Midnight Madness Goes Online
The stores may be closed, but retailers including Dick’s Sporting Goods, Kohl’s and Sears are offering online-only discounts during overnight hours to keep consumers shopping after-hours.
According to a Chicago Tribune report, these midnight to dawn online sales specials are still a new tactic that are easy enough to try. They are also much less expensive than keeping a store open overnight.
Don Delzell, a partner at Retail Advantage and a member of the RetailWire BrainTrust, told the paper, “I’d like to say they’ve done some market research that finds there’s a specific shopper they’re targeting in the middle of the night, but I think it’s simply that the Internet is a 24/7 shopping channel. It only makes sense. In the long run, if you get more consumers then you previously had to buy your product, it boosts sales.”
If there is a targeted consumer it would probably be Natalie Bednarz or someone like her. The 24-year old from Boston is one of those consumers who frequently finds herself shopping online at night. “There’s nothing on TV,” she told the Trib. “No one is calling me. What else am I going to do?”
Chad White, director of retail insights at the Email Experience Council, said there are few retailers taking the overnight promotion approach online. Sears, he said, is one of the most active with the retailer running “night owl” sales once every other month.
“There’s clearly a market for folks who wait until the kids are asleep or night owls that can’t sleep,” said Chris Brathwaite, spokesperson for Sears Holdings.
Discussion Questions: Is there a significant market of consumers who for various reasons (waiting until kids are asleep, insomnia, etc.) are up late at night? Do you see a real opportunity for traditional retailers to drive incremental sales with overnight online promotions? Will these retailers capture some of the magic of home shopping networks with this approach?
For those of us who are regulars on the net “after hours” we don’t consider it “after hours” at all–just more productive time. I think for many, engaging in middle of the night shopping or surfing for information is because of the solitude and convenience rather than being driven by boredom or a promotional event (or insomnia). Of course, extra discounts or “first looks” from retailers to reward our existing behavior would be welcome!
Online merchants should be cautious, however, about obsessively driving NEW behavior toward online midnight madness sales at times when it may adversely affect families’ sleep cycles, or the next day’s work, school, or driving performance.
No question about it: we live in a high-productivity, high-output, high-expectations society and economy. Low unemployment, globalization, the Internet and other technologies (like mobile phones and laptops), longer commutes and increasing demands from employers, clients, and family/community responsibilities. If there’s one word that describes everyone, it’s “time-poor.” There’s also an epidemic of insomnia!
It all adds up to a 24/7/365 world. Retailers need to be where there customers are. Is there a significant market of consumers who for various reasons (waiting until kids are asleep, insomnia, etc.) are up late at night? You bet. Is there a real opportunity for traditional retailers to drive incremental sales with overnight online promotions? Absolutely. Will these retailers capture some of the magic of home shopping networks with this approach? That would be to their benefit: more shopping episodes, more spending, more repeat visits, more loyal, profitable customers.
It boils down to the fact that the American consumer loves to buy things on sale. It does not matter what time of day it is and if the sale is big enough, location does not matter either. If you put it on sale, they will come.
I used to have a company that ran 24 hour job hotlines for companies and over 20% of the people used to apply outside of regular business hours because this was a lot more convenient for them. 13% came between 10PM and 6AM.
I’m surprised there wasn’t more analysis of QVC and HSN nighttime activity in the Tribune article. It seems to me there is a direct corollary between the nighttime activities of the shopping networks and those of online merchants. In fact, QVC’s online store both mimics the cable show and offers web-only specials at various times of the day.
As for the question of whether traditional retailers can have success with overnight (or Sunday, if the physical store is closed) promotions, the quick answer is yes. These retailers have access to the technology that can help create a real presence online and make their sites as vibrant and engaging as the shopping networks. They have to devote the creative and technical resources to make it happen. This is not a small investment, but done right it can both build a business online and reinforce a retailer’s reputation as a merchant in the physical world.
Creating “events” in the online space is as fundamentally sound as doing it within the brick and mortar environment. Online retail has remained primarily transactional rather than experiential, and late night events generate elements of experiential merchandising. Anything which moves the dial toward experiential merchandising has the potential to increase key success metrics. There’s a great deal of research already to prove this point.
The key issue is not whether online events are a good idea, but rather, what is the right way to execute them? I agree with the comment about HSN and QVC. The products, which are featured on both TV and online during off hours, are chosen for maximum potential based on previous data. Studying which categories are featured and when would be a highly worthwhile activity for any online retailer seeking to tap into the off-hour market. However, comparing QVC and HSN to an online promotional event is somewhat misleading. Both QVC and HSN offer entertainment programming designed to capture attention and convert eyeballs. These are not primarily price driven “sale” opportunities, but rather targeted merchandising delivered with the “edutainment” needed to grab the consumer’s attention long enough to move her completely through the purchase process.
My comment in the Tribune was intended to suggest that targeted merchandising rather than promotional sale activity is a more effective way of utilizing the medium and meeting the needs of the consumer.
This sounds like pure genius to me. We all know how much shoppers love a bargain and if it’s a time-sensitive one that implies exclusivity or a deadline, all the better. And even better still, to take off from Don’s musing, I can see the sales being accompanied by video demonstrations/sales pitches. One step further still, how about a specialist sales website that links into all the different stores’ sales but each one with an amusing/entertaining/high powered sales pitch? I can feel a new business coming on if only I had the technical skills to implement it.
I think this type of “event” online shopping will continue to grow and it makes sense for the retailers to offer it on their website as well. This practice builds upon successful internet-only sites like Woot.com, which offers one product a day that goes on sale at exactly midnight central standard time. A product can sell out in just a matter of minutes.
Evening shopping events are smart moves because customers are at home and often online. The kids are in bed and who knows, maybe after a glass of wine or two they’re more likely to buy. But it’s not just evening events that are successful. Amazon and Staples both offer Friday online specials, J&R has weekend online specials, and Best Buy has Wednesday specials. Retailers who target stay at home moms could do weekday 10:00 a.m. sales, etc.
Online shopping really isn’t much different from the brick and mortar. It’s figuring out how do I get my customers to return more often and to buy more things? Obviously the advantage of doing event sales online is the ability to quickly queue up which products you’re going to highlight and which customers would be interested in them.
Now if they would only offer early-bird specials because there is no way I’m away for those midnight madness sales.
Hi-Low pricing stops people from shopping. It reduces trust. Midnight Madness specials are a great example of this. If shoppers are taught to wait for a great sale, the retailer will suffer. Isn’t it odd that supply chain economics frequently show that smoothing production and demand = lower costs and greater profitability, yet so many retailers create huge demand fluctuation via their promotional policies?
BargainOutfitters.com has had both noon and late night special promotions for several years now. These bargain specific shopping hours benefit both the retailer and the consumer. They are really fun to participate in, and the savings can be substantial.