By Andre Malinowski, head of international business, at Payment Service Provider Computop
Only five years agoif I mentioned Black Friday to someone in the UK, they would probably think I was confused about some big financial market crash from the 80s. However, year on year, awareness of Black Friday in the UK has been steadily increasing. Multi-region online retailers like Amazon started a trend, promoting ‘Black Friday’ deals and driving our traditional Christmas shopping habits to change and mirror those followed in the US.
This year, Black Friday falls on 25th November. It doesn’t seem to matter that the British do not celebrate Thanksgiving. Over recent years, this weekend period signals the start of the UK’s Christmas shopping frenzy as consumers race to get the best bargains on their lists.
According to data from IMRG and Experian, 2015’s Thanksgiving period saw UK consumers spend 1.1 billion pounds on Black Friday, up 36% from the previous year. Over that whole weekend period, culminating in what is now often referred to as ‘Cyber Monday’, UK consumers spent £3.3 billion.
Whilst it caught many UK retailers unawares in the beginning, they have now been catching-up,becoming better prepared partly thanks to an improvement in the stability of ecommerce sites and better online performance. But it is still too early in its development in the UK to have solidified into a predictable annual event as seen in the US. So whilst in the last couple of years traditional British high street retailers like John Lewis, Curry’s and Argos have geared up both in store and online to capitalise on this shopping trend, everyone is still learning as they go and there are often repeated mistakes that can be learnt from.
For example, having been stung the year before, in 2015 many UK retailers promoted Black Friday deals early to get in first and spread the surge in traffic to their websites over a longer period. This gave them more breathing space for infrastructure and helped with logistics and fulfilment. Although, shoppers still experienced problems with demand. Websites ground to a halt, often crashing and being unavailable for long periods of time. According to Statasia, the statistics portal, on Black Friday 2015 72% of all online shopping carts were abandoned before completing a transaction. That’s a significant amount of revenue lost.
So, what does this years’ Black Friday weekend hold in store for us all? Will Brexit mean that Christmas shopping budgets are cut, or will it drive consumers to try and make the most of the discounted shopping weekend? Will it mean that less is bought from overseas merchants and more purchased domestically due to current drop in currency exchange rates? No-one quite knows yet. However, what is clear is that there are some key steps a retailer can take to make sure they are prepared to maximise revenue opportunities during this period:
- Have a good cart abandonment campaign in place – Ensure you can follow up on abandoned carts fast. It might not be that they’ve purchased elsewhere, they might have been having access issues and given up out of sheer frustration. A timely email with a promotion could make the difference between a sale or no sale.
- Optimise your mobile site – Almost all sales will be influenced in some way by shopping related mobile searches, often from within store. Make sure your mobile site is optimised for all devices and will stand up to demand from impatient shoppers.
- Ensure your desktop site/s are robust – Whilst it’s true many sales involved a mobile search, desktop sales are still the higher value transaction. Last year, average order values on desktops were 16.6% higher than mobile according to IBM. Use a high capacity gateway than can handle peak times.
- Secure all channels – Traffic will be high, but don’t let that be an excuse to let your guard down. Ensure your fraud detection and response plan is prepared to cope during times of extreme traffic. Make sure fraud detection is across all channels.
- Plan for the worst case –Make sure you have a reliable backup/redundancy solution in place so that you keep trading come what may. Lost sales during this weekend could make or break a business for the year. That’s a sobering thought.
- Ensure the supply chain is ready – Stress test the logistics in the supply chain for a huge increase in shopping volume and ensure processes for handling backlogs are in place. Also, before you let go a sigh of relief that the crazy busy weekend is over, don’t. Not just yet anyway, remember to prepare for a surge in returns that will need to be processed too
Black Friday 2016 is approaching whether you are prepared or not. Even retailers with no intention of joining in the discounting will need to be prepared for an increase in traffic on their eCommerce site and an uplift in sales as consumers will have the shopping bug. Make sure that Black Friday doesn’t become a dark period for customer experience and use it as an opportunity to help grow your customer base and loyalty.
Nvidia forecasts sales above estimates as gaming chip sales surge
By Chavi Mehta and Stephen Nellis
(Reuters) – Nvidia Corp forecast better-than-expected fiscal first-quarter revenue on Wednesday, expecting strong demand for its graphics chips used in gaming PCs and artificial intelligence chips for data centers.
As people wait for COVID-19 vaccine rollouts around the world, stay-at-home orders have helped sustain the demand for chips used in personal computers, gaming devices and data center infrastructure that enables remote working.
The Santa Clara, California-based company’s gaming chips have also regained popularity for mining cryptocurrency, a trend Nvidia is trying to counter by throttling its gaming chips ability to mine for currencies and instead offering specialty chips for mining.
