How to OPTIMIZE YOUR BLACK FRIDAY STRATEGY with MMM
Are you wondering if you’re making the most out of this shopping event? Learn all about the hidden risks, the true potential and how to master the Black Friday hype through Marketing Mix Modeling.
November is here, and with it, the rush of Black Friday planning. But are you confident that your campaigns are truly maximizing returns, or are they simply blending into the noise of a fiercely competitive market? As the competition intensifies during Black Friday, many marketers question the true impact of their campaigns.
Critical questions to consider:
- Does Black Friday truly increase sales, or are consumers merely shifting their purchases?
- Are the increased sales during Black Friday worth the high costs of competing in such a crowded market?
- Did you sell more during Black Week because of the event itself, or were your campaigns the real drivers?
- Did previous campaigns impact Black Friday sales?
The hidden truth behind Black Friday sales
Example of the e-commerce sector
Let’s look at one of our e-commerce clients as an example. Our baseline model identified behavioral patterns and allowed for a better assessment of the effectiveness of its Black Friday promotions.
What did we discover? Our analysis, visualized in the diagram, showed that while the short-term sales spike was significant, a large portion of these purchases was simply a shift in demand: consumers were moving purchases they would have made later into the discount period. This shift led to a notable decline in baseline sales in the months following the promotion.
This so-called stockpiling – where consumers delay their purchases in anticipation of discounts and buy more during discount periods to stock up for the future – caused a long-term dip in baseline sales and might even risk eroding its brand’s value.
The Black Friday Effect
Black Friday has become a staple of retail in recent years. However, our studies show that baseline effects have significantly increased due to learning and stockpiling behaviors. In 2017, the baseline effect during Black Week was around 71%, while by 2020, it had already risen to 91% (see diagram, left).
Chances: Increase your ROI with Marketing Mix Modeling
The extent of these risks mentioned above can vary significantly depending on the industry. What might lead to stockpiling in one sector could drive sustainable growth in another supported by a well-structured marketing strategy. This is where Marketing Mix Modeling (MMM) becomes crucial.
By analyzing past data, MMM allows you to adapt your strategy. Case studies show that companies optimizing their media spend through MMM saw a significant improvement in ROI by reallocating budget from less effective to more impactful strategies during Black Friday, ensuring that you’re not only driving sales during Black Friday but also maintaining long-term growth and minimizing post-event dips.
Drive sustained growth year-round
Our advanced Marketing Mix Modeling goes beyond simple results – it enables you to separate and compare campaigns across multiple years, even retrospectively. This means you can measure the long-term effects of Black Friday promotions and gain valuable insights into whether sales spikes were purely event-driven or boosted by additional campaigns.
Let’s ensure your next Black Friday strategy maximizes returns, boosts incremental sales, and drives sustained growth year-round:
- Quantify whether Black Friday sales are incremental or simply a shift from future sales.
- Analyze stockpiling behavior, MMM reveals whether promotions lead to long-term decreases in baseline sales.
- Separate the event’s natural sales spike from the effects of additional marketing efforts, helping optimize campaign spend.
- Evaluate if the benefits outweigh the expenses.
- Track post-event sales patterns to identify whether the promotions cannibalize future revenue.
- Identify the optimal discount level for Black Friday.
Contact us
Looking to master the Black Friday hype? Esther is here to discuss how to create a balanced, efficient, and impactful Black Friday strategy:
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