increase conversion by 20 percent.
“Black Friday on 24 November is once again expected to be a sales record breaker,” said Sean Sherwin-Smith, Post-Purchase Product Director at nShift. “Ecommerce and multichannel retailers should set themselves up to take advantage of the increased traffic. But they can’t assume that their activities will automatically be profitable…”
Click here for more from nShift on its strategies.