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How Shopping Technology Forces Retailers to Alter Holiday Game Plans

Smartphone apps, browser extensions and other digital tools are forcing retailers to rethink their approach to holiday sales and selling in general.
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Smartphone apps, browser extensions and other digital tools that help shoppers find the best deals are forcing retailers to rethink their approach to Black Friday holiday bargains and selling in general.

The most obvious change wrought by the flood of new consumer-oriented technology is the expansion of Black Friday from a one-day event to a year-round hunt for bargains.

Thanks to online price tracking tools like camelcamelcamel, consumers can see how prices fluctuate over time and get alerts when an item is on sale. That means no deal-hunting required, and you certainly don’t need to camp out in front of Best Buy on Thanksgiving and risk being trampled by other shoppers in the hopes of getting a great deal on an HD TV.

Retailers are responding to the shift by increasing the number of online “events” and spreading special deal days around the calendar.

For example, online retail giant Amazon launched “Prime Day” this year, promoting it as “Black Friday in July.” That prompted other retailers to offer similar promotions. And last week, Wal-Mart released “Pre-Black Friday Online Specials” and Amazon rolled out the first in its series of Black Friday deals.

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Black Friday isn’t in danger of becoming extinct anytime soon. It has been the busiest shopping day of the year for more than a decade and will again be the linchpin of a holiday shopping season that is expected to see a 3.7 percent increase in sales this year, according to the National Retail Federation.

So while it may not be the door-busting, exclusive day it used to be, it still brings in the cash.

But experts say the days of the one-day extravaganza it represented are gone for good.

“The days of suspense from waiting for the ad to show up in the newspaper that finally shows the rock bottom deals are very much over,” said George Gracin, a sales and retail expert and marketing associate at neoRhino IT Solutions. “The companies have now started giving out Black Friday-level deals and sales way before the actual date, in hopes of securing the sale early and not losing it due to frustrations and in-stock problems.”

Analysts have called this the “graying” of Black Friday. Shopper traffic---both online and in-store-- over last year’s Thanksgiving weekend was down 5.2 percent, according to the National Retail Foundation. This was partially due to earlier holiday sales, but also a reflection of shoppers’ ability to shop online 24/7, a trend that encourages procrastination in hopes of landing an even-better last-minute deal.

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Online shopping also has served to narrow the distinction between Black Friday and Cyber Monday. Retailers for the most part now offer the same deals online as they do in their stores. Plus, most large retailers like Best Buy and Target are willing to match lower online prices. All customers have to do is pull out their smartphones, see if Amazon or some other retailer has a better deal, then ask a cashier for the lower price. With technology making it easier than ever to compare prices and find the best deal, the exclusivity that defined both shopping days has diminished.

Companies still embrace the terms “Cyber Monday” and “Black Friday,” but that’s mainly because customers still respond well to the idea that they can get exclusive discounts for a limited time.

Content optimization company Persado analyzed over 400 email subject lines sent by retailers last year on Nov. 27-28. The data showed that the “average open rate” of an email with Black Friday in the subject line was about 13 percent higher than one that didn’t use the term.

While technology has given consumers the upper hand in the shopping experience, retailers are using it to their advantage, too. Online advertising gives businesses an ability to target likely buyers in ways that they could only dream of in the days before data mining.

And analysts say they are seeing more “permission marketing” offers this year from retailers aimed at cementing customer loyalty.

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The term, coined in the late ‘90s by entrepreneur Seth Godin, refers to the practice of asking consumers for permission to market to them, often in exchange for a special deal, such as Amazon’s Prime Program, or special notice of price changes or product availability, said Kim Garretson, a digital marketing analyst.

“For instance, when a new discount is added, signing up to virtually 'stand in line' for limited quantities, when out of stock products are available again, when new reviews are posted, and more,” she said.

Opt-in emails are the most common example; in exchange for your email address, a retailer may give you a 20-percent-off coupon in exchange for your permission to target you with advertising.

This year, Garretson said, many retailers are taking permission marketing up a notch.

“Some leading retailers, leading up to Black Friday, are offering a new 'button' next to their add-to-cart button that can say something like: Get Alerts,” said Garretson. “Clicking this, a pop-up can let viewers leave their email address or mobile phone number to give permission and set the criteria for updating on products of interest as they shop this holiday. Only a few large retailers are offering this in 2015, but others are planning to launch it next year, so Black Friday in 2016 should be very permission focused.”