When Black Friday Comes

By Rick Ferguson

?

Besides being the name of a beloved Steely Dan song, Black Friday is also simultaneously the most exciting and the most terrifying day of the year for retailers. Every year sees winners and losers emerge from the shopping frenzy; every year, retail loyalty marketers examine the results for lessons to learn for the following year.

?

Black Friday 2024 is no exception. Early data from the unofficial holiday provides critical insights into shifting consumer behaviors and the growing role of technology in retail. For loyalty marketers, these trends underline the importance of adapting strategies to not only meet evolving customer expectations but also to capitalize on emerging tools and opportunities.

With that hook, here’s a look at the winners and losers of Black Friday 2024.

?

WINNER: E-commerce

This Black Friday, e-commerce sales demolished in-store sales to the tune of $17.5 billion—a 7 percent increase over 2023. Adobe Analytics revealed online spending peaked between 10 a.m. and 2 p.m. Eastern, with an astonishing $11.3 million spent online every minute.

?

For loyalty marketers, this shift to e-commerce signals a need to prioritize digital engagement. If your program is still tied solely to physical store visits, or if your loyalty efforts are still siloed between the physical and digital, then you may be hopelessly behind the curve. In addition to rewarding transactions, consider beefing up digital engagement by rewarding online behaviors such as offer response, reviews, and referrals.

?

LOSER: Brick-and-mortar retail

Traditional retail sales took a beating this Black Friday with a marginal 0.7 percent increase over 2023, while foot traffic dropped by 3.2 percent, exacerbated by weather conditions.

?

Although the numbers look bleak, this reality presents an opportunity to rethink the in-store experience and bridge the gap between the digital and the physical. For example, offering rewards for hybrid behaviors—such as buying online and picking up in-store (BOPIS)—can encourage foot traffic.

?

Additionally, integrating AI-powered tools in physical locations, such as interactive kiosks or mobile app integrations that guide in-store shopping, can enhance the customer experience and differentiate it from online shopping. Exclusive in-store rewards and events can also reintroduce excitement and value to brick-and-mortar shopping. These incentives can transform store visits from transactional errands into memorable experiences that foster loyalty.

?

WINNER: ?Mobile commerce

According to Adobe, 55 percent of those Black Friday e-commerce sales came via mobile devices—a 12 percent year-over-year growth rate. Mobile has become the centerpiece of the shopping journey, and loyalty programs must align with this reality.

?

Retailers should optimize their mobile apps for seamless user experiences. Features like personalized offers, gamification, and mobile-first rewards redemption can create a stronger connection with customers in their preferred channel.

?

Marketers can also drive engagement by creating mobile-specific campaigns, such as flash rewards for purchases made via app or instant cashback offers. Additionally, integrating mobile wallets with loyalty apps can simplify the redemption process and keep the program top of mind for customers.

?

And wither the poor retail storefront? Consider deploying location-based offers that trigger when a customer is near a store or using push notifications to share time-sensitive promotions during peak shopping hours.

?

LOSER: Black Friday

This year saw retailers experience Black Friday creep as consumers paused between the turkey and dessert to rack up $6.1 billion in online sales, up 9 percent from last year, highlighting a growing trend of shoppers starting their holiday purchases earlier. This “creep” suggests a shift in how customers plan and execute their holiday shopping.

?

Loyalty marketers should adapt by launching early-bird promotions and rewards campaigns well before Black Friday. Encourage members to accumulate points or unlock exclusive offers during Thanksgiving week to create a sense of urgency and excitement.

Additionally, loyalty marketers can use predictive analytics to identify which customers are most likely to shop early and target them with personalized offers that incentivize pre-Black Friday purchases.

?

WINNER: AI

The most striking takeaway from Black Friday 2024 is the role of AI. Salesforce reported that AI-driven chatbots and agents contributed to $14 billion in global online sales, while Adobe noted an 1,800 percent increase in AI-driven clicks compared to last year. Shoppers are not only warming up to AI—they’re actively seeking it out, with 20 percent using chatbots to find deals and receive recommendations.

?

Loyalty marketers must embrace AI to stay competitive. The deployment of AI-driven analytics to personalize rewards based on past behaviors, chatbots to help members navigate their redemption options, and predictive modeling to anticipate future shopping trends, will increasingly separate the retail winners from the also-rans’

?

Moreover, AI can enhance customer engagement through dynamic loyalty offers. For instance, programs could provide real-time points bonuses or personalized rewards during peak shopping periods, all powered by AI algorithms that analyze shopping patterns.

?

WINNER: Flexibility and Value

Economic pressures are pushing consumers to demand greater savings and flexibility. Buy-Now-Pay-Later (BNPL) services saw a healthy increase this year to the tune of $686 million dollars in transactions—with 80 percent occurring on mobile devices.

?

The popularity of BNPL services reflects a broader expectation for financial convenience.

Loyalty marketers can align with this trend by offering flexible redemption options, such as partial points payments combined with cash or BNPL.

?

Providing discounts on everyday essentials like groceries and fuel—rather than solely focusing on aspirational rewards—can make programs more relevant and appealing to value-seeking shoppers. Additionally, always-on value propositions, such as cashback deals or partner discounts, ensure that loyalty programs remain top of mind for members throughout the year, not just during the holiday season.

?

Pretzel Logic

Black Friday 2024 revealed a retail landscape twisted into a pretzel by consumer habits transformed by the lingering effects of COVID and inflation. For loyalty marketers, these trends are both a challenge and an opportunity. By prioritizing digital-first experiences, leveraging AI, and focusing on flexibility and value, loyalty marketers can not only adapt to these changes but also emerge stronger in the face of them.

?

The success of e-commerce, mobile, and AI this Black Friday isn’t just a data point—it’s a roadmap for loyalty marketers looking to innovate and drive deeper connections with their customers. Any major dude will tell you.

?

Rick Ferguson is host of the Loyalty Newscast and a partner at Loyalty Wired.