You may or may not know, but Black Friday will happen… Hopefully, you’ve heard about it, but I thought I’d share a bit of background in case you’d not.
Black Friday came to the UK from USA and is the Friday following Thanksgiving Day. Since the early 2000s it’s been the day that kick-started the Christmas shopping season with mega discounts online and in store. Since 2005 it has been the busiest shopping day of the year.
Also in the USA, and since 2010, Small Business Saturday (created by American Express) has operated the day after Black Friday. The purpose was to encourage shoppers to visit small, local shops. Unfortunately, in the UK Small Business Saturday is a full week later, this year on the 5th December, so sadly the opportunity to tie-in with Black Friday is less applicable to UK independents.
For the past 10 years, some UK retailers have attempted Black Friday activities, but it really only gained traction in 2013. 2014 was much bigger, garnering much media attention – you’ll probably remember some issues surrounding it – both operationally (customers fighting over discounted items in stores) and commercially (negative impact on margins, pull-forward of sales usually expected in December etc). Some retailers have said they dislike the phenomenon that is Black Friday, but, it seems that it is here to stay.
Given this background, I wanted to share some of the predictions around Black Friday 2015. Ecommerce consultancy, Salmon, have forecast it will be the UKs first ever £1billion+ shopping day. They’ve produced a report that explains their reasoning and includes recommendations for retailers – see https://www.salmon.com/en/black-friday/ (note, this is predominantly aimed at larger businesses).
If their predictions prove to be true then Black Friday 2015 will be the peak sales day in the whole year, exceeding cyber Monday and Boxing Day. However, I’m not sure this is good news.
My concerns are echoed by a number of retailers and other commentators – the fact is retailers are “training” customers to expect pre-Christmas discounts and are damaging the opportunity to maximise full price sales. Christmas used to be the critical period for retailers to achieve their annual sales targets. If customers are now holding out for bargains, expecting 50-70% off, and are unwilling to accept full price, then retailers have created themselves a bit of a problem!
So, the question is, what can Independent retailers do about this situation? It would seem it’s all rather gloomy! However, that need not be the case – as they say, where there’s a will there’s a way.
Here are my top tips for taking full advantage of Black Friday:
- Identify obsolete / end of line items that you can put into a big “clearance” event on Black Friday – use the frenzied customer demand to clear items and get cash tied up in aged stock back into your business.
- Speak to suppliers – they might have stock they are sitting on that they want to shift – if that’s the case perhaps they’ll collaborate with you to part-fund the deep discounting expected on Black Friday.
- Use all channels – Amazon and Ebay (and other market places) get HUGE amounts of traffic, all looking for a bargain! Leverage these outlets to maximise sell-through and to find new customers.
- Capture details of all customers shopping on Black Friday – ensure you can remarket to them.
- Run less deep-cut promotions throughout the period to Christmas in order to justify re-connecting with customers, to keep them spending with you, but avoiding haemorrhaging too much margin.
It’s not easy as a smaller business to keep up with the activities of the big players as they’ve got far deeper pockets and far greater leverage with their supplier base; but there are things you can do to avoid missing out.
Fingers crossed Black Friday doesn’t create a spending vacuum this December, and here’s hoping the independent retailers raise to the challenge to grab their share of the forecast £1billion sales!
“Sales”: Alan Cleaver, https://flic.kr/p/5MnsCd