How Online Businesses Are Approaching Black Friday-Cyber Monday 2022
As shoppers prepare for the all-out frenzy that is Black Friday and Cyber Monday (BFCM), e-commerce merchants and other retail stores are currently in a frenzy of their own. Preparing inventory, getting fulfillment operations ready, and tweaking the shipping process are only some of the work that goes into making the most of the holidays for merchants.
However, the hard work almost always pays off. Last year, online businesses made approximately 8.9 billion during Black Friday alone. The more recent holiday to come on the scene, Cyber Monday, adds an even bigger boon for e-commerce businesses.
But, due to the current state of the economy, the 2022 edition of the holidays presents a unique challenge for merchants of all sizes. To better understand how online merchants are approaching BFCM this year, we surveyed our very own Shippo users.
The results help us paint a picture of what has been happening behind the scenes as the two biggest shopping holidays draw near.
Expectations Going Into Black Friday and Cyber Monday
As any American can tell you, inflation is real and can be felt everywhere. In fact, the annual U.S. inflation rate in September 2022 was marked at 8.2%. For reference, the annual inflation rate in September of 2021 was just 5.4 percent, and in 2020 it was just 1.4 percent.
We asked merchants how the current state of the economy affects their attitude toward Black Friday and Cyber Monday. To no surprise, the majority of respondents (37.5%) said the current economic condition greatly affects their feelings about BFCM, while an additional 29.2% claimed that it somewhat affects how they feel about BFCM in 2022.
One aspect business owners should consider is that consumers are still planning on shopping during the holidays. In fact, over 80% of customers plan to shop on Black Friday and Cyber Monday.
Because of this fact, merchants are still expecting an increase in orders month over month; it just may not be as strong of an increase as they would like. In our survey, the majority of merchants (43.7%) expected an increase of just 20% or fewer packages delivered this month as opposed to other months. About 31.1% of merchants expect a 21-40% increase in packages shipped, and only 4.2% of merchants expect a 100% increase or more in packages delivered.
How Merchants Handle Inventory Before BFCM
Any anticipated increase in sales is worthy of preparing inventory ahead of time. How far ahead of time differs for merchants depending on what they sell and where they source their products from.
When asked how soon merchants order inventory for BFCM, the majority (33.7%) answered with August or earlier. Another 12.3% responded with September being the time to order inventory, while 17.2% responded with early October.
Ordering this early is in line with the supply chain delays that we’ve been experiencing since the start of the Covid-19 pandemic. While most of the world has put the pandemic in the rearview, the supply chain issues that stem from it have been slow to recover. This is why the sooner you can order, the better. However, depending on who you’re working with, there may still be time to order inventory.
Some other tips to help manage your inventory during peak season include:
- Looking at what your most popular SKUs are and doubling down on them
- Use discounts and sales to clear out older SKUs
- Figure out what’s trending in the market and order in accordance to that
- Reassess inventory after Black Friday and Cyber Monday since holiday shoppers will continue to buy in December.
How Merchants Are Going About Their Black Friday and Cyber Monday Sales
Shoppers are expecting the best deals of the season this time of the year, and that will especially be the case in 2022. Due to inflation, consumers will actively look and compare brands to find the lowest prices possible. In fact, 88% of shoppers will compare deals before making a purchase.
However, as a business, your costs have gone up as well. This puts e-commerce merchants in a tricky situation. When asked what factors contribute to their BFCM deals, 65% of respondents said prices from suppliers/manufacturers, making it the number one determinant.
Other leading factors included trying to clear out inventory (44.9%), past sales data (41.9%), current product trends (40.7%), trying to promote new products (37.1%), peak season shipping rates (35.9%), competitor prices and deals (32.3%), and cost of fulfillment partners (21.6%).
There was also a bit of disparity regarding the timing of when businesses start promoting their sales and discounts. Black Friday and Cyber Monday traditionally fall on the fourth week of November, but most merchants chose the first week of November (35.8%) as the time to start promoting BFCM deals. The second week of November garnered 25.5% of responses, and 19.4% of respondents said the third week of November is when they begin promotions.
As far as where merchants will be advertising these promotions, social media proves to be king having received 84.2% of total responses. The other places e-commerce merchants plan on advertising their sales are their own website 69.7%, through email 58.8%, online marketplaces (such as Amazon, Etsy, and eBay) 32.7%, display ads (9.7%), search engine ads (6.7%), and external website/publications (6.1%).
