With the COVID-19 pandemic settling in some parts of the world, while causing continuing disruptions in others, it was inevitable that Black Friday Cyber Monday this year would be different vs 2020. Although the pandemic has shifted a lot of shoppers online, meaning a bonanza for eCommerce merchants, it’s caused massive supply chain disruptions that continue to cause shipping delays and issues with forward stock planning.
So with that said how did BFCM go this year? Our friends at Shopify recorded a 23% increase over 2020. It’s worth noting that 2020 was already a stellar year for eCommerce merchants globally so it’s heartening to see the growth continuing. Even in terms of trends the Shopify team found that 2020 trends carried over into 2021 with shoppers wanting to be more social (i.e browse and shop in app with Facebook), care about sustainability and where their goods are coming from, and finally mobile devices still being king for conversion. A whopping 71% of BFCM purchases were made on mobile devices which emphasises the importance of optimizing your site for being as mobile friendly as possible.
At Segments, we wanted to follow up on our recent BFCM webinar with Email All Stars and understand what worked for our merchants over BFCM. Our data science team reviewed key areas:
- Sales performance
- Payment platforms (which platform was the most popular to pay with)
- Sales from first time vs returning customers
- Percentage of discount codes used
With sales performance, our data science team found orders increased only marginally 0.7% but sales in actual dollar terms increased 7.74% with Average Order Values increasing 6.91%. These stats tell us that customers added more items to their cart and paid a little more for their products which is a positive trend for our clients as it showcases that their new collections and products are resonating more with shoppers as they purchase more products in the same order.
In terms of the payment platforms, Shopify as a payment method continued its increase to contribute ~57% of all transactions, while Buy Now Pay Later (BNPL) solutions like AfterPay increased only marginally contributing to 6.1% of all transactions. The payment platform mix shows the importance of offering your customers different payment solutions and keeping up to date with which BNPL solution is the most popular in your region and for your customers.
Now to the most important parts, who purchased more, first time customers or your existing / returning customers? Our team found that comparing to 2020, returning customers contributed to 59% of all sales which shows the importance of nurturing existing customers as it’s cheaper to keep a customer than acquire new customers especially during peak periods like BFCM where the average cost per click increased 89%.
The most interesting part though of all our research into BFCM 2021 was the reduction in customers using discount codes. As a percentage of customers, only 21% of customers used discount codes in 2021 compared to 33% of customers in 2020. That's a near ~30% drop in customers using discount codes which is amazing to see when you think about it. Fewer discount codes being used mean more margin for stores and more customers buying closer to full price.
We believe the reason this change occurs is because merchants are marking down existing stock without the need for customers using a discount code, thereby trying to reduce friction to purchase (i.e. if a customer is already getting the best price without needing a discount code you know they will convert much faster vs a customer hunting for a discount code then returning to your site which will be fairly unlikely).
In summary, BFCM 2021 was a great sales period and reinforced the importance of keeping your existing customers engaged and buying from you throughout the year. Read our 17 customer retention strategies that will keep customers coming back.