How AI has Changed Black Friday and Cyber Monday


On November 29 and December 2 of 2019, Black Friday and Cyber Monday are a time of great excitement for retailers and consumers all over the world. From an eye-boggling discount deal to amazing in-store offerings, if retailers play their cards right, this two-holiday promotional period can be a truly great time to skyrocket their yearly sales. 


Often, places like Best Buy, Walmart, Amazon, and Target stretch their saving promotions across multiple days before the four-day window, with some retailers even posting Black Friday ad leaks from October.


With the recent Black Friday online sales hitting an all-time high, it is more important than ever before for retailers to look ahead at what they can do to improve their business to meet ever-evolving consumer demands. 


Taking a closer look at sales

Based on Mastercard SpendingPulse, US retail sales have increased between November 1 and December 24 from the prior year, with the data showing that holiday retail sales being the highest in years. According to the data, online shopping grew 19.1 percent, although they found that online sales were highest on Thanksgiving Day, not Black Friday. 


While Black Friday online sales are higher than they’ve ever been, in-store traffic has been declining. In 2018, the store traffic fell 9 percent from the year before, with reports also finding that the number of people visiting stores in 2017 was 4 percent lower than the year before that. 


Looking at the past 15 years of retail sales data, we can see that the average annual increase is 2.5 percent. It wasn’t until the recession that hit in 2008, where there was a 4.6 percent decline. 




Although consumer behavior is moving more online, this does not mean that retailers must rule offline strategies off. Despite being the heaviest users of online shopping, reports indicate that Millennials and Gen Z do enjoy the in-store experience


When it comes to the types of items that are most in-demand during this period, top purchases included video games, tech (laptops, smartphones, and earphones) and toys. Data shows that the average order value (AOV) was up 5.9% YoY, hitting a new record of $168.




Back in 2018, the data showed that the top-selling products for the Black Friday period were technology. The dominant player Amazon showed that its top 5 best sellers from the year before had massive discount deals – from its own branded Echo Dot to Bose noise-canceling headphones. For Cyber Monday, it broke online sales record with $7.9 billion in revenue in 2018, with a 19.3% increase from the previous year. 


With more and more shoppers going mobile, this year’s Black Friday appears to be the biggest yet, with the US consumers having spent $7.4 billion online on the day itself, and $4.2 billion on Thanksgiving Day. In just two days alone, consumers spent over $11.6 billion online, with $2.9 billion of that coming from smartphones. This has made the Black Friday holiday the most important day ever for mobile sales.


How AI can be used to improve consumers’ shopping experience


  • Chatbot support – Several sources have stated that there has been an increase of 20 percent in conversion rate with brands that have live chat functionality integrated into their site. It is noted that a study by Gartner predicts that by 2021, around 15 percent of all customer service interactions globally will be managed by AI. For this reason, this has increased. For this reason, retailers are looking AI to craft personalized messages. 


  • Predictive analytics – Holidays like Black Friday and Cyber Monday offer retailers a treasure trove of data to work with. Leveraging these vast amounts of customer data and integrating machine learning algorithms can help identify on-going, changing trends. Not only does this help to meet consumer demands in real-time, but it can also ensure the retailer will have the right amount of stock and at periods of high demand, anticipating such trends enables retailers to capitalize.


  • AI-advertising – While AI may never replace human creativity, it has proven to be more and more effective in terms of amplifying advertisements. Using historical sales data, AI can be programmed to target specific consumers, based on their age, geography, etc. Advertisers and marketers can AI to create more persuasive ads. For example, last year, IBM Watson had composed an entire script for Lexus, and Best Western used AI to create a more personalized ad campaign for the online travel market.  


Predictive analytics for retailers

During the Black Friday period, retailers have to manage inventory and distribution with as much efficiency as possible. If not, they will be left with unsold inventory, which will only hurt their bottom line. With machine learning, retailers can look at their list from both abroad and individualistic level, even receiving recommendations that can help to predict which items require immediate replenishment. 


Intelligent machine learning systems can account for many factors, both seasonal and ad-hoc. It takes a look at multiple data sources to create better, more accurate predictions of future sales. These suggestions can optimize stock movement and ultimately, cut out waste. Not only can retailers boost sales and prevent unwanted deadstock, but they can also learn to increase the relevancy of their products, and personalize the shopping experience. 


Final thoughts

With every passing year, efficiency appears to be the driving force for retailers to make the most on consumer-based holidays like Black Friday and Cyber Monday. Managing inventory and monitoring orders with greater effectiveness can help to increase sales, making the holiday period quite a profitable one. 


According to experts in the supply chain, retailers can best prepare for days like Black Friday and Cyber Monday by having closer collaboration between every level – from production, marketing, and logistics departments. This will increase the likeliness of meeting consumer demands. 


Retailers need to ensure that their website is up to speed, as Google states that nearly half of all the visitors leave if a mobile site doesn’t load within three seconds. This is especially the case when it comes to grabbing Black Friday and Cyber Monday deals. 


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