Retailers will win better returns with shorter Black Friday promotions than Amazon, says e-commerce player

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Terry Hunter, VP e-commerce and client strategy at e-commerce player Astound Commerce, advises retailers to run shorter Black Friday promotions than Amazon but says back-end systems must still be optimised to cope with increases in demand

“This year’s Black Friday looks set to be the biggest ever in the UK, but Amazon’s new approach in the US is a sneak peek at what’s to come. Of course, Amazon won’t be announcing all the best deals until the 27th. However, by encouraging consumers to start the hunt early, Amazon presumably hopes to take some of the load off of their back-end systems, which will inevitably take a hammering when everybody jumps on the site looking for bargains in the same 24 hour window. But will Amazon’s approach have the same impact on sales and generate the same revenue predictions when staggered over several weeks?

“This approach makes sense for retailers selling the same stock levels at the discounted rate. But if you end up shifting more stock at a lower margin, then are you just eating into your revenue? Part of the reason Black Friday works so well is the excitement built around it, so is three weeks too long a period to sustain the hype and will consumers lose interest?

“Amazon must feel it’s worth the risk. The online retailer received orders for more than 5.5 million goods on Black Friday last year, selling 64 items per second. It was a major contributor to British consumers spending £810 million during the event overall, which is predicted to reach £1bn this year. The really interesting comparison for Amazon this year though will be total sales in November compared to last year.

“It’s a delicate balancing act for retailers; on the one hand, this approach spreads the workload and therefore reduces the risk of a system falling over. But on the other, it potentially risks losing the impact and enthusiasm for a sales phenomenon that’s characterised by a short timeframe and a flurry of consumer activity. Ultimately, I think Amazon is pursing the right sort of tact and it’s one that will become more prevalent in the market. But for most retailers, I think they’d see better returns if they ran promotions and discounts over no more than one or two weeks, rather than the best part of a month.

“Even if merchants spread the load over a longer time frame, all the incentives in the world won’t count for much if systems aren’t optimised to deal with what will still be elevated traffic volumes. No-where is this more important than at check-out. You can manage resources by pushing consumers to specific deals at specific times, but ultimately, they all end up at the same check-out and the integration of this with back-end systems can make or break the success of Black Friday – or Black November – for any retailer.”