Big Interview: Philips on the impact of Black Friday

It’s impossible to ignore the hype surrounding the forthcoming spending bonanza that is Black Friday and Cyber Monday.

Last year Brits splurged a record £5.8 billion over the four days, up 15% on last year, according to the Centre for Retail Research (CRR), while online spending on Black Friday rose 16% to £1.2 billion.

Blake Cahill, global head of digital and social marketing at Philips, says the phenomena took off in Europe over the last three years. Cahill joined the Dutch-based company in 2013, and leads the €24.5 billion-a-year corporation's international rebranding and expansion into new technologies and markets.

“It began in North America, and as an American it was something I always grew up with. But there's been a crossing of the pond of this retailing concept, which initially landed in the UK and a bit in France and then a few other markets.” That's partly thanks to retailers such as Walmart bringing it to our shores via Asda.

However, a number of retailers have begun slashing prices early this year, leading some experts to predict spending over the four days may fall flat. Other factors such as the recent interest rate hike, a weak pound affecting the price of imports and uncertainty of over Brexit, could also depress sales. Cahill says he can’t comment on the macro trends, but believes the success of the period could act as an economic bellwether.

Planning ahead

Philips starts planning as far back as the summer. “It's not just a marketing action, you have to have the supply chain ready and the customer care is in place. We have 15 countries in Western Europe participating this year, double the number the previous year. And we are leveraging our global planning and assets across markets from Poland to the UK, Spain and France."

The process is run like a military operation, with the firm deciding on a global merchandising strategy and what will work for different markets; along with planning email marketing, chat and social posts, banners, and internal and paid for campaigns. All of that then goes live at the beginning of October. “As we get closer to the date, more things get turned on and utilised from the global tool kit we have developed and given to markets to leverage."

Unlike the States, some retailers in the UK opt out from participating in the Black Friday/Cyber Monday frenzy. For example last year Selfridges – along with others – officially stayed clear of the period.

"Various retailers have different adoption on this concept, so we saw [an opportunity] to do more. In North America of course all the big retailers are massively invested."

The company simultaneously works with partners and runs direct promotions to customers, via its database of registered people. “We have plans with them as well as our own plans for people we have a direct relationship with.”

Direct lines

From an operational perspective, he says the business has a "war room" set up weeks in advance to make sure it has server capacity to cope with the voracity of emails going out and orders being processed.

“We run some tests to make sure we don’t have any failures… but there’s always a broken link somewhere and some fast firefighting. That is why we set up the war room, where we are watching traffic and shopping carts those days. All big retailers do that, and it’s really impressive to see the operations that are built to monitor peak traffic and customer transactions.”

He can’t provide a breakdown for how big its direct online business is, although needless to say its main sales channel is via partners.

Products he expects to do well include its low-fat air fryer, and OneBlade, which have been very popular. "Obviously if Amazon decides to promote something on Prime during that period, it will be a runaway success,” he adds.

“Because we have doubled the number of participating markets, it will be interesting to see if results are different in say Poland than in France. We'll need to look at the market perspective to see what customers are really interested in. I think this is a learning year for us, and it will be interesting to see if there are big differences [across markets].”

Notably, sales for China’s equivalent Double 11, which ran earlier this month, are expected to once again break a world record with $20 billion splashed in just 24 hours. But whether Brits are feeling similarly inclined to jump on the hype and set a UK record this year remains to be seen.