Podcast Summary: The Agile Brand™ with Greg Kihlström
Episode #615: Is Black Friday Still the Star of the Holiday Season? Featuring Joe Shasteen, RetailNext
Release Date: December 16, 2024

In Episode #615 of The Agile Brand™ with Greg Kihlström, host Greg Kihlström engages in an insightful conversation with Joe Shasteen, Global Manager of Advanced Analytics at RetailNext. The discussion delves deep into the evolving landscape of Black Friday, analyzing recent trends, consumer behaviors, and strategic shifts in retail operations. This summary encapsulates the key points, discussions, and conclusions drawn from their dialogue.

1. Introduction to Guest and Context

Greg kicks off the episode by introducing Joe Shasteen, highlighting his role at RetailNext, where he focuses on in-store shopper behavior and macro-level traffic trends. Joe explains his responsibilities, emphasizing the analysis of year-over-year and week-over-week traffic performance, especially during the holiday season.

2. Black Friday Weekend Trends

The conversation begins with an overview of the 2024 Black Friday weekend data. Early indicators suggested a 3.2% decline in in-store traffic compared to the previous year. However, final numbers showed a slight improvement, with only a 1.6% dip for the entire weekend.

Key Insights:

• Spread-Out Promotions: Retailers have been extending their sales periods, starting deals weeks in advance of Black Friday. This strategy aims to distribute foot traffic more evenly and reduce the peak congestion on the actual day.
• Staggered Deals: By releasing deals incrementally, retailers encourage consumers to visit stores earlier, enhancing the overall shopping experience and managing inventory more effectively.

3. Conversion Rate Dynamics

Despite the lower foot traffic, there was a notable increase in conversion rates by approximately 0.7%.

Joe's Perspective:

"Black Friday is typically a pretty good week for conversion and it was really good to see it go up this time around, especially with traffic declines."
(04:50)

This uptick suggests that consumers are more deliberate in their purchases, possibly driven by better deals and heightened purchasing intent.

4. Shifts in Consumer Behavior

The discussion highlights a trend towards intentional spending and high-value purchases. Shoppers are opting for fewer but higher-priced items, reflected in decreased units per transaction and an increase in average unit retail (AUR).

Drivers of the Trend:

• Economic Factors: Inflation has pushed consumers to prioritize essential and high-value items, limiting their purchasing power for lower-priced goods.
• Retail Strategies: Retailers are adjusting their offerings to cater to varied socioeconomic groups, providing a range of products from premium to mid-tier to accommodate different budgets.

5. Category Performance Analysis

Joe provides an in-depth look at which product categories performed well during the Black Friday weekend.

• Jewelry: Consistently strong performer, with growth of 7% in 2023 and 10% in 2022. This category remains resilient as consumers seek luxury gifts and self-indulgence opportunities despite economic pressures.

  "We saw conversion was up this year over Black Friday... provide that better experience for customers who are in the store on Black Friday."
  (09:52)

• Apparel and Footwear: Surged as top categories, surpassing expectations. Factors such as shifting weather trends and impulse purchases due to severe cold in regions like the Midwest contributed to this performance.

• Health and Beauty: Although growth was slightly moderated compared to previous years, the category remains robust. The slight decline this year is attributed to returning to more "normal" levels after exceptional growth in prior years.

6. Impact of Weather on Retail Performance

Greg and Joe discuss how external factors, particularly weather, can significantly influence regional retail performance.

Example:

• A sharp decline in traffic in the Midwest due to severe cold was later offset by a 9% increase on Sunday as temperatures rose.

Strategies for Retailers:

• Agile Staffing: Adjust staff schedules based on real-time traffic predictions influenced by weather.
• Online Integration: Enhance online shopping options and incentivize BOPIS (Buy Online, Pick Up In-Store) to accommodate customers unable to visit stores due to inclement weather.

"Making sure as much as possible that those deals are also available online... is going to provide that better experience for customers."
(16:03)

7. Evolution of Promotions

Joe emphasizes the shift from singular, high-impact sales days to extended promotions that span several weeks.

Benefits:

• For Consumers: Increased convenience and flexibility to shop at their own pace without the pressure of one-day events.
• For Retailers: Smoother inventory management, reduced in-store congestion on peak days, and enhanced customer satisfaction through better shopping experiences.

