BFCM is a thing in Australia, but why?
For the last 3 months my inbox has been flooded with emails for blogs, webinars and tools to help me prepare for Black Friday Cyber Monday (BFCM). For the last 3 days it’s been flooded with emails for retail brands’ BFCM sales. I don’t think it makes a whole lot of sense, even in the US but I’m particularly perplexed as to why it’s such a big thing here in Australia. Here’s a few reasons why:
It’s based around a US public holiday
There is a logic to having retail sales on black Friday in the USA where many employees have the day off. Some employers give workers both Thanksgiving day and the day after off to form a four day weekend. Thanksgiving is a US specific celebration based on boatloads of European invaders almost starving to death then being rescued by the very people whose land they later steal. It doesn’t have any connection to Australia past or present.
Given this, and the fact that in Australia Black Friday has a very different meaning there’s no reason Australian retailers need to run sales in late November.
In the lead up to Christmas people are going to buy anyway
Christmas, whether you believe in Christ or not, is a big thing in Australia. Everyone is compelled to buy their loved ones thoughtful gifts. Smart retailers prepare in the months leading up to it by stocking their shops and warehouses. With such an increased demand they can sell at full price. People have multiple purchases to make, they just want to get in, get what they want and get out. Few can be bothered to hunt around for who might be selling something a little cheaper. Reliable delivery by 25th December and returnable/exchangeable items are often a higher priority than bargains.
It’s only after Christmas, if retailers haven’t moved the stock they had expected to that they discount. Boxing Day, until BFCM came along, was the most anticipated sales period of the Australian retail calendar.
It’s a race to the bottom
In retail, discounting can make sense in certain circumstances. Doing it when you know all of your competitors are also doing it is problematic though. These days customers can compare prices with a few taps on their phone. You need to be cheaper than all your competitors to get the sale. This turns what should have been an attractive but sustainable discount into a discounting bloodbath.
It causes unnecessary strain on your staff
Sales of any kind means more work. It means more orders need to be picked, packed and dispatched. Customers have questions, returns, exchanges, complaints. This all causes work for your warehouse and customer service teams. Spread evenly over a year this would be manageable, but crammed into a couple of days it means you need to hire more staff or risk lengthy delays and more unhappy customers. Couple the additional staff costs with the reduced margins of the heavy discounts and BFCM doesn’t really make that much business sense.
It causes unnecessary strain on your servers
A bit of a boring techie reason but, much like your staff, your web servers weren’t designed and built to handle all your customers all at once. To allow an ecommerce website to cope with this deluge of clicks it needs to be scaled up, with this comes cost. Don’t scale up and it doesn’t matter how crazy your prices are, no one will be able to checkout as your site grinds to a halt.
The great thing about websites is they can stay open 24/7. They don’t need to sleep, they don’t take religious holidays off annual or long service leave. They’ll keep working through the night and over the weekend year-round.
You could be offering discounts at times of low traffic rather than deliberately trying to crash your site by shoving all the traffic onto it at one single point in time. If you were to have a sale, why not ask customers to sign up to the deal over a month or so. Then you can release the sale items to sensible portions of traffic over another week or two. Your servers, not to mention your staff, will thank you for it.
Technology now allows you to tailor different offers to different people at different times and for different reasons
Sales used to be generic, they used to be boring. The same discount on the same product at the same time of year. It didn’t matter who you were, everyone got the same. This was a symptom of the limitations in marketing technology at the time. Billboards all needed to show the same message, price tags in the shops all needed to display the same price no matter who was looking at it.
These days it’s easy enough to tailor pricing down to the individual. We can offer up the right promotion to the right person at the right time. We can do this anytime, not just after a public holiday in a foreign country.
Customer behaviour, AI, business needs, supply and demand data can all be used to optimise both the customer experience and revenue in more sophisticated promotional activities.