BLACK FRIDAY IS BECOMING LESS WORTHY OF INVESTMENT FOR ECOMMERCE, RESEARCH FINDS
Research from ecommerce data specialist, Conjura, shows that the return on investment for ecommerce businesses over Black Friday has continually declined for the past three years. This data indicates that brands need to better target their Black Friday comms to attract the right audiences and customers.
Conjura’s Black Friday benchmarking study analysed data from businesses across multiple categories between 2018 and 2020. It found that customer acquisition costs for Black Friday week are 13% higher relative to other times of the year as calculated on paid digital media.
Fran Quilty, CEO of Conjura, says, “I don’t want to suggest that eCommerce businesses should avoid Black Friday week, it still accounts for almost a tenth of annual revenues across categories and revenue peaks are three to four times higher than on the average day. It remains an important annual event for driving customer acquisition, however what’s important is attracting the right customers.”
The six-month lifetime value of customers acquired during this period is 9% lower than the average for the rest of the year. Repurchase rates were also consistently 5% lower. Affiliates were found to have the highest return on ad spend, while paid social had the lowest. The data also shows that Black Friday is becoming less attractive to customers as the level of discounting has drastically fallen from an average 89% in 2019 to 19% last year.
“Businesses should look at the data beyond the short-term revenue spikes to understand if Black Friday really is the best option for them. For instance, it is better suited to businesses selling big ticket items, such as furniture, or those structured around repeat purchases, rather than for FMCG brands,” adds Quilty.