30 Day + 90 Day Plan - The Longest Black Friday Ever
That looks fun…
On August 1, the clock struck Q4 + BCFM planning for many DTC companies. It happens every year. Folks emerge from the July 4th & summer-break attention lapse, and everyone collectively realizes “oh shit, I’ve got three months to figure out and execute a plan to safeguard the year.” I’ll admit…I did that. Did you?
Now 20-some odd days into those three months, I’ve had enough time to take in some data, think hard about what’s ahead, and come up with a framework that I believe will maximize revenue and profitability for my clients during a period I’m now dubbing “The Longest Black Friday Ever.”
Why I Expect the “The Longest Black Friday Ever”
Craft Growth Concepts works primarily with small outdoor and outdoor-adjacent brands. It’s a pretty sexy category with a lot of competition from all sized players. It’s also a category that saw some of the strongest tailwinds during the covid boom, which led (in my opinion) to some pretty aggressive forecasting (broadly speaking) in the years that followed. I say this last part, because I was a bit guilty of some “up-only” thinking as well.
If you didn’t read the news from brands like Black Diamond and Columbia or notice the early and aggressive clearance pricing this summer (looking at you bike industry 👀), then expect this: many brands are playing catch up on 2023 revenue targets. On top of that, there is soooo much outstanding inventory on the books. So far this year, there has been a well documented softness in wholesale in my vertical, and I expect DTC to have to pickup a lot of slack.
I don’t think this is unique to the outdoor industry either. Across verticals companies are dealing with overly optimistic forecasts, declining returning customer revenues, excess inventory, or a slew of zombie companies that have long since lost profitability in the new high-interest world and are operating in under-the-radar liquidation. (Lunya Sleepwear would be an example).
There will be significant pressure for companies to turn as much of this inventory back into cash over the next 6 months.
Ok…so…input number one for the “The Longest Black Friday Ever,” is the need to play catch up and liquidate excess inventory. But what else?
Input number two will be absurd competition for customer’s attention. I recently listened to two reputable DTC podcasts that recommended starting BFCM as early as November 1, sending 3-4 emails and up to 2 text messages a day during BFCM. I’m not here to litigate those recommendations, but I am certain that hundreds, if not thousands of DTC brands will be operating in that neighborhood. I pray for all of our inboxes…
Input number three will be a more limited total customer purse this holiday shopping season. My working hypothesis on Q4 2023 is that customers will spend slightly less than they did last year across all BFCM. I’ll admit, that’s more of a gut feeling that I hope is wrong, than anything backed by data. Counting on less overall consumer spending has been a pretty reliable hedge on my entire 2023 strategy so I’m not changing now. Though I will note, I’ve seen predictions to the contrary. There are no right answers in DTC marketing, simply better probability driven planning and decision making (more on this in another post). Gun to my head, I put the above prediction of less per-customer total purse at like 60-40…or like 65-35.
Alright to recap “The Longest Black Friday Ever” line of thinking, we’ve got:
Brand playing catch up or sitting on a ton of inventory (or both).
Unbelievable competition for attention.
Less total consumer spend.
Yikes! We’re in for loooong on-sale season. Doesn’t sound fun…or does it?
The 30 Days + 90 Days Plan - How To Find Success During “The Longest Black Friday Ever*”
*how I’m gonna try and do it anyway
On my walk the other morning I had an epiphany. No sense lamenting “The Longest Black Friday Ever”, embrace it…and make it even longer 🫠🤯.
Wait, Kevin, you want to invite more executional and margin-testing pain during an already painful period of executional and margin-testing pain? Yes, yes I do. No mellow January this year, time to start thinking like a fitness brand, Q1 to the moon!
Introducing the 30 Days + 90 Days Black Friday Plan™…(but not really ™) to manage “The Longest Black Friday Ever”
Full disclosure, the specifics of this plan are far from solidified. Right now this is more of a way to begin thinking about the next six months and make as much lemonade out of the heavy discounted lemons to come. Proceed beyond this point at your own caution.
Here are my expectations based on the above for Q4.
Consumers are gonna see 30-60 days of BFCM deals starting somewhere between Nov 1 & Nov 15 lasting through EOY 2023. Yes this will be the longest BCFM ever.
These deals and offers will be the most aggressive and heavily promoted in recent memory.
Standing out is gonna be as hard as it’s ever been.
This period of BFCM related discounting is the “30 Days” in my 30+90 plan. My executions during this time period will take the above assumptions into account. I might be forced to discount more aggressively than I would have wanted, run promotions longer, or start earlier. We’ll see as we get closer to the actual event.
Ok so what to do about that? As of right now my plan is to:
Try and convert loyal customers as early as possible. I want to make sure that my brands get a piece of that potentially more limited customer purse for this higher converting audience. That likely means early & special offers to VIPs, etc. This will be an excellent time to explore a segmentation & personalization strategy to make every customer feel spoken too with personally relevant messaging.
Embrace the year of heavy discounting and use it as an opportunity to grow new customers. Everyone will be on sale like mad this year so I see little to no threat to “brand perceived value” (which I’m somewhat skeptical of anyway). My marketing & offer strategy will have a heavy focus on new customers. I’ll be willing to adjust my offer strategy as I see the race to the bottom unfold in real time.
Prep heavily for the 90 days after BFCM to reconvert as many customers from this BFCMM new customer cohort in that timeframe. <- This is the key takeaway
Why The 90 Days Post BFCM Will Be Critical To Success
The 90 days after BFCM will be the chance to realize value in all that excess discounting we’re all about to have to leverage. My goal is to drive second or even third sales in this cohort before the end of Q1 2024. Since recency is one of the largest influences on returning customer purchases, my reconversion effort will start the day I finish my Cyber Monday promotions. Developing loyalty in this 2023 BFCM new customer cohort will likely separate a “Meh that was pretty good” kind of BFCM into “high-fives all around” kind of BFCM.
This period represents the “90 Days” of my plan. This is how I’m approaching it:
Determine the 90-day customer value and purchase frequency of 2021 & 2022 BFCM new customer cohorts - this should be easy with Shopify’s new customer cohort report. (I love this report!)
Determine a more broad 90-day customer value and frequency for your store in general…like say, last 12 months or something. It’s up to you.
Use these benchmarks to establish the 2023 goal for 90-day customer value. Develop tactics to meet that goal.
Track this 90-day customer value on an ongoing basis through Q1 2024. Course correct as needed.
I don’t have my specific tactics yet, but I’m thinking of a few things right away. I’ll retool and lengthen post-purchase automations for this period. Try Buy $X Get $Y gift card promotions during BFCM to encourage a follow up purchase. Create BFCM new customers segment-specific marketing through the entirety of Q1 2024 with executions like personalized offers on complimentary products. I’m gonna hit these people hard.
The Hidden Opportunity In Q4 2023
So…that’s the initial gist of the 30+90 Plan to combat “The Longest Black Friday Ever.” Embrace the storm of discounting and look to reconversion opportunities.
Before this plan, I found myself dreading the upcoming Q4. The race to the bottom with deep discounts crushes my soul a bit. But with the 30+90 plan, I’ve got a new strategy ahead of me that I haven’t necessarily ever tried (at least explicitly). A new strategy means new data. No matter what that data tells me, I’m guaranteed to add a few new tools in the toolkit. The chance to continually improve is what keeps me in this business. No matter how the next six months play out, I’m confident that driving repeat purchases and improving loyalty of this 2023 BFCM new customer cohort will be healthy for my brand’s future prospects no matter how much we have to discount in Q4.
Good luck out there this Q4. Hope you kill it!
