It’s hard to believe that the first “Cyber Monday” was only 13 years ago. The annual shopping event, together with Black Friday, has quickly become the busiest weekend of the year for online shopping.
In 2017, Shopify stores collectively processed over $1 billion dollars in sales during Black Friday Cyber Monday (BFCM)—further confirming that the online shopping phenomenon is now part of the mainstream.
While widespread awareness for BFCM unlocks more opportunities for small businesses, it also creates more competition to reach new customers:
- Advertising costs can spike during the sale weekend
- Stores switch from weekend-long sales to week-long blowouts
- Promotional emails flood the inboxes of every subscriber on your list
- Products are discounted at more than 50% off just to compete for consumer dollars
With all of this noise, standing out during BFCM is crucial to any brand’s success. That means coming up with a truly creative promotion, coupled with a sound game plan on how it will be executed, to achieve your business goals without getting drowned out by the competition.
Follow along with ecommerce expert, Corey Ferreira in Shopify Academy's Nov 16 webinar: Creating a Black Friday Cyber Monday Buying Frenzy. Corey shares the top strategies for increasing conversions during the shopping season.
The problem with blanket discounts
Since Black Friday Cyber Monday has evolved beyond a 4-day weekend sales event, you’re more likely to see businesses spreading their deals out in order to capitalize on the entire shopping season leading up to Christmas.
However, if you simply offer your customers a blanket discount on your entire store, it will be hard to drive continued interest in your sale after you announce in on the first day.
Your customers may also come to expect more than a 10 or 15% discount on BFCM weekend. With the growing popularity of welcome discounts and flash sales, saving at least a little bit on your online order is becoming the standard.
Jumping to a 40 or even 50 percent off discount just to compete during BFCM could end up hurting your profit margins. Here’s what you can do instead.
Why you should focus on average order value
Having a high average order value can offset your advertising costs and create a larger profit margin on every sale, which makes it an attractive alternative to offering a big sitewide discount for BFCM.
Here’s a sample comparison between these two promotion types:
1. Sitewide 25% off
- Average order value: $80
- Product cost: $20
- Discounted price: $60
- Advertising cost: $20
- Your Profit: $20
2. Buy 2 get 35% off
- Average order value: $160
- Product cost: $40
- Discounted price: $104
- Advertising cost: $20
- Your Profit: $44
By giving customers a larger discount based on quantity, you can significantly improve your profit margins on each order. As a result, many brands have turned to the “buy more, save more” promotional model.
Shopify merchants can offer these kinds of deals to their customers using Automatic Discounts. With Automatic Discounts, you can now set up a Buy One, Get One (BOGO) offer that will automatically give your customers a discount code based on the quantity of products they are buying. Best of all, customers won’t need to apply a discount code at checkout to get the deal, which makes purchasing even easier.
But a successful sale isn't just about enticing customers with a compelling offer—you need to ensure that it remains profitable for your business.
Set daily goals and work backward
It isn’t uncommon for businesses to start planning out their BFCM promotions several months in advance. With all of the hype around the holiday, it can seem like the only way to succeed is to out-plan the competition.
In reality, planning your sale shouldn’t take more than a few days—as long as you ask the right questions. Pairing a realistic plan with smart, achievable goals will allow you to define your success first and work backward to create your offering.
It starts with answering these six essential questions:
1. What is my overall revenue goal?
When setting your top line revenue target, make sure to use historical sales data from your store to create a forecast. Setting unrealistic goals can lead to careless overspending on advertisements or inventory.
If this is your first BFCM, you can use store performance data from previous months to determine what’s possible. Look at your website conversion rate, traffic and email performance as indicators of what your BFCM could look like.
2. How much revenue do I need to make each day to meet my goal?
If your sale is running from Black Friday to Cyber Monday, you can divide your revenue goal across the four days. One day’s offer might feature your best discount, resulting in most of your overall sales. Or you might plan to entice new shoppers on each day of the sale with a new deal. Either way, breaking down your revenue targets by day to meet your overall revenue goal will help you plan out your promotion.
3. How much traffic will I need in order to reach my goal?
In order to meet your goal, you’ll need to drive the right amount of top-of-funnel traffic to your website. That number is determined by your revenue goal, your average order value, and your website conversion rate. Set goals for each of these metrics ahead of your sale and track them each day to make sure you are hitting your targets.
4. Where will this traffic come from?
Probably the most important piece of planning should be your traffic mix. Email offers the most predictable source of traffic to start.
By looking at the size of your email list, the average open rate, and revenue generated through email you can predict how much of your traffic will come via email.
5. What is my advertising budget?
You should determine your advertising budget based on your revenue goals, too.
For example, many store owners will run ads prospecting to new customers or retargeting previous website visitors prior to their sale. In order to determine how much you’ll need to spend on these traffic sources to reach your goals, you’ll need to look at your historical performance like cost per-one thousand impressions (CPM) and return on ad spend (ROAS).
