By Sangeetha Narasimhan, Marketing Manager, UK at Ingenico ePayments.
In Europe, Black Friday is a big deal. We've witnessed first-hand this American-born phenomenon spread first across the Atlantic and then move online.
Last year, Ingenico ePayments processed 29% more online payments during the Black Friday weekend compared to the same period in the year before. Volumes were so high that, over the course of the weekend, we not only broke our record for the most payments processed in a single day, but we broke it twice.
The surge online has seen the usual shopping-centre crowds dissipate somewhat; the BBC even reported 'no incidents of frenzied shopping in shops and stores'. Why such a dramatic change in consumer behaviour? Today, internet shoppers know that they have a much better chance of finding exactly what they want, at the best price, with a lower risk of encountering stock shortages. Online shopping is also faster and a lot less physically draining compared to battling the Black Friday crowds; shoppers can select from a huge range of products all from the comfort of their own home.
Here in the UK, Ingenico ePayments saw online retail spend on Black Friday rise to 330% higher than a typical Friday in 2016. Across Europe, we saw a similar story of retail surges: transaction volume increase by 25% in Belgium, 56% in France, 25% in Germany and 91% in the Netherlands. The Black Friday phenomenon is now firmly established in Europe but spending is also spreading more evenly over the entire weekend. For many European markets, the two days between Black Friday and Cyber Monday also registered among the busiest online shopping days of the year. By comparison, the United States saw only minor growth year-on-year.
Online shoppers in the US instead tend to focus their attentions on Cyber Monday. Ingenico ePayments recorded that Black Friday spending was only up by 167% compared to the average Friday, while Cyber Monday spending was a colossal 342% higher than a typical Monday. Adobe confirmed that Cyber Monday 2016 was the biggest day in US online shopping history.
One explanation for soaring sales on both sides of the Atlantic is the rise in conversion. Across the weekend, we saw shopping cart abandonment fall by a third in the UK compared to the typical day, down by half in the US, two-thirds in the Netherlands and 15% in Germany. The fear of missing out on countdown deals means customers are keen to complete the payment process as soon as possible to avoid missing out on the sales deals.
While higher conversion rates are a major ambition for most online retailers, the danger is that pressurised Black Friday shoppers will suffer from buyer's remorse, change their mind and return goods. Retailers need to be more prepared for the returns period, which typically hits hardest around 15th December. The strategy for managing returns has now become almost as vital as the sales themselves. Intense advertising and marketing promotion of huge sales are very effective at boosting demand, even where genuine savings are very minor. However, online merchants planning a 2017 Black Friday discount campaign should consider the risks and the opportunities in front of them this year.
Here are Ingenico ePayments' five top tips for making a success of Black Friday this year:
- Fraud rules: make sure you have the right set of rules to allow conversion.
- Peak sales: introduce peak sales requests to make sure accounts are correctly configured and will not block transactions.
- Promotions: alert your payment gateway of any planned promotional periods, so they can prepare for increased demand, and make sure you can report success by tracking voucher codes.
- Chargebacks: these can be reduced with proper fraud protection, but also through the quality of fulfilment and customer service.
- Payment options: ensure your customers can pay securely, however they want to pay and wherever they are.
Uncoordinated campaigns can leave website and logistics setups at risk in the face of unprecedented demand. Make the most of this year's huge Black Friday opportunity by ensuring all teams coordinate fully - prepare for more returns, but also for more traffic, more transactions and more lasting success.