Lessons Learned from Black Friday 2021

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[00:00:21] Andrew: Hello and welcome to the E-Commerce Playbook podcast. My name is Andrew Ferris and I'm so glad you've joined me for another episode to talk about everything that is going on at 4 by 400. The lessons we're learning as we operate e-commerce brands, and as we see what's going on there and how to pass those on to you in real time with as much honesty as humanly possible.

Today is one of those episodes we're gonna follow up on Black Friday. Cyber Monday tell you how it went for our brands and not just how it went, but I'm gonna tell you exactly the lessons that I have learned. Kind off one big takeaway from each of our brands that I'm using to think about the future and how to maximize that moment.

I've done Black Friday a lot of times now, and every year there's more to learn so I'm gonna give those to you today. You can start planning your 2022 Black Friday. Now, that's a scary thought. All right, let's jump in.

The last episode that I recorded, and I apologize for a bit of a layoff actually it's just been, holiday insanity actually. And in the midst of that I'm a couple weeks behind here, but I wanted to follow up on my Black Friday episode because I gave that to you as a way to record in real time what my expectations were without having the possibility of skewing those relative to the results.

So that way they were recorded, they were on paper as it were before we knew what was gonna happen. So I'm gonna tell you what happened with each of those three brands that we really focused on, and then one thing I learned from each of them.

So the first of those is modern fuel. Modern fuel I told you that my expectation was $120,000 in revenue and across the Black Friday weekend. And I didn't give you spend numbers on all of these, but I'll tell you how it went relative to spend as well as relative to cash. $120,000 in revenue and really we had big hopes for modern fuel throughout the holiday season.

Pretty much ever since we released that bolt action pen and some other stuff, we really expected to see a really big bump for modern fuel. And that just has not come. Modern Fuel I think is in fact I was just looking recently at the longer tail of Modern Fuel, and I'm really pleased with where we've gotten it to in the time that we've moved it along it's come along at a really nice pace and its growth trajectory is really good. But still, it hasn't quite taken the giant leap that I had hoped it would take. 

And at times I think I have been a little influenced in my thinking the less recently. But I had been a little influenced in my thinking of comparing it too much to my experience with FC Goods because with FC Goods we saw these huge holiday bumps early on, and that just didn't happen with Modern Fuel.

And so far has not happened across the board. And I think there's probably a number of reasons for that, but above all, it just doesn't seem that modern fuel is necessarily a gift product. We have some data on this and certainly it's not a gift product like FC Goods was. But that I think means that at the kind of moments we would expect it to really take off its peaks those being sort of Father's Day as well as holiday. We just so far have not seen those giant peaks. We've seen some bump, of course, in performance, but not like that. 

So to not delay it anymore. We hope for 120,000, we only got 60. So that's a pretty big miss. Now There's a lot of stuff I could say about that. That was after a couple of big offer changes. We scrambled a couple times to see what we could do, but we just never were able to unlock something that moved a ton of volume. Now that was still obviously a meaningful bump relative to our daily revenue. It's not 60 grand across four days is nothing to sneeze at you know, for where that brand is. So it can do about a million bucks this year. So that's a little more than that actually, for sure more than that. But not too much more than that.

And therefore actually 60 grand across four days is pretty good relative to the total size of the brand. But our expectation, as I said, was 120. And so a couple things that my takeaways are here. 

The first is that we actually just haven't figured what that thing is in this brand yet that will really move volume. I wonder if we're a little bit stuck in modern fuel in terms of it being a little bit too nichey.

And this goes back to something we thought about when we were first looking at the brand and the thing that made me actually most skeptical upon acquisition. Not so skeptical that we didn't acquire it, but most skeptical at the time, which is what's the total addressable market for this product?

Like to go back to my FC goods example, a wallet made out of a baseball glove, just immediately says something to a certain kind of person and is a great gift, obviously, but Modern feels a little trickier to understand. It's a marketing challenge to really appreciate what it is. You know you have to kinda look under the hood a little bit. It's on the outside. It just looks like a pen. In fact, if I didn't tell you how much it cost you'd look at it and go don't know it's a nice pen. Maybe it's 15 bucks or something. 

And then if I tell you, oh, it's titanium, what you're looking at, or it's bronze or copper or whatever. And then if I start to explain to you more of what's going on here, it's, oh, it's got this warranty, it's got, if you open it up, you can see the mechanism, like all of these kinds of things. Then you start to get there, but it just does not present as obviously and as easily, as some other products do in terms of what the value is and therefore I think we have not yet figured out how to make it into a brand that has this mass appeal.

And what that represents to me is the marketing challenge of this. How do you take modern fuel and take it out of the realm of a subgroup, kind of niche group of people who love nice pens and pencils and really go broader with it? And for me, like this is a cop out as a lesson learned, right? Because I don't actually have a lesson learned yet, but it's where in the long run, the marketing wheels should be spinning on modern fuel. We have to figure out that problem. 