While Nvidia was long known for its gaming graphic chips, its aggressive push into artificial intelligence chips that handle tasks such as speech and image recognition in data centers has helped it become the most valuable semiconductor maker by market capitalization.
It has eclipsed rivals Intel Corp and Advanced Micro Devices.
Shares were up 3% at $597.50 in extended trading after the results.
On a conference call with investors, Chief Financial Officer Colette Kress said that a global chip crunch made it hard to keep the company’s flagship gaming chips introduced last fall in stock and that the chips would likely remain in tight supply through the fiscal first quarter.
The company also said it will make a change to its gaming chips starting with the RTX-3060s to make them less efficient for mining cryptocurrency. The company said it will instead introduce mining-specific chips.
“We would like GeForce GPUs (graphics processing units) to end up with gamers,” Kress said.
Kress said analysts have estimated that cryptocurrency mining contributed between $100 million and $300 million to Nvidia’s sales in the fiscal fourth quarter. The company expects the new mining chips to generate about $50 million revenue in its fiscal first quarter, Kress added.
The company expects first-quarter revenue of $5.30 billion, plus or minus 2%, above analysts’ average estimate of $4.51 billion.
Revenue in the quarter ended on Jan. 31 rose to $5 billion from $3.11 billion a year earlier. Analysts on average were expecting $4.82 billion, according to IBES data from Refinitiv.
Revenue in the company’s gaming segment was $2.5 billion, above analyst estimates of $2.36 billion, according to data from FactSet. Data center revenue was $1.9 billion, above estimates of $1.84 billion according to FactSet data.
(Reporting by Chavi Mehta in Bengaluru and Stephen Nellis in San Francisco; Editing by Maju Samuel and Will Dunham)
Running boom to help Puma recover after slow start
By Emma Thomasson
BERLIN (Reuters) – German sportswear company Puma expects the financial impact from coronavirus lockdowns to last well into the second quarter, but believes global growth in running should help to support a strong improvement after that.
“We clearly see a running boom in the whole world,” Chief Executive Bjorn Gulden told journalists, noting that yoga and other outdoor activities are also doing well. He expects the healthy living trend to continue even after the pandemic.
Gulden said his optimism is underlined by the fact that orders for 2021 are up almost 30% compared to a year ago, with bookings for running products particularly high.
However, there is still uncertainty about when lockdowns in Europe will end, with about half of the stores selling its products currently closed in its home region.
For the full year, Puma expects at least a moderate increase in sales in constant currency, with an upside potential, and a significant improvement for both its operating and net profit compared with 2020.
Shares in Puma were down 2.9% at 1100 GMT.
“The wording on outlook looks softer than we had anticipated, even by Puma’s cautious standards,” said Jefferies analyst James Grzinic.
Gulden noted that a shortage of shipping containers bringing products made in Asia would impact margins, with freight rates likely to double in the next 12 months.
Puma will put a stronger focus on the women’s market in future, Gulden said, creating shoes better modelled to female feet for running and soccer and capitalising on partnerships with celebrities like singer Dua Lipa and model Cara Delevingne.
Gulden admitted Puma had been slow in creating its own app, but it plans to launch one towards the end of the year, further supporting online sales, which grew by 63% in 2020.
Rival Nike in December raised its full-year sales forecast after demand for outdoor sportswear drove an 84% surge in online sales.
Gulden said he is hopeful that the Olympics will go ahead in Japan and the European soccer championship will also take place after both were postponed from 2020.
($1 = 0.8226 euros)
(Reporting by Emma Thomasson; Editing by Mark Potter and Keith Weir)
ExxonMobil to sell some UK, North Sea assets to HitecVision for over $1 billion
(Reuters) – Exxon Mobil Corp said on Wednesday it would sell its non-operating interest in its UK and North Sea exploration and production assets to private-equity fund HitecVision for more than $1 billion.
Exxon has been looking to sell its oil and gas assets since late 2019, seeking to free up cash to focus on a handful of mega-projects.
The deal includes ownership interests in 14 producing fields operated primarily by Shell as well as interests in the associated infrastructure. Exxon could also receive about $300 million in contingent payments based on a potential for increase in commodity prices.
Exxon’s share of production from these fields was about 38,000 barrels of oil equivalent per day in 2019, the company said.
Exxon said it would retain its non-operated share in upstream assets in the southern part of the North Sea as well as its interest in the Shell Esso gas and liquids (SEGAL) infrastructure, which supplies ethane to the company’s Fife ethylene plant.
HitecVision, in partnership with Eni, had bought Exxon’s Norwegian North Sea assets for $4.5 billion in 2019.
Initially, Exxon hoped to raise more than $2 billion from the sale, which was planned for late 2019. In June 2020 sources told Reuters that the portfolio was more likely to fetch $1 to $1.5 billion given the oil price weakness last year.
(Reporting by Arathy S Nair in Bengaluru; Editing by Anil D’Silva)
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