The new Discounting Playbook 2021 report commissioned by LoyaltyLion reveals widespread disappointment with Black Friday
A new Discounting Playbook 2021 report has been commissioned and launched by data-driven loyalty and engagement platform, LoyaltyLion. Carried out across 2,014 consumers in the US (by independent research firm Censuswide), the findings reveal key attitudes in the US towards the discounting period and Black Friday Cyber Monday (BFCM) in particular.
“Once a feel-good Friday of deals, our research found that the now month-long BFCM event is one that customers no longer trust,” said Charlie Casey, CEO at LoyaltyLion. “Traditionally a golden opportunity to acquire new shoppers, the retail event is in danger of leaving existing customers feeling undervalued, underappreciated and deprioritized. While it is fair to say that there will no doubt be some good bargains out there, a worrying proportion of shoppers feel that the discounts are not all they are cracked up to be.”
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Disappointment reigns among US consumers
The research found that a resounding 62 percent American of consumers feel that BFCM discounts are never as good as they expect them to be and almost 65 percent reported that the products they want are not usually discounted making the retail event less relevant to them. Significantly, 62 percent surveyed also felt that BFCM discounts pressure them into making purchases they would not have made on their own.
Negativity towards brands dishing out BFCM discounts
Even more concerning than shopper sentiment towards discounts, were the feelings targeted at brands offering these price reductions. 59 percent of US consumers expect brands to push lower quality products during BFCM and 63 percent said that the deals and offers provided during this period impacted their trust in brands. Furthermore, almost 64 percent of those surveyed felt brands care more about selling products over supporting causes or living their values. Finally, 63 percent felt that brands focus on winning new customers over making their existing customers feel special during BFCM.
Poor preparation cited by consumers as a key issue
Despite the months of planning that go into BFCM preparation and strategy, consumers still do not feel brands have got it right. 63 percent said brands do not do enough to prepare for the rush of orders they will receive during BFCM and 56 percent believe that they do not communicate enough with them post-BFCM. Add onto that, 64 percent said that brands send too many promotional messages in the run up and during the BFCM period.
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Alternatives to discounting
Traditionally, retailers have relied on heavy discounting during the BFCM period, but this often comes at a cost to a business. The research findings indicate that it is possible to replicate the surge of oxytocin that comes with finding a great bargain creating a feel good factor towards a brand, but through alternative methods that will not harm profit margins.
Brands would do well to note that 72 percent of US consumers indicated that they would feel positive towards those that offered the opportunity to contribute to a charity or initiative aligned with their values.
While 80 percent said that offering free or discounted shipping would encourage positive sentiments toward a brand, as would giving out loyalty points that consumers could redeem against future purchases (72 percent). 76 percent of respondents said birthday special offers held appeal. Promotions offering early access to sales (75 percent) and early access to new products (73 percent) were also cited as ways to enhance sentiment.
Charlie Casey, CEO at LoyaltyLion concluded: “Consumers expect discounts over BFCM, however as it stands today, they’re also expecting a negative shopping experience. Brands need to rewrite the rules this year and balance the impact of BFCM discounts by using alternative incentives at strategic points in the customer journey to create emotional connections. This strategy can be just as effective as discounts in encouraging customers who have abandoned their carts to return, winning back at-risk customers who haven’t visited the site for a while, and encouraging customers to make a commitment in the form of either starting a subscription or joining a loyalty program. Gone are the days where brands can afford heavy loss-making discounting. The focus must be on creating positive sentiments and driving BFCM sales to result in stronger, long-term customer relationships that keep both profits and customer lifetime value high, all year long.”
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