How do you continue to make this something that's more appealing, more a part of a broader lifestyle? What is going to really move volume here ultimately? We had hoped the bolt action pen would be part of that because we have some data to say that's the, the pen that moves the most or that, the sort of pen or pencil that moves the most for some similar brands in our space.

But it just hasn't gone quite there. So that's the question I would say is if I'm looking at this brand, what am I gonna do to take it to that next level? How are you gonna get it from a million to 20 million? How are you gonna make it? Know part of the way you do that is by maximizing these giant moments okay? Or these kinds of moments. What gets you to that stage 10 or 20 million in revenue?

And I think there's a lot of questions. Probably centering first on product and then second on how you present and market the product into whom you market it to. But developing out maybe some more elements , that are gonna make it a little more easily accessible for a broader audience while maintaining what's really special about the core of this brand, which it is.

A sub lesson learned here, lesson one A is, or one B I should say. Is just another reminder of the challenge of forecasting early stage businesses. If you are out there and you're thinking about, buying businesses this stage, just know it is just when you're trying to grow them this quickly before you've ever had a real Black Friday. And we had one last year, but we had so little inventory and we just were not seriously ready when we had acquired the brand too recently. We're not seriously able to think about having a huge Black Friday moment, so it was just really small. We didn't really have anything big to work off of from the past, and it just is so hard to forecast these early stage businesses and to have a sense of what's gonna happen before it happens.

We've missed low at times in the past, and we've missed high at times in the past, and so we've run outta inventory. We've missed low on multiple years in a row with FC Goods, where we were amazed at how much volume there was. So there we go. 

So that's modern fuel number two, Slick products. Our expectation for slick $180,000. Our actual $176,000 almost at exactly the spend that we had projected. in fact, if you note that we also had a pretty good Thursday we launched a sale on Thursday and did a sale extended on Tuesday. It moves the whole thing up to about 230 in revenue. And those are, that's a really solid number. So those were actually a little bigger than we had hoped as well. So the whole thing probably came in a little above where we had expected but basically in some ways right on our number. And that is totally not surprising at this stage of the game.

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[00:08:47] Andrew: It's funny, like it's the opposite of what I just said about modern fuel with Slick, we've been doing this in some way since 2018. So we've gone through Black Friday a lot of times. We know what works. It is what it is. And at this point, short of giving people 70% off some super blow the doors offer, that's gonna totally destroy the brand. We know what works.

And so my big takeaway here is do what works. Plan for what works and just go. Don't try to think you can massively blow away some number that you've not blown away before it might happen if you do something creative, but take the revenue, do what works.

In this case, we tech landing pages that we have run before for sales, before. Slick has a regular promotional cycle to the way that we run that brand. And we think that's part of just being native to that industry and that space. We're totally fine with it, and we have now figured out exactly what we believe works for those. 

Put your biggest offer at your highest AOV with your best discount at the top of the page, and then go down from there, descending from there.

So this one we said 50%. 50% off if you take this giant offer, offer number one. And I mean it was bottles and bottles of stuff to the point where I actually looked at it before we did it. And I thought, man, is anybody gonna take this offer? There are so many but how much wash product does somebody really need here?

And people did, people took the highest offer because it was the best deal. People just wanted the 50% discount and that's fine. That's fine take the best offer. We had some savings on shipping by doing it that way and we could give you a pretty good offer and feel pretty good about it.

And so that worked. And people over time will use it. And then on top of we had an offer where with 12 cans of shine ,our shine product and same thing 12 cans of this stuff. And that was our best discount on the Shine product. One of the most, one of the most popular products we have.

Our highest, it was like 40% off or something, and I don't remember the exact number now, but that was the other highest moving offer. And it's just that simple. Like put your best offers at the top of the page. Those will drive AOV, those will drive revenue volume. Go down from there.

Some people will take the lower offers down to 20% off on the bottom stuff. And there you go. For a lot of brands, I think that is the way .Whether it's your whole skew, whether it's everything on your site, whether it's certain SKUs. 

Like whatever it is, if you are running a Black Friday offer where you put your best offer with your highest discount and your highest AOV at the top of the page, advertise that as your number one offer and then drive people to there. It will raise your AOV, it will raise your revenue volume and it will convert at a really high number on those days and it will work. And it's that simple.

It worked at prospecting, it worked at remarketing, it worked at exactly the levels that we wanted to. It worked with past customers and it didn't drive some crazy amazing volume you know and maybe some year it will and we won't expect that and that'd be great. But that is a bankable thing and a really good outcome for slick.

So projecting that in the future shouldn't be too hard in that respect because you just know what works and you can do that again at other sales, make that Black Friday sale your biggest of the year just to maintain that so that people know now's the time to act. But that's the way to do it.

Number three, bamboo worth. Bamboo worth., This is the one where it went. I'm going from worst to best here. Bamboo worth we, our expectation was 180 k. And that was actually, that probably would've been at like a six to one MER. Maybe it was a seven. I think we had written down a seven to one MER.