Some other notable places that merchants plan on advertising their deals include via text/sms marketing as well as through word of mouth.
Making sure your deals are priced correctly, visible, and up before Black Friday and Cyber Monday will be key to maximizing orders.
How E-commerce Businesses Will Handle Shipping
Free shipping during Black Friday and Cyber Monday, like any time of the year, will play a major role in how customers choose where to shop. In fact, 9 out of 10 consumers claim free shipping as the number one incentive to shop online more. Additionally, in our 2021 State of Shipping Report, 33% of consumers claimed they only purchase when free shipping is offered, and 20% of consumers said they would swap stores for free shipping.
With that, it’s no surprise that most e-commerce merchants plan on offering free shipping for BFCM. The difference lies in how it will be offered. About 27.5% of merchants will be offering free shipping no questions asked. The majority of respondents (35.3%) will be offering free shipping as long as customers reach an order value threshold and 10.2% of merchants will only be offering free shipping for certain products.
A sizable portion of merchants (26.9%) won’t be offering free shipping which can be due to the rising costs of shipping such as peak season surcharges and annual rate increases. Thankfully, merchants using Shippo can avoid peak season surcharges for UPS and many USPS shipments.
Another part of getting the lowest possible shipping costs is by diversifying your carrier-mix. When asked, over half of respondents (54.2%) said they’ll be using at least two carriers to deliver Black Friday and Cyber Monday orders. Almost a third of respondents (30.1%) said they’ll only be using one carrier and 15.1% said they’ll be using at least three.
The amount of carriers you use may also depend on your product category. For example, if you’re selling small items that are being shipped domestically, you may stick with USPS while if you ship large items and you ship internationally, UPS might be the better option. Rates can differ among carriers depending on the package size, weight, and distance it needs to travel.
Post-BFCM And How Businesses Will Handle Returns
While Black Friday and Cyber Monday mean a boom in sales is coming, it also means that a potential increase in returns is on the horizon. Many Americans buy Christmas gifts during Black Friday and Cyber Monday, but those receiving gifts might be inclined to return them.
With that in mind, we asked what percentage of BFCM orders merchants expect to be returned and a whopping 91% of respondents said less than 5%. This could be because many merchants surveyed either don’t accept returns at all or don’t have a returns policy that extends past Christmas.
About 31.7% of merchants said they only have a returns window of 15 days, 2.4% said their policy only extends to 7 days, and 12.6% don’t offer returns at all. Almost a third of merchants (32.9%) said their return policy extends to 30 days. While this allows there to be BFCM that get returned after Christmas, there isn’t much time to do so.
Regarding whether or not those returns will be free, 72.5% of e-commerce businesses said they will not be offering free returns for the holiday season.
No matter how you choose to set your holiday return policy, you’ll have to be sure that you make your return policies visible to potential customers. In our 2022 Returns Report, we found that 84% of online shoppers read the return policy before making a purchase. And, while the majority will not be offering it, our report found that 96% of shoppers are more likely to purchase if free returns are on the table.
Seasoned Merchants Biggest Pieces Of Advice For New Merchants
Preparing for Black Friday and Cyber Monday as an e-commerce retailer can be overwhelming, so we asked our merchants for their one piece of advice they’d give other merchants. We received 166 responses to this question but they can be boiled down to these top 10 tips:
- Have a well laid out methodology for ad placement, sales, and fulfillment utilizing data obtained from previous years of operation. Plan your advertising early.
- Don’t forget about marketing to existing customers
- Don’t cut your profit so low, you lose money on the labor and shipping expenses.
- Be vigilant of customer messages and respond quickly to manage expectations
- Calculate shipping time properly
- Make sure you have all the shipping items you need (boxes, tape, label paper, etc.)
- Prepare for a slow BFCM. Due to the poor state of the economy right now, numbers will be down drastically from historical averages. Don’t just focus on that weekend. The months of November and December are important as a whole.
- Do not take offense with orders that are returned–people can be picky, and you have to take it as a component of the digital-first world we have now.
- Be creative and sometimes doing things outside the box goes a long way.
- Communicate progress.
For Shippo’s biggest advice on preparing for holiday shipping, be sure to check out our latest e-book, How to Prep for Peak Season Shipping 2022. And while it may feel chaotic this time of year, remember to embrace the challenge and to spend time with loved ones this time of the year.