Now that the biggest shopping weekend of the year is over, it’s time to reflect on where and how consumers spent their hard-earned bucks, and what lessons small and mid-sized (SMB) retailers can take away from this year’s Black Friday shopping trends.
1. Shoppers Are Increasingly Buying Online
Black Friday is the new Cyber Monday. While in-store shopping took a hit this Black Friday weekend - down almost a billion dollars from last year - online sales set a new record at $4.47 billion, up 18% from 2014. According to the National Retail Federation (NRF), over 103 million consumers chose to shop online versus the nearly 102 million who shopped in-stores.
Key Takeaway for SMB Retailers: You can't afford to not have an online presence. Black Friday alone brought in $2.72 billion from eCommerce sales (a 14% increase from 2014), while Cyber Monday produced record sales of $3.07 billion (up 16% from last year). If you’re neglecting to dedicate time and resources towards developing and optimizing your online (and mobile!) sales channels, than you’re putting your small to mid-sized business at a severe disadvantage.
2. Consumers Realize Shopping Small Isn’t Limited to Shopping Local
Shoppers came out in a big way this Small Business Saturday, spending $16.2 billion to put sales 14% above 2014 figures. The #ShopSmall holiday’s strong growth can be attributed in part to the massive social media engagement and support it’s received online. In fact, a recent survey revealed 52% of people planned to use social media for holiday shopping, including 36% who planned to look for discounts and 32% who would use social media to research gift ideas.
Still, according to Stitchs’ data on SMB retail sales, shoppers from primarily metropolitan states in the West and North East spent the most per capita this Small Business Saturday.
Key Takeaway for SMB Retailers: As a SMB retailer, you need to think about improving not just your local, but also your global reach. Even countries outside of the U.S. that don’t celebrate Thanksgiving, now participate in Black Friday and Cyber Monday. These are new audiences of consumers looking to #ShopSmall in the digital age.
As we’ve already noted above, the Internet has leveled the playing field for small businesses, providing a tremendous opportunity to gain visibility with a much broader audience of potential customers who not only want your products, but also share the same values and ideals as your business. And once you’ve established your eCommerce site, what better way to find and engage new national and global consumers than through social media?
3. Free Shipping Can Make Or Break Holiday Sales
FREE SHIPPING! Two words every shopper looks for when buying online, particularly during the holiday season. According to a recent survey by Deloitte, 87% of people say free shipping is more important than fast shipping. And this is how big-box retailers typically out-promote smaller businesses; they offer free, fast shipping in addition to holiday discounted rates, typically out economizing SMBs who can’t afford to offer free shipping on top of holiday promotions.
Key Takeaway for SMB Retailers: To stay competitive with large retailers, smaller businesses need to offer some form of free shipment for orders. In 2014, SMB retailers who offered free shipping were able to increase revenue by at least 10%. Out of Stitch’s SMB customers, 78% offered some type of free shipping during the holiday season, with 45% offering free shipping with minimum spend.
Stitch data has also revealed that offering free shipping is just as important, if not more so, in the days leading up to the Black Friday weekend. Our data shows SMB retailers who offered free shipping for 90-99% of their sales this Black Friday weekend received 2.35x higher sales than retailers who only offered free shipping on 80-89% of their sales.
4. Sales Channels Matter
Having a local and global online and social presence is important, but omnichannel sellers are the true winners of Black Friday weekend. All large retailers have multiple sales channels: in-store, branded websites, and across online marketplaces like Amazon and eBay. These are the businesses that captured both in-store and online Black Friday buyers.
Luckily, this multitude of eCommerce channels are readily available to SMB retailers.
Key Takeaway for SMB Retailers: Take steps to expand your business into new marketplaces and sales channels. Stitch has found SMBs who sell through a branded shopping cart site (like Shopify, WooCommerce,Bigcommerce, or Magento) in addition to a single marketplace, make an average of 38% more revenue than those with no marketplace presence. Additionally, those who have two marketplaces make 120% more revenue!
5. The Right Inventory Solution Can Be A Game Changer
Managing retail inventory and operations is challenging for every company, especially during Black Friday weekend. This year’s $10.4 billion in Black Friday sales all need to be properly tracked, processed, and shipped to prevent stock shortages and overselling.
Large retailers have expensive software systems to handle these critical tasks, but often small and mid-sized retailers struggle to manually track this information through disparate solutions and spreadsheets.
Key Takeaway for SMB Retailers: To master omnichannel selling, you need an efficient, centralized inventory management solution to track stock quantities, purchase orders, invoices, and reporting across all your sales channels. Having a single hub of information for your entire retail ecosystem will help you avoid shortages, overselling, and missed sales opportunities, while saving you time and resources during the hectic holiday rush.