So $25,000 and spent, I just did the math really fast. We spent about exactly $25,000 to get to $258,000 in revenue. So we really crushed our target here, to the tune of about $75,000. So that was really good .Kind of nets out at the end to be around our expectations across the board for the whole thing.

And again, this was another thing where it was an AOV driver sale, 10% off everything, 20% off over a hundred bucks, 30% off over 200 bucks. And that again, just worked. We put up a really big revenue day on Friday, just like $2,000 short of our biggest revenue day ever. And that's that. 

And so the simple reality here, we actually, the one thing we really missed on here was that we did not acquire new customers very well with this deal. We did some, we had some new customer acquisition, but it wasn't mostly through ads. It was mostly through people who were already on our email list who came and bought and maybe had seen our ads kinda a couple weeks before.

But it really wasn't the kind of, ad spend that like really generated tons and tons of new customer revenue that kind of deal. And that's what kept it from really blowing away our number. I have found this to be the case for Black Friday. For a lot of brands, it's just so competitive. In the auction for your Facebook ads in particular, that it's really, it can be very hard to drive real prospecting volume for some brands at Black Friday if you hit on that and you can, again, especially for products that are highly highly giftable highly seasonal where you can pay the CPM and it's okay. That can really work.

Skincare really isn't that giftable, and I think at some point for Bamboo worth, it would be wise to create a super giftable version of it to see if you could try to capitalize on some of that you know maybe there's some way in which you create a kid or whatever that's specifically for gifting and drive people to that.

But we haven't done that so far and I don't wanna sound too disappointed. We put up a really big number at a better ad spend than when we expected. And so that's really good.

I think the big takeaway for me here is that for a product that has people who are dedicated to it and love it and offer like this a discount like this, it just does move volume. And that's pretty bankable and we've seen this over and over again, that for Bamboo Earth customers, because they love the product, if you give them a discount on it, they are going to take that offer. If they are using this product. So you may cannibalize some future sales because of it. And that's the downside of this. But if you want to move volume fast, you can do it. And this, again, classic deal structure or offer structure here where ascending percentages off meant pushing people to the highest value. That really worked. 

Again, we drove a big AOV over the weekend relative to our usual, and it was just like up 25% or whatever 30%, something like that. It really made a big difference. I saw a lot of people take that $200 offer and the thing that I'll say that is the real takeaway from this for me, Is that because we know that will work for this brand to wield it wisely. The temptation now is gonna go to be, to go put yourself into a discount cycle all the time. And I think that's where this could get really dangerous for Bamboo Earth because you could actually really cut against your pricing power in the future. 

Instead, I think the way to think about this is I don't think Bamboo Worth needs to be the kind of brand that never discounts, but to be the kind of brand that makes a point of discounting really strategically. So for example, taking somebody who's bought a couple times, but they've bought X and never Y products, so to speak, and if they've bought X and they've never bought Y and you think they would like, Y? Give them Y at a discount. After they've bought a couple times already.

See if you can move them into that product. Or at first, don't give it to 'em a discount, just offer 'em at full price and see what happens. And if they still pass on it, then maybe come back around with a discount or take a group of customers. And Dave and I talked about doing this a while ago. Gift with purchase works really well with this brand. Take a group of customers who have been on your list for 30 days. They have not bought and offer only that group of customers a specific one day only gift with purchase offer where, you're really trying to move those customers into that very first purchase.

Now, again, at that point, you have to segment those customers for forever. Those are discount customers. They are not going to buy at full price in the future in most cases. So now you have to be ready to offer them other discounts in the future and make sure that you're doing the best you can to not let those discount offers leak into your main full price list.

But because we know that discounting works for this brand, that people that there is some ability to drive some value here, that you can do it. I still think the best way for Bamboo as much as possible to leverage discounts is to do that throughout the year. Use discounts really strategically, really segmented way. And then at Black Friday, every year, give people what they want, which is a big discount.

I just think it's perfectly reasonable for the sprint to do it and say, this is your one shop per year to take this offer. So that's that. By pushing for AOV we're also pushing people to try new products, not just stock up on the products they already like and I'm sure we'll do that analysis at some point to see how much that actually worked. Did we actually get new products into people's hands that they can maybe fall in love with as well and increase their value to us in the long term?

So that's it. I would say a solid Black Friday. All told when you wrap them all up all together. And there's the lessons. And next year, we'll, like I said, try and do it again.

Hey, thanks so much for listening to the E-Commerce Playbook podcast once again. I hope this episode was helpful to you. If you'd like to reach out, I would love to hear from you. DM me at Andrew J Ferris on Twitter. That is the number one best place to do it. I'm just telling you that it's the number one best place I will reply fastest in most cases.

If you like concepts of please rate and review. We always really appreciate that and share it with a friend as well. I hope your Black Friday, Cyber Monday went great. I hope your holiday is wrapping up great, and we will see you next time.