Buying Behaviour Shifts and the Implications on Black Friday

Buying Behaviour Shifts and the Implications on Black Friday

20th November 2018

With Cyber Weekend fast approaching, and with over three quarters of UK retailers taking part, many businesses are preparing for an increased number of web orders in-line with discounts being offered. In a modern society where we are becoming increasingly reliant on technology and where the ecommerce industry booming, there are shifts in buying behaviour which retailers should consider this Black Friday…

To give a general overview of current retail trends within the UK, Deloitte (2018) conducted a report which states that online sales represent nearly 20% of all retail sales. Online sales are growing at ten times the rate of store sales. The ecommerce share of retail revenue continues to steadily grow in the UK with 14.4% in 2015 to 18% in 2018 (Statista, 2018).  In the first half of 2018, there have been more store closures, administrations and CVAs than in the whole of 2017. From this it can be surmised that, shopping online underpins significant growth for businesses both currently and in the future. In the current economic climate, it is simply not enough to capture the initial sale. Ensuring a smooth post-sale digital consumer journey (inclusive of the delivery process), is vital to enable growth for businesses. From a Black Friday perspective, Black Friday and other associated events generated £1.4bn worth of sales for retailers in 2017, which was up 11.7% on the previous year (BBC, 2017). On Black Friday 2017, 41% of sales were made through a laptop or desktop and 31% through mobile (PwC, 2018).

As online retail sales are steadily increasing, it is important to investigate the reasons behind this increase. Ofcom note that the UK is ‘now a smartphone society’. They state that, ‘we now spend almost twice as long online with our smartphones than on laptops and personal computers. On average, mobile users spent nearly two hours online each day using a smartphone in March 2015 (1 hour and 54 minutes), compared to just over an hour spent online by laptop and PC users (1 hour and nine minutes)’. The surge in browsing on phones has been contributed to by the rise in smartphone ownership (as per figure 1) and a change from 3G mobile networks to 4G.

Age

Percentage Owning a Smartphone

16-24

95%

25-34

95%

35-54

91%

55-64

51%

Figure 1. Smartphone Ownership (Statista, 2018)

Along with a dramatic improvement in terms of technology, people’s buying behaviours have also evolved due to a shift in the socio-cultural climate. Factors such as an aging population, rise of the ‘millennial’, individuals spending longer at work, a move away from the nuclear family set up and a rise in single person households have contributed towards this shift.  

Traditionally, the consumer decision making process consisted of recognising a need or desire, going into a bricks and mortar shop, selecting the product based on word-of-mouth reviews and other such primitive research methods, before purchasing the product. Due to changes in the socio-cultural make up of society and technology becoming a vehicle to enable online activities; buying behaviours and ultimately the consumer decision making process has evolved.

The ‘millennial’ generation and technology are just two aspects that have changed the consumer decision making process. The ‘millennial’ generation are spending longer at work and are increasingly residing in single person households therefore requiring convenience, for example, getting your ASOS order or Tesco food shop delivered at a convenient time to you. Access to technology and search engines also enables the comparison and research phase to be of an in-depth nature, allows for a much quicker completion time and permits for the consumer to ‘go beyond the shelf’.

It is also interesting to note that the percentage of customer orders that use click and collect as the fulfilment option (for multichannel retailers) is higher through smartphones (35%) than tablet (30%) and desktop (29.5%). This could be linked to the rise in a ‘millennial’ generation, as the high percentage of smartphone ownership amongst those of this age (as per Figure 1) and their apparent need for convenience. Consumers can order and pick their order up, instore, when convenient to them such as, on the weekend or during their lunch break, meaning they don’t have to worry about missing a designated delivery slot.

Based on the shift in buying behaviours, retailers need to recognise the importance of mobile shopping, ensuring that their website and application (if applicable) is coherent and ergonomic for the first stage of the consumer decision making process, pricing is competitive for during the price comparison stage, stock is easy to find to ensure smooth dispatch and the entire delivery process is as seamless as possible.

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