A pitch Black Friday? Key takeaways and learnings for hospitality

Black Friday is fast overtaking Boxing Day as the UK’s biggest annual discount frenzy, with consumers spending a record-breaking £2 million-a-minute during this year’s event. Shoppers were expected to spend £2billion more in 2020 than last year’s Black Friday. However, with the Covid-19 restrictions keeping shoppers at home and businesses shuttered, it’s been widely reported that the online sales surge hasn’t been enough to make up for the loss of in-store and venue traffic. 

According to reports:

• Black Friday sales fell by more than a 10th compared with a year ago
• Barclaycard found that overall payments made to retailers on Friday had dropped by 16.7% compared to a year ago
  

Whilst Black Friday has become a mainstay event in the UK’s trading calendar, it has only been adopted by hospitality relatively recently. The industry is in a torrid state with the pandemic restrictions biting and revenue streams severely hampered. Pre-sold revenue through gift cards sales and at-home experiences are amongst the few ways operators have been able to generate much-needed cash whilst doors have been closed - alongside pivoting to takeaways and selling retail products directly to customers. 

We launched Toggle in October 2018, so last year was our first proper foray into Black Friday. It’s provided a robust foundation to identify shifts in year-on-year trends and an indication for how December sales are likely to unfold:

• The data is drawn from data for Black Friday (Friday 27 November) through to Cyber Monday (Monday 30 November).
• Our stats are from our Togglers only and we haven’t looked at data from elsewhere.
• A broad range of clients are included in the data: casual dining, fine dining and late night.
• The demographic data is available only for customers using both Airship (our CRM platform)  and Toggle. 
  

Here are some quick stats for online sales during this year’s Black Friday:

• Overall 42% uplift in Black Friday sales compared to last year
• Tenfold daily increase in sales compared to an average day 
• Women continue to make up the bulk of Black Friday customers (58% of sales)
  

Takeaways

People still love Black Friday.

Despite the pandemic forcing the high street to close its doors over Black Friday weekend, we experienced a 42% uplift in sales compared to the same period last year. 

As expected, online dominated and saw a 117% increase on last year’s digital sales, offsetting the capitulation of in-venue sales, which dropped by 97%. 

Gift cards continue to appeal to a broad age range. 

The weekend’s biggest spenders span across a large age range, with those aged 21-30 making up the biggest proportion of sales (35%) in 2020. This is a leap from 21% in 2019, where people aged between 31 and 40 made up the greatest percentage of sales. Spend continues to drop off substantially amongst those aged 65+ years old. The demographic data also reveals a continuation of women being the main driver of gift card purchases during Black Friday.

It’s clear that customers are happy to pre-buy credit with you for a discount. The interesting point here is that around a fifth of gift cards expire after 12 months. Our feeling is that customers actually buy for themselves so it might be that the ‘breakage’ (when card value expires) is less than 20%. Only time will tell. It is also worth flagging that 18% of gift card recipients will become regular customers, with their first visit heightened by the fact that it is already paid for. 

Learnings 

Here are our key learnings from this year’s Black Friday event:

1. Bullish Black Friday offers have proved fruitful for a number of hospitality businesses on our platform - including a premium restaurant and cocktail bar operator selling £25,000 worth of gift card sales over the weekend with a 20% off offer. 
2. Competition is fierce, so it is advisable to go hard early and let your customers know to expect offers in the lead up to Black Friday. The Devonshire Arms, a family-run local village pub in Derbyshire, generated £18,000 over three days with a 50% off gift card offer in the lead up to Black Friday week.
3. Think beyond gift cards. A dinner for two including a bottle of wine or a cocktail masterclass sometimes goes down better than a gift card - it’s more tangible as an experience which can be shared. You also get a perception of increased value which can lift the average transaction value. A national restaurant operator enjoyed a 95% uplift in like-for-like Black Friday sales this year thanks to a bundle offer. 
4. And even if you choose not to discount, it is still well worth creating a compelling webstore offering gift cards, at-home experiences, retail products and cook-at-home kits.  An independent restaurant in Sheffield rode the Black Friday wave without discounting this year, seeing a 625% increase in like-for-like sales compared to last year!
   

Dan Brookman, CEO of Toggle, said: “The sector uncertainty has definitely affected sales. I believe the public are quite worn down at this point and the constant battering hospitality is taking is having an effect. What’s encouraging as we go into Christmas is the news of the vaccine which will help fuel consumer confidence in gifting their favourite brands, safer in the knowledge that they should be reopening fully in the spring.

“Black Friday has a long way to evolve for the sector. Brands are quite rightly fearful of discounting - however, Black Friday can stimulate brand growth with retail and experiences with added value activity. There’s no getting away from the fact that customers are looking to spend.”