Black Friday is one of the biggest and busiest shopping day for retailers, and it appears to be going from strength to strength. According to data from Adobe, sales on Black Friday 2016 broke online records in the US, with $3.34bn being spent online; a 17% increase on the previous year. It also became the first day in retail history to drive over $1bn in mobile revenue, which totalled at $1.2bn, a 33% growth year on year.
Traditionally, Black Friday marks the start of the festive period and allows consumers to nab deals from retailers at extremely discounted prices.
As consumers turn more of their attention to digital commerce rather than physically visiting stores, how have payments kept up with this transition?
Going digital
Digital online savings website RetailMeNot reported that consumer spending over Black Friday weekend is forecasted to grow at a staggering 47% year on year. While most people complete most of their shopping on Black Friday, Cyber Monday sales are also expected to increase year on year.
“While Black Friday was traditionally an in-store event, technology has changed the way we shop, and more and more retailers are now using e-commerce to launch their sales campaigns before they feature in their physical stores,” says Oscar Nieboer, Chief Marketing Officer, Paysafe.
“This has the benefit of attracting a far wider audience. The expansion of e-commerce coupled with ever-growing smartphone usage has enabled the rise of “dual-browsing” with 41% of Brits now buying an item on a mobile phone while in-store.
“The rise of dual-browsing means perfecting the omnichannel experience is now more important than ever – retailers must make sure both the online and offline experiences are positive and hassle-free. A key part of customer experience is the payment process. While it is often the last step in the transaction, it’s arguably amongst the most important.”
Driving commerce online vs in-store
Cyber Monday was officially created in 2005 to boost commerce for digital platforms, as Black Friday was traditionally known for in-store discounts. Retailers have reported stunning sales records as consumers eagerly take advantage of the savings.
According to Adobe data, online sales over the 2016 Thanksgiving weekend (which ran November 24–27) totalled $9.36 billion, up 16.4% year over year.
A recent survey by Deloitte has also revealed that the average consumer is expected to spend an average of $1,226 during the holiday shopping season. The report also shows that survey respondents plan to spend 51% of their budget online, compared with 42% of those choosing to shop in-store.
Dependence on smartphones
In 2016, research by Adobe found that $1.2bn of transactions made over Thanksgiving weekend were on mobile devices.
Smartphones have become integral to the push to moving commerce online: they are a key factor in getting customers to buy earlier and on the move, rather than waiting to be near a laptop or tablet. And it’s no surprise that eager shoppers prefer to discover deals in the comfort of their own home rather than in store.
Mobile visits are predicted to outpace desktop and laptop purchases for the first time, according to new data from payments platform Adyen.
David Nunn, Head of Braintree Europe said: “The reason mobile commerce has increased drastically in the last few years is the removal of friction.
“The device knows pretty much everything about us – we can enable commerce experiences to be extremely seamless. The foundations of these enormous social networks will have a growth in the consumer base.”
The Deloitte Holiday Retail survey shows that 22% of respondents will be using smartphones to pay for purchases in-store with a mobile wallet, and 40% anticipate using a retailer’s app on their smartphone.
Enabling a frictionless experience
Despite the surge in online shopping and its overall accessibility for customers, an average of seven out of ten shopping carts are being abandoned on standard e-commerce sites. Cart abandonment can slow down digital Black Friday sales and can prevent consumers from a frictionless checkout experience.
Nunn emphasises the importance of contextual commerce to overcome cart abandonment, allowing consumers to interact with brands in their own preferred context – whether this is on their smartphone, desktop, or through an app.
“There’s still a long way to go on the basics of pure e-commerce. We’ve still got an average of seven out of ten shopping carts being abandoned on standard e-commerce sites, and that figure increases when analysing mobile commerce,” he adds.
“Retailers should look beyond just reducing checkout lines,” adds André Stoorvogel, Director, Product Marketing, Payments Group at Rambus.
“This is where in-aisle, scan-and-go technology comes to the fore, as it enables shoppers to simply scan items with their smartphones, checkout in-app and walk out of the store.
“In-aisle, in-app payments completely remove the need wait in line altogether, eliminating customer frustration, accelerating throughput and maximising potential sales. In the highly-competitive seasonal retail market, this a huge point of difference.”
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