Black Friday can be a real shot in the arm for sales, but it is important to plan ahead and make the most of the opportunities it presents. Retail expert Adam Bernstein reports…
An American sales import brought to these shores by Amazon in 2010, Black Friday has become notorious for shaking up the British retail landscape in the run-up to Christmas.
Black Friday can mean good deals to be had, but scenes of sheer pandemonium as punters fight for products such as TVs at knock-down prices illustrate the almost animal-like tendencies of some shoppers. At the extreme, police have been called and arrests made.
Interestingly, The Telegraph reported how human greed didn’t always yield the intended results as “customers who braved the violent scramble for big-screen TVs placed them on eBay, but failed to attract any offers”.
Black Friday is big. According to The Guardian, some £810 million was spent by British shoppers last year during Black Friday frenzy.
Online shopping tracker Postcode Anywhere reckoned that 404,835 orders were placed online on that one day, while Visa Europe reported that £360,000 was spent on its cards every minute. The question for those in the trade is simple – do they take part or should they sit on the sidelines and maintain their margins, but sell at lower volumes?
David Parkinson, managing director of Wilkinson Cameras, thinks the event cannot now be overlooked. He says retailers should put personal feelings aside and understand that “the excitement created by the whole of the retail and e-tail trade in 2014 cannot be ignored”.
So how can retailers use Black Friday to their advantage?
Check with suppliers
If the data is available, firms should look back at what they normally sell at that time of year, as well as the price and discount given. The aim should be to sell more of a given product on a Black Friday deal, making more money in the long run, while cross-fertilising other products – it’s what Amazon does at the bottom of each web page with multi-buy deals and links to products that customers have also bought.
“The excitement created by the whole of the retail and e-tail trade in 2014 cannot be ignored” David Parkinson
Of course, this means suppliers and retailers planning together. Mr Parkinson says Wilkinson started its planning early. Talking to ERT back in July, he said: “We are already having conversations with manufacturers and we’ll be putting together a list of lines and offers well in advance and hopefully Black Friday 2015 will kick-start our peak business as it did last year.”
Mr Parkinson knows that Black Friday can create a story: “Our most successful brand in 2014 was Panasonic, who doubled all cash-backs on imaging products for the duration of Black Friday weekend. This created a good story to sell, and lots of extra business for both ourselves and Panasonic – short, sharp, and limited quantities kept the promotion under control without causing too much disruption in the marketplace.”
An interesting part of retail psychology is that free shipping seems to be more important to consumers than huge discounts. Atleast that’s what a 2005 study, Free Shipping and Repeat Buying on the Internet: Theory and Evidence, from the University of Pennsylvania found. It noted: “Shipping discounts appear vital for attracting customers and generating sales, as approximately 60 per cent of online retailers cite ‘free shipping with conditions’ as their most successful marketing tool for driving business.”
A note of caution should be added, however. The typical Black Friday bargain-hunter is unlikely to turn into the ideal loyal, bread-and-butter customer who will reward heavy discounting with years of repeat business.
Viv Craske, head of digital at shopping marketing strategist Live & Breathe, suggests some kind of “lightning deal” promotion. The idea is that limited numbers of stock are offered at a discount price and for a short period of time in the week running up to Black Friday.
“Shoppers can see how long is left on the clock and the percentage of the stock that has already been ‘claimed’ – a method that plays on the growing consumer obsession with when to buy.”
A post on Shopify by Beth Morgan from marketing website Nerdist echoes this point. She suggests that someone feeling that they are about to miss out on a deal is a proven and powerful trigger, as it creates the feeling of scarcity and makes them more excited and so more likely to buy. It’s one reason why auctions can lead to inflated prices and remorseful purchases by the inexperienced.
Another tactic is to expand time-limited promotions and link them to specific and different methods of selling – in-store, online or social media. Each promotion can be used to create awareness of the given channel being used. Done correctly, this creates a following through shareable email, web links or posts read by followers and friends.
While retailers can make hay while the sun shines, they also need to keep the momentum up for the rest of the year. This is why retailers need to capture and harvest data collected online and then, carefully email offers to customers with a call to action. The same can be offered to social media connections.
Of course, online sales are one thing, but many shops have bricks-and-mortar stores that are also their window to the world.
We’ll be putting together a list of lines and offers well in advance and hopefully Black Friday 2015 will kick-start our peak business as it did last year
Concentrating promotional activity around online sales at any time, let alone around Black Friday, may be damaging and there is an argument to say that firms should run in-store-only promotions too. It’s what Asda did in 2014. The Guardian reported that the firm placed adverts for in-store-only sales that ran from 8am on the Friday and Saturday of Black Friday weekend on thousands of different items.
Wilkinson Cameras’ Mr Parkinson also believes this can be effective.
Holding a sale, or even offering items without a discount outside of a sale, is fraught with dangers. Not least of which is being able to fulfil orders from the extra demand generated by the frenzy of Black Friday. Consumers are becoming very fickle and don’t take kindly to offers advertised as available that aren’t, or which can’t be, delivered quickly.
A report in Retail Week in December last year detailed how some online retailers, including Amazon, Debenhams, Argos and Currys PC World, found that the sheer number of Black Friday orders meant long delays in shipping and delivery. Argos, for example, said that it had to extend delivery times from four to seven days following its Black Friday promotions.
Mr Parkinson offers this advice: “Be organised, be prepared and most of all manage your customer expectations. Increase stock holding in the stores to cope with extra demand as Black Friday is not all about online these days. Online, tell your customers what to expect, increase your delivery schedules and try to perform better than quoted.”
With the wonders of the web and the growing American influence on our retail sector, it’s clear that Black Friday is not going to go away. However, Mr Parkinson says that his sources on the other side of the Atlantic reckon that Black Friday has lost some of its lustre over the past few years and he’s sure the same will happen in the UK.
“However,” he adds, “careful management of your offerings can generate a huge amount of interest, brand awareness and extra business. Is it extra business? So far, yes. In 2014, Black Friday kick-started Christmas and the momentum continued through December.”