Black Friday has become a key fixture in many people’s shopping calendars and marks the start of the festive spending spree – or so retailers hope – but is it overrated for retail businesses?
Retail businesses need to keep Black Friday in perspective as there are undeniable positives to be gained from taking part in this event if a balanced approach is taken, and the long-term value of a loyal customer is considered – after all, you don’t want to place sales ahead of brand credibility.
What Is Black Friday?
Black Friday started in the US and was introduced to the UK by Amazon in 2010. It takes place on the Friday after Thanksgiving and is seen by many as the start of the Christmas shopping season.
It took 4 years for other retailers to catch on and decide to take part and the first significant event in the UK in 2014 saw crowd crushes, stock damage, people injuring themselves and police being called, as people eagerly tried to snap up bargains in store. Online, websites crashed under the weight of demand.
While there is no doubt retailers benefit from taking part in the Black Friday event and sales jump significantly for some, there is a risk of brand damage for short-term gains.
Pros Of Black Friday
Black Friday is attractive to many retail businesses that want to boost sales and kickstart the holiday season with a spike in traffic.
Most choose to participate for the following reasons:
- Boost sales
- Shift old stock
- Build customer loyalty
- Win new customers
- Increase website traffic
Cons Of Black Friday
Retail businesses should focus on the lifetime value of a customer for the whole year rather than just a day, and there can be negatives to participating in Black Friday.
Cons include:
- Pressure to discount even when unaffordable
- Reduced profits
- Customers get used to discounted prices and won’t pay RRP
- Buyer’s remorse leads to lots of returns
- Reduced sales in the build-up to Black Friday
- Customers care about sustainability and may lose trust in your brand
How to Make The Most Of Black Friday
It’s important to plan well for Black Friday as competition is fierce and you don’t want to get sucked into the game of who can slash prices the most.
Although discounts drive sales, more sales of discounted items don’t necessarily mean more profit. Plus, heavy discounting can be harmful to your brand as customers learn to wait for the discounts rather than make purchases naturally throughout the year.
Add to this the fact customers are becoming increasingly concerned about businesses’ values and sustainability, and much thought needs to go into your business’s Black Friday approach – is it ethical to pile high and sell low and will it appeal or repel your target audience?
The good news is there are steps you can take that let you participate in Black Friday in a way that is right for your business and brand.
Long-term Marketing
Concentrate on your year-long marketing and not just on your Black Friday plans. Aim to keep your customers engaged throughout the year with regular articles, loyalty incentives, and plenty of reasons to shop all year.
Limitations
Think about what you want to achieve from Black Friday – and this may be to shift certain products or lines of stock rather than have a big clear-out. It might be a good idea for your company to offer discounts on a limited range of products so you can participate in a controlled way.
Structure
By planning, you can make sure your back-end systems can cope with the increase in demand and your stores have the staff available to ensure customers have a good purchase experience.
Mark Joseph is the founder of Vouch Global. After a successful 15-year career within other media agencies, including Steak and PHD, working with some of the world’s largest brands, startups and SME’s, Mark launched Vouch Global in 2018. A creative performance agency dedicated to helping clients gain real influence through insight and strategy-driven content creation.
Mark is a Media Week & Daily Mail 30 Under 30. He has also sat on the Internet Advertising Bureau council, advising both brands and agencies on new regulation within the U.K advertising industry.
