SMEs may be able to cash in on the discount-heavy Black Friday period by changing their approach, a new report from IMRG and Barclaycard has claimed.
According to Barclaycard’s head of small business, Greg Liset, SMEs can capitalise on the discount period by adopting some of the tricks used by their larger counterparts. But independents can also leverage their ‘unique position’ in the market by highlighting their status as part of the high street.
While large retailers may be “able to absorb the potential hit to margins, for SMEs it poses a significant challenge – how to secure a share of spend in an extremely competitive, heavy discounting environment while actually making any profit from sales activity”, said IMRG editor Andy Mulcahy.
However, Black Friday has no cultural significance in the UK and offers a capacity to adapt as an event, meaning there is an opportunity for retailers to make what they want of it, according to the report by IMRG and Barclaycard.
Some alternative strategies for SMEs to consider include:
- Running community events. This can create additional reasons for customers to visit stores, such as offering a free beverage or seasonal food.
- Showcasing your expertise. It isn’t always about price. Some people need support and assistance when looking for the right product, so having a special focus on customer service may prove to be a differentiator. Running free advice clinics or offering free repairs during the Black Friday week could mean getting shoppers in store as well.
- Personalisation. This could create an opportunity for SMEs and independent retailers to stand out, and may not even requiring discounting. Separating customers into segments, if it is possible to do so, and then offering them unique content or offers for being regular customers may help increase loyalty by showing them that you value their custom.
- Discounting positive ranges. This may offer the best chance of success, as it focuses on the customer rather than the available stock. Discount product ranges that could be regarded as ‘positive’, such as healthy food and drink, offers retailers the opportunity to showcase that they have the customers’ best interests at the heart of their campaign.
- Creating intelligent bundles. Increase the appeal for customers to complete a purchase, rather than discounting products individually. For some shoppers it is more important to shop with ‘principled retailers’ rather than getting something at a discounted rate. So things like supporting a charity may gain retailers a positive response from the local community. Instead of offering a standard discount, dealers might charge full price, but run a campaign that guarantees a percentage of the sales made within a specific time frame will be donated to a nominated charity.
And for those that are just plain against joining in with the discounting frenzy, that may be a strategy in itself. Taking a stand against Black Friday or having a ‘bit of fun’ during the event could be effective if you have the right kind of proposition and reputation with shoppers. But it won’t necessarily work for everyone.
“While it may seem daunting for a small business to take advantage of a traditionally discount-dominated day, simple measures can go a long way to driving up footfall – ultimately leading to more sales,” added Mr Liset.
The report concluded: “If the Black Friday period remains the peak shopping event of the year, it’s hardly something that can be ignored by SMEs, independents and other retailers who feel unable to compete in a meaningful way with some of the major retail brands. It’s all about identifying your strengths and turning them to advantage, in order to secure your share of the huge upturn in retail spending.
“Whether you choose to discount or not is entirely up to you – but don’t assume you have to sit on the sidelines in either case. Black Friday is what you make it.”