Wednesday 22nd Nov 2017
Black Friday is the day my credit card gets a pounding. Simple. Jane, my wife, assures me shopping on this day will save us hundreds of pounds, so we join the masses in an event which has become imprinted on our minds as a key date in the calendar year.
But where did it come from and more importantly should we view it as our friend or foe?
Black Friday is an informal name for the day following Thanksgiving Day in the United States (the 4th Thursday of November) which has been regarded as the beginning of the country’s Christmas shopping season since 1952.
There’s a funny quote circulating the internet, you may have seen it, which says
‘only in America people trample each other for sales
exactly one day after being thankful for what they already have!’
And it’s this quote that got me thinking about whether it’s our friend or foe.
Interestingly, in the UK, the term Black Friday originated within the Police and NHS to refer to the Friday before Christmas. It is the day when emergency services activate contingency plans to cope with the increase in workload due to many people going out drinking on the last Friday before Christmas.
The emergency services may now however link the term to the infamous shopping day simply due to the crowd control issues, assaults, threatening customers and traffic delays they have to deal with. It’s the retail shopping version of the hunger games!
It is only in the past few years it has been adopted as a mainstream term in the UK. In 2013 Asda (a subsidiary of the American firm Walmart) announced its “Walmart’s Black Friday by ASDA” campaign promoting the first concept of a retail “Black Friday” in the UK. In 2014 – 2015, more UK-based retailers joined in.
In 2016, total spend on online retail sites on Black Friday 2016 was £1.23bn, marking a +12.2% increase on the £1.1bn spent on the same day in 2015.
It is huge, more than huge…. it’s a juggernaut rolling into a town near you.
What can we take from this experience other than clamping our wallets shut?
Is it an opportunity or is it a threat? Friend or foe?
Let me share my take on this, my 12 Black Friday findings, and then you can decide….
Deals, deals and more deals. I can’t argue with that. With savings of 50% off, 75% off, 90% off it certainly does seem the time to buy. But the key is to create a budget and stick to it!
Researching offers, comparing prices, sifting through the deals is a skill you perfect as you search for the make and model of TV that you actually want, not the one they are headlining. Planning your approach is equally as important – are you going to hit the shops at the crack of dawn or convert your amazon wish list into an order with one swipe – the devil is in the detail.
And the result. Christmas shopping complete exactly one month before Christmas. Result.
I often talk about winning mentality, and being bombarded with ‘countdown to Black Friday’ emails one or two weeks before the event and painstakingly researching the offers available to find the best deal, in my mind is a winning mentality right there in action. Not only that, your building your personal resilience when you make the connection that the make and model of TV you want is not actually in the sale and you have to pick yourself up and recover quickly, to look for the next bargain.
A definite no no. It’s simple, create a budget and stick to it.
Buyers’ remorse is the sense of regret after having made a purchase. It’s linked to a feeling of guilt over buying things and usually boils down to two factors: regret over spending money or buying something you shouldn’t have. Avoid this feeling by sticking to your shopping list.
In the UK, consumers have the right to a full refund for faulty goods. Many retailers allow customers to return goods within a specified period (typically two weeks to two months) for a full refund or an exchange, even if there is no fault with the product. Exceptions usually apply for goods sold as damaged or to clear, so be sure you know the returns policy for sales items. Just in case you change your mind.
Use it as an opportunity to clear out old stock which you would have to mark down or dispose of it someway. Why not do it on the biggest sales day of the year?
The awareness around Black Friday should naturally make your existing customers keen to understand what deals you’re offering so make sure you tell them! If you don’t, no one else will. Equally, new prospects on the hunt for a deal could search for you and like what they find. Be mindful though of their loyalty as they may just be a bargain hunter, not in it for the long term. Remember Black Friday is a window of opportunity to grow your business, but not your only opportunity.
You have to be ready to scale up your business. You must have the capacity to serve your customers whether that’s the bandwidth of your website & servers or your delivery logistics or your customer service. If any one of these things go wrong it dilutes the experience for the customer and will certainly give you sleepless nights. Be prepared for the increase in volume and have contingency plans in place.
If you discount heavily to attract sales make sure you ‘do the numbers’. If you don’t your margins could suffer as a result, profit could be down and you end up in a worse position than before you started. In order to survive, a business needs to make a profit. Be clear what products you intend to discount, at what price and what margin this gives you. Deduct your variable costs and your apportioned fixed costs and you have your profit (or not). A word of warning, discounting popular or high end items might cheapen the products from the customer’s perspective so consider carefully the products to be included.
During Black Friday, consumers are in a buying mindset, there enthusiasm to buy is at its peak. Whilst this is clearly good for the ‘day’ it might discourage them from spending money in the weeks or days leading up to the big event. Ensure you factor this into your planning as you don’t want the unexpected surprise of seeing your run rate fall off just as you’re finalising your discount strategies.
Large retailers, both on & offline, will offer loss leaders supported by significant promotional budgets. It may be difficult to be heard among the noise. Hone your message, be clear on your price points and go and promote your offer to your existing customers at the very least. One in three existing customers do not buy your complete range of products and services simply because they do not know you offer them! Now is the time to tell them.
So, what do you think? Opportunity or threat? Friend or Foe?
I think it’s simply this…moderation.
Moderation: not to spend more than you can afford or discount more than you have.
Moderation: only buy what you need or offer only what you can.
Moderation: It’s one sales day out of many in a calendar year.
Yes, maximise the opportunity but not at the expense of financial strain. In fact, Cyber Monday is just around the corner……where it all starts again!
Let me know what you think; friend or foe? Leave your comments below.