DTC Briefing: Startups bet on simpler Black Friday deals to coax price-conscious shoppers
This is the latest installment of the DTC Briefing, a weekly Modern Retail column about the biggest challenges and trends facing the volatile direct-to-consumer startup world. To receive it in your inbox every week, sign up here. More from the series →
This is the latest installment of the DTC Briefing, a weekly Modern Retail column about the biggest challenges and trends facing the volatile direct-to-consumer startup world. To receive it in your inbox every week, sign up here.
With Black Friday promotions well underway, there’s no shortage of countdown clocks and so-called surprise sales urging customers to shop now or risk losing out on incredible deals.
But this year, as inflation threatens to put a damper on holiday sale, some startups are betting on a different tactic to win over shoppers: offering just one sale, with the same discounts that will last for weeks.
As Black Friday sales start earlier each year, many retailers have grown accustomed to offering different promotions throughout the month– say, 30% off sweaters one day and 40% off yoga pants the next– to drum up excitement. As a result, November has turned into a month-long sales extravaganza, leaving most startups feeling like they have to participate in some way.
But more startups are betting that a simpler sale will ease the strain on their marketing and customer service teams. At the same time, brands are also hoping to reassure customers — who are especially price-conscious this year due to inflation — that they won’t miss out on a better price if they choose to shop later, by giving them a heads up as to exactly when their sale will start and end.
Margaux, a startup that sells women’s shoes, emailed customers on Nov. 16, letting them know that the company’s Black Friday sale would kick off on Monday, advertising 20% off through Nov. 28. Cookware company Great Jones kicked off its Black Friday sale on Nov. 7, offering customers up to 50% off through Nov. 29. And luxury bag brand Caraa is advertising 25% off everything through Nov. 28.
Seven-year-old oral care company Quip has experimented with a variety of sales tactics in November over the years. Shane Pittson, the company’s vice president of growth, said that the company has previously experimented with hosting two different sales in November: one that’s held the week or two prior to Black Friday, and one that is held the day after Thanksgiving, during the traditional Black Friday sales period. But this year, the company decided to scrap the two events and host just one sale — which it is calling its Black Friday sale. From Nov. 17 through Nov. 29, customers can get up to 50% off.
“Other retailers are pulling sales significantly forward,” Pittson said. “So as people are browsing, shopping, considering what to purchase and when for the holidays, it is a matter of ensuring that we are staying competitive and — not necessarily driving FOMO with a different event like we maybe have done in years past.”
Pittson also noted by advertising just one, longer Black Friday sale, Quip has also been able to incorporate channels with a longer lead time — like direct mail — into its Black Friday strategy for the first time. “The longer timeframe has been helpful in terms of reaching more potential customers.”
The pandemic in particular led to an uptick in earlier-than-ever Black Friday sales, as retailers scrambled to keep their websites from crashing and their warehouses from being overwhelmed while fewer shoppers visited stores. Nowadays, it’s not uncommon for brands to kick off their Black Friday sales in early November.
Not every brand has adjusted their Black Friday sales timeline. Caraa founder Aaron Luo said that his company always makes its sale available to email subscribers the week before Black Friday, and pushes it sitewide the Monday before Thanksgiving.While Caraa is offering 25% off this Black Friday instead of its typical 20% in light of inflation, Luo said that for his company, he feels its important to start and end its Black Friday sale at the same time every year.
“The moment you start messing around with trust and timing and percentage off on your brand, especially on a big holiday like Black Friday, I think you are going to start losing trust,” Luo said.
But this year, shoppers have also been inundated months ahead of Black Friday with promotions from big-box retailers trying to get rid of inventory in categories they over-indexed on. As a result, it’s gotten more complicated for people to keep track of when sales from their favorite brands will start and end.
Gradually, some startups have started playing on this in their marketing campaigns. For the past three years, men’s razor brand Supply has kicked off its Black Friday promotions by sending customers an email the day before the sale drops, urging them not to buy just yet — because their Black Friday discounts will kick off tomorrow.
“It’s a fun way to draw attention in the sea of Black Friday notices,” founder Patrick Coddou said.
But this year, more brands are taking a similar approach as Supply to not only to stand out among the competition, but also to appeal to shoppers whose budgets are tighter this year, and want to plan ahead for the best deals.
“We are sensitive to the data that this has been a challenging economic year for our customers, as well as for businesses small and large,” Great Jones CEO Sierra Tishgart said in an email.
Tishgart said that Great Jones decided to stick with the same discounts through November, save for a few short-term “gift with purchase” incentives throughout the month, so that Great Jones customers wouldn’t be “waiting or guessing when is best to shop.” Tishgart noted that the company also hoped that it would alleviate some of the pressure on Great Jones’ customer service team, and lead to fewer price-adjustment inquiries.
By hosting simpler — and earlier — Black Friday sales, there is a risk that brands will lose out on shoppers who are swayed by another last minute offer from a brand. But Supply’s Coddou said that his brand hasn’t seen much of that behavior. He added that November is already a record sales month for Supply, even as Black Friday has yet to hit.
“What we have learned is when you launch early, you sustain an elevated level of sales throughout the entire launch…but then you still get the Black Friday and Cyber Monday shoppers,” Coddou said.
What I’m reading
- Rothy’s president Roth Martin said that when the company released a capsule collection with Evian last month, it was the first collaboration the shoe startup has done in its 10 years of business. Here’s why the company has been slow to do co-branded products.
- 7-Eleven has one of the more unusual Black Friday promotions on the market: It’s offering one year of free access to anyone who signs up for its subscription delivery service, called 7Now Gold Pass, between Nov. 25 and Nov. 28.
- Amazon CEO Andy Jassy said a number of unspecified layoffs would continue into early 2023, leaving Amazonians feeling frustrated and uneasy as they wait to hear about the fate of their jobs, according to Recode.
What we’ve covered
- Unilever-owned brand The Laundress told customers to stop using all of its products after finding high levels of the bacteria Pseudomonas during testing.
- Hilma, a supplements brand that launched in 2020, is selling a majority stake to French pharmaceutical giant Biocodex. It’s the latest example of young startups exiting earlier and earlier as scaling a DTC business becomes more challenging.
- Cookware startup Our Place has opened its first retail store, on the popular luxe Los Angeles shopping street Abbott Kinney.