Been thinking about BFCM loads. It has all the feeling of being the most challenged one in some time. Yet, we see Adobe predicting $1TN, yes Elon’s wealth, in spending this peak season. Consumer confidence on the other hand is somewhere around its’s ankles. This morning I watched a Twitter video (forgive me) from a David Strickland (I cannot find him to give him the credit). He said, “The math ain’t mathing for ecomm”. His thesis, in 2019, a product costing $100 produced resulted in approx $36.84 in contribution margin. Today that is $1.71 before salaries. Or 95.4% less. This is not a clickbait post nor was it for the video. He justifies this, measures it and questions the role of service providers in this new economic scenario.
2 weeks ago I mentioned that the Irish retailer makes approx 2.50 on every 100, so it tracks. Free cash flow is tight and we are relying on peak trading to get us there. We have added uncertainty - Shopify apps being hacked, Revolut down this morning, banks down, supermarket checkouts down. Google cloud is a core infrastructure element and has been so reliable for so long. The fact this particular outage is hitting consumers means it is in mainstream news services too. Fear and uncertainty, 1 month out from Black Friday.
Change is the only constant. Your BFCM plans for many will be nailed on, but I am inclined to rip it up - not totally. Hear me out. Meta CACs are soaring - CVR is falling off a cliff, not an uncommon BFCM problem, but stresses the Twitterhood something wild.
Brand/Retailer side - make your promo cycle easy. Use your existing customer book to give you control. Merchandise your ass off every day. Respond to weather, Trending topics and deliver messages to beat the daily number. Plans cannot do this. The real certainty around BFCM is that we trained consumers to spread their spend during this time. Your job is day trading. Not monthly or weekly planning. If you are not a high volume seller you need to capitalise on the moment. If you are in the volume game, you need better reasons for me to part with my money, not much more to be honest. Turn inventory into cash.
SaaS provider, I said this before. Upgrade your customers to the top tier today and run it until peak ends. Let your top product do your talking. Demonstrate value and dont talk about it - dont let your volume limits be your volume limits. Your job is hard enough - get your size 14’s out of your own way.
I think the plan will stress you. Work on the basis of group think and accepting things change. Have your trade meeting in the morning, early and be focused. Don’t be surprised and don’t be dismissive. Example, if you are monzo or a Revolut competitor now you should be reaching for the folder named - Eureka - that moment that could happen but probably wont but we go on the offensive. It happens in governments when snap elections are called, banners and manfiestos appear .
Arise BFCM, I dub thee the year of contingency above all.