6. What is my target profitability on each order?
If you haven’t already, do a cost analysis on all of your products to understand what your profit margins are. Knowing these numbers, and using them to determine your target profitability, will let you hone in on what your actual deal might look like.
After taking into consideration your product costs and estimated advertising costs, you will be able to determine how much room you have left to offer a discount.
You may find out that you need to bundle products in order to maintain profitability, or that certain products can be discounted more heavily.
6 creative promotion ideas for Black Friday Cyber Monday
Running a successful sale involves more than just planning your store traffic and profit margins. Most of your overall performance will be determined by how creative your offer is and how you market it to potential customers.
While coming up with a truly unique sale will require some brainstorming, here are a few lesser-known ideas you can use for inspiration.
1. Put together a mystery bundle
Bundling together products is one of the easiest ways to provide more value to customers while also increasing your store’s average order value, which is essential for retaining a healthy profit margin for your business.
A mystery bundle takes this concept even further by creating a bundle with all of your best products and offering a significant discount for those willing to buy everything.
To make the offer even more enticing, you can keep some of the items in the bundle a “mystery” and slowly reveal them on each day of the sale. By revealing the items one at a time, you can appeal to a different segment of your customers each day and drive consistent traffic and revenue throughout your entire sale period.
2. Gamify your offers
If you haven’t experimented with gamification—allowing customers to "play to win" your offers—BFCM is a great opportunity to do so.
By incorporating gamification into your store you can get more engagement from the new visitors you can expect to drive from your BFCM campaign.
Gamification comes in many forms, but there are a few approaches you can set up and easily try using Shopify apps.
Wheelio is an app that turns email collection into a fun game of chance, in which your customers spin a wheel and hope to land on a big discount: 30% off orders over X, free gift with purchase, etc.
The wheel is meant to increase email opt-in rates for new visitors and re-engage your existing customers by offering a new way to save on their favorite products.
Dealio is another app that creates a similar game-like experience, where customers “scratch” a card on a product to reveal limited time discounts. Unlike Wheelio, it can be used to promote bundle deals to aid in increasing your average order value along with conversion.
3. Break it down into daily deals
Keeping the momentum and excitement throughout your entire sale period is one of the most challenging aspects of an extended BFCM campaign. Successfully engaging new shoppers during a 4, 5, or even 7-day period may require you to create exclusive 1-day sales on specific products.
Canada’s Hudson’s Bay Store runs single day offers called “Bay Days,” where they choose different product deals to highlight each day throughout a long sale period.
If you sell several categories of products, this type of promotion creates several opportunities to focus on individual segments of your customer base. Having a daily (or even nightly) deal may also improve email open rates since each day features fresh content and a new limited time offer.
4. Offer a free gift with a purchase
Although BFCM is perhaps the most socially accepted time to put your products on sale, many brands still fear losing their luxury appeal by discounting their merchandise. An alternative way to take advantage of the holiday rush without slashing prices is to offer a gift with a purchase.
A typical "gift" usually consists of a free low-cost item with every sale. You also may want to consider offering a free high-value or limited edition item with a minimum spend, which can help make your gift stand-out amidst a sea of other offers.
Whatever gift or bonus you decide on, aim to create a sense of urgency and encourage customers to take advantage of the deal before it’s gone.
5. Partner with influencers
Partnering with influencers to promote your product can be an effective way to build widespread brand awareness and trust. Done the right way, influencer marketing can also drive direct sales during your seasonal campaigns.
The key to setting up a successful influencer promotion is knowing in advance how your product resonates with their audience. Look amongst those who you’ve had some success with in the past and choose your top performing influencer partners to promote your sale.
Creating an exclusive coupon code or deal that is catered to an influencer's followers will help personalize the offer. Additionally, having the influencer curate a bundle of their favorite products builds a more authentic connection to the products they’re promoting.
6. Donate to a cause
One trend that seems to be growing is the number of brands choosing to not run any traditional promotions at all. Instead, many of these companies opt out by donating a portion or even all of their proceeds to a charity. This approach not only appeals to shoppers who don’t want to participate in the seasonal frenzy but can strengthen your brand purpose with the right customers.
Everlane’s message firmly aligns with the brand’s values of working with ethical factories, which strengthens consumer trust in their company.
The movement toward charitable giving has taken off so much that it now has its own day of celebration, known online as #GivingTuesday. The Give & Grow app makes it easy to personalize Giving Tuesday, by providing a place where customers can choose which charity they want their proceeds to be donated to.
Plan for profit this Black Friday Cyber Monday
Every year the pressure and planning for Black Friday Cyber Monday seems to begin earlier and earlier. The potential upside for a business running a promotion during this time has been well-documented, and most companies are eager to get in on the action.
However planning your sale itself should not take up the lion’s share of your time as long as you’re asking yourself the right questions and setting smart, achievable goals. Executing your sale will rely on coming up with a standout offer that is not only unique to your customers but profitable for your business.
Taking the right steps on both of these fronts, as we’ve outlined here, will allow you to get the most out of the holiday shopping season.
More resources for making the most of your BFCM: