Thursday 5th Dec 2019
Unless you’ve had your head in the sand, you couldn’t have ignored the huge juggernaut that was Black Friday. But was it your friend or foe? Whether you’re a consumer or business owner read my 12 findings and decide for yourself.
Over the past week, you may have read this funny quote circulating the internet ‘only in America people trample each other for sales, precisely one day after being thankful for what they already have! 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.
It was this quote that made me think about whether Black Friday is 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. However, the emergency services may now 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 that Black Friday 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.
Analysis from Adobe states that consumers spent $7.4bn last Friday (29th November 2019), of which $2.9bn was on Smartphones. The 2019 figure was up by $1.2bn when compared to Black Friday 2018. The top five selling products were; LOL Surprise dolls, Frozen two toys, FIFA 20, Madden 20 and Nintendo Switch.
What can we take from this experience other than clamping our wallets shut?
Deals, deals and more deals. I can’t argue with that. With savings of 50% off, 75% off, 90% off it certainly did seem the time to buy. But the key was to create a budget and stick to it to avoid overspending.
Researching offers, comparing prices, sifting through the deals is a skill you perfected as you searched for the make and model of TV you wanted to buy. Usually though it ends up not being the one they are headlining. But research, planning and organisational skills are excellent skills you can put to good use time and time again (Boxing Day Sales, January Sales, Post January sales – you get my drift!).
I often talk about winning mentality, and having a winning mentality on Black Friday is no exception. 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, you built resilience when you made the connection that the make and model of TV you wanted was not actually in the sale (or did that just happen to me?!).
A definite no-no. If you didn’t have a budget, then it could have been very easy to get carried away and buy items thinking you’re getting a super deal that you can only get on this day. If you created a budget and stuck to it, then you’re the winner here.
Buyers’ remorse is a 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 overspending money or buying something you shouldn’t have. If any of your Black Friday purchases have made you feel this way, then you may be suffering from buyer’s remorse.
In the UK, there is a public statement – caveat emptor Let the buyer beware – which means the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made. 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. Make sure you know the returns policy for the sale items you bought. Just in case you’ve changed your mind and wish to return them.
Black Friday is undoubtedly an opportunity to clear out old stock which you would have to mark down or dispose of anyway. 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. This is an excellent opportunity to engage your customers or your marketing database with all your special offers. Did you have a Black Friday offer in place? Was it communicated effectively? Equally, this is a great time to take on new customers as prospects on the hunt for a deal may have come across you and liked what they found. Be mindful of their loyalty as they may be a bargain hunter and not in it for the long term. Remember Black Friday was a window of opportunity to grow your business, but it’s not your only opportunity.
If you’re promoting Black Friday deals, 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 of these things go wrong, it dilutes the experience for your customer. Were you prepared for the increase in volume? Did you have contingency plans in place?
If you decided to discount heavily to attract sales, I’m hoping you validated your numbers beforehand. If you didn’t, your margins might be suffering, profit may be down, and you may end up in a worse position than before you started. To survive, a business needs to make a profit. Before you offer any discount pricing (Black Friday or not) be clear about 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 you intend to lower.
During Black Friday, consumers are in a buying mindset and their enthusiasm to buy is at its peak. While this is good for the actual Black Friday day, it might have discouraged your customers from spending money in the weeks or days leading up to the big event. You may now be seeing a decline in your run rate and if you didn’t already you might need to take steps to mitigate it, or certainly plan for this next year.
Large retailers, both on & offline, offered loss leaders supported by significant promotional budgets. Black Friday is extremely tough on small-medium size businesses, and you may have found it challenging to be heard among the noise. Just remember one in three existing customers do not buy your complete range of products and services simply because they do not know you offer them! If you feel you never got your message across during Black Friday or it never mapped out as you planned, don’t worry the next sale day is only around the corner. Getting better prepared and give it another go.
So, what do you think? Was Black Friday your friend or foe? I guess it comes down to this, moderation. Not spending more than you can afford or discounting more than you have. Only buying what you need or offering only what you can. Everything in moderation.