Pre-Black Friday Sales….Are they working?
An interesting phenomena is playing out right in front of our eyes. This year, retailers are moving to Pre-Black Friday Sales in an attempt to acquire customers and their holiday budgets early. We’ve been monitoring these sales live and want to share our preliminary results.
Understanding the dataset
At Luz Data, we use data and machine-learning to gather and calculate the daily product sales for thousands of eCommerce companies. We randomly selected 100 of these eCommerce companies doing between $10M–$500M annually for our experiment (both publicly traded and private). These 100 companies are comprised of Fashion, Activewear, Swimwear, and Cosmetic industries.
In our sample dataset, about 1/3 of the companies ran a Pre-Black Friday sale between November 11-November 15 and 2/3 did not. The average discount percentage for the Pre-Black Friday sale group was 23% with a median of 20%.
For additional context, the average number of the instagram followers in the dataset is 1.2M. For the group that ran a Pre-Black Friday Sale, the average instagram following is 1.6M, for the group that did not run a sale, the average instagram following is 1.1M.
How much did each group sell?
To begin, we looked at our two groups (companies that did vs. did not run a Pre-BF sale) to determine how much retail value they sold each day over our time period.
We found that the group that ran a Pre-Black Friday Sale far outsold those who did not. This held true for every sub-industry as well.
How did each company perform in comparison to itself?
Next, we looked at the average daily sales from October 26–November 10 and compared that against our test period of November 11–15.
Our findings were that companies that ran a Pre-Black Friday Sale increased their average daily sales by over 57%. The companies that did not run a sale only increased by 8%.
To increase the robustness of our experiment, we then eliminated the top and bottom 3 companies of each group, but it did not change our results. The No Sale Group lowered to 6% growth and the Pre-Black Friday Sale Group lowered to 52%.
How did the sale impact which products were being sold?
We then looked at the Top 10 selling products during the Pre-Black Friday test period. Only 3 of those products were in the Top 10 from October 26-November 10. This suggests that customers responded differently to discounted prices, rather than purchasing more of the same.
By observation, it appeared that the 7 products that moved into the Top 10 were what we would classify as staple apparel (almost all black in color, no crazy designs, etc.).
Conclusion
Based on our analysis, we believe that Pre-Black Friday Sales are having a significant impact on customer purchasing behavior in 2020. The companies running promotions increased average sales over 57% and accounted for over 61% of the total gross sales volume (with only 1/3 the quantity of companies!).
We will continue to monitor sales during the holiday season, as well as post articles about specific industries. If you’d like access to the companies and product sales that makes up this dataset, you can find more information here.