"Allowing the customer more flexibility to shop when they want to... provides a better overall shopping experience."
(16:41)

8. Omnichannel Integration

The integration of online and offline retail channels is becoming increasingly crucial to meet consumer expectations.

Effective Strategies:

• Seamless Experience: Ensure that online deals are mirrored in-store, facilitating a cohesive shopping journey.
• Personalization: Utilize data from loyalty programs to offer personalized recommendations and streamline the shopping process.
• Incentivized BOPIS: Encourage online purchases with in-store pickup options, enhancing convenience for consumers.

"Allowing those carts or those sorts of recommendations to be built out so that the consumer is able to make better choices and more efficient choices is ultimately going to help to drive that loyalty."
(19:31)

9. Strategies for Value-Conscious Consumers

Retailers can adopt several strategies to cater to consumers who are more deliberate and value-conscious in their spending.

Key Approaches:

• Diversified Product Lines: Offer a range of products at different price points to accommodate varying budgets without diluting brand value.
• Curated Choices: Provide a select number of options to prevent choice overload, enabling consumers to make quick and informed decisions.
• Enhanced Customer Experience: Focus on creating meaningful interactions and personalized services to build long-term loyalty.

"Having the different options... allows consumers to have a choice, but then they can make more value conscious choices if they want to."
(22:05)

10. Predictions for the Remainder of the Holiday Season

As the season progresses, Joe anticipates a ramp-up in shopping activity leading into the final two weeks before Christmas. He expects traffic to stabilize and potentially increase, aligning with historical trends.

Category-Specific Predictions:

• Health and Beauty: Expected to bounce back, continuing positive trends from previous years.
• Apparel and Footwear: Likely to maintain strong performance as consumers finalize their holiday purchases.

"I would expect the holiday, you know, as we get into Christmas, we're going to start to see it ramp up... not expecting any dramatic changes compared to what we saw last year."
(23:32)

11. Staying Agile in Retail Analytics

In the concluding segment, Joe shares his approach to maintaining agility within his role. Key practices include:

• Flexible Team Dynamics: Leveraging a versatile team of analysts capable of adapting to changing demands.
• Process Optimization: Continuously refining tools and processes to respond swiftly to customer needs.
• Collaborative Prioritization: Focusing on high-impact analyses to deliver timely insights that drive business value.

"Trying to stay agile, stay flexible, not get too locked down to what you think your day is going to look like and just be willing to prioritize on the move."
(25:46)

12. Conclusion

Greg wraps up the episode by thanking Joe Shasteen for his valuable insights. He encourages listeners to follow RetailNext and the show’s resources for more in-depth information. The episode underscores the importance of agility, strategic promotions, and seamless omnichannel integration in navigating the modern retail landscape.

Notable Quotes:

• Joe Shasteen on Conversion Rates:
  "Black Friday is typically a pretty good week for conversion and it was really good to see it go up this time around, especially with traffic declines."
  (04:50)

• Joe Shasteen on Extended Promotions:
  "Allowing the customer more flexibility to shop when they want to... provides a better overall shopping experience."
  (16:41)

• Joe Shasteen on Omnichannel Integration:
  "Allowing those carts or those sorts of recommendations to be built out so that the consumer is able to make better choices and more efficient choices is ultimately going to help to drive that loyalty."
  (19:31)

• Joe Shasteen on Value-Conscious Strategies:
  "Having the different options... allows consumers to have a choice, but then they can make more value conscious choices if they want to."
  (22:05)

• Joe Shasteen on Staying Agile:
  "Trying to stay agile, stay flexible, not get too locked down to what you think your day is going to look like and just be willing to prioritize on the move."
  (25:46)

Conclusion:
This episode of The Agile Brand™ with Greg Kihlström provides a comprehensive analysis of Black Friday's evolving role in the holiday shopping season. With expert insights from Joe Shasteen, listeners gain a nuanced understanding of current retail trends, consumer behaviors, and strategic responses essential for navigating the dynamic marketplace. Whether you're a marketer, retailer, or consumer, the discussions offer valuable perspectives on maximizing success during the holiday season.