Black Friday continues to dominate the retail calendar both in the US and the UK, and this year is set to be no different. As in previous years, the whirlwind phenomenon will cover high street and online retailers, with many likely to kick off their promotions this year at midnight on Thursday 22nd November. Online retailers in particular will no doubt be finalising their preparations to handle a surge in custom, given that Amazon and Argos enjoyed around £1.4 bn worth of sales on Black Friday in 2017. Whilst some retailers like B&Q have announced they will not be participating in Black Friday this year, it is expected that the vast majority of retailers, large and small, will try to utilise the event to their advantage. If you are planning a Black Friday event, here are seven steps to help you organise and run a successful promotion.
Keep your selection low, but your discount high
The very nature of Black Friday means that people will be looking for the biggest deals and offers possible, meaning that the most attractive discounts are likely to be around the 60-75% mark. Naturally this is not possible across a wide range of products, so it is worth looking into whether you could offer one or two at this level. You can still offer a lower discount on a wider range of products, but these will be your showcase items that will help drawn in your customers. When considering which products to select for the higher discounts, consider those which are particularly eye-catching, on-trend or in-demand. A huge discount on something the majority of your customers are not interested in purchasing is not likely to generate the desired outcome, despite the huge savings on offer.
Limit the quantity available
There has been much discussion about the long term implications of running Black Friday promotions, particularly around issues such as the cannibalisation of future sales, so it is a good idea to limit the quantity you have available at your Black Friday discount. Not only will this protect your future sales, but it will generate an immediate need for customers to buy in order to obtain the discount. I like to call this the ‘doorbuster’, so give some thought to what products and offers would generate the biggest ‘rush’ of customers through the door to purchase.
Consider the length of your event carefully
Far from being a one-day event, many Black Friday promotions now run across the weekend, and even for a week or longer. If you are planning to run a longer event, it is worth considering what different promotions you will be offering on each day, so that customers have an incentive to come back for new deals as the event progresses. You should make sure that you have at least one ‘doorbusting’ offer for each day of the promotion and can increase the sense of urgency by limiting the offer on that product to purchases made on a specific day only. Unless there is a specific reason or commercial benefit to running longer campaigns, I would usually suggest that shorter, sharper promotions are more impactful and cause less disruption to normal business operations.
Don’t just rely on your ‘doorbusters’
Although I have recommended selecting a small number of high-demand, high discount promotions, it is important that you are running a selection of lower level promotions alongside these in order to make the most of the event and your customer’s impulse purchasing. This is because putting all your eggs into one basket could be a dangerous move if a competitor is offering a better deal on the same product, or your customer simply doesn’t want to buy that particular item anyway. It is always advisable to plan for a selection of similar products on sale alongside your doorbuster, particularly if the price is still quite substantial even with the Black Friday discount applied. Retailer Next often employ this tactic, having huge discounts on key items alongside lots of similar items on sale, so that if customers don’t feel compelled to splurge on top model, they’ll be more likely opt for the promotion offered on a smaller/cheaper model.
Shift your end of season stock
Despite the run up to Christmas, Black Friday can be an excellent time to sell of some of your unwanted summer stock. Logistically, managing out of season stock can be a nightmare, either by taking up valuable space in the warehouse or by having to arrange for the sale of the stock to the secondary market. Many consumers appreciate the opportunities to buy summer stock out of season at a highly discounted price, such as garden furniture sets, BBQs and even swimming pools! Black Friday provides you with the perfect opportunity to clear some of your ex-season stock at a highly discounted price, making your operations more efficient whilst creating happy customers too!
Work within your means
Black Friday may have its benefits, but it also has the potential to cause problems with ‘business as usual’ in store, leading to poor customer experiences, lost sales and low staff morale. Marks & Spencer are considering avoiding Black Friday this year due to the ‘chaos it causes in store’, both during the rush of Black Friday and in the days afterwards when a significant number of the items are returned. When preparing for Black Friday, consider the logistics of your store, your staff resources, your IT equipment and your queueing strategies. Customers who receive a poor experience during Black Friday may abandon their purchase before reaching the till, or simply not return in the future, so if you can’t do it well it may be more sensible not to do it at all.
Cater to a multi-channel customer
Whilst some customers will eagerly await the prospect to join an early morning queue in order to grab the best bargains, others will be happy to stay indoors in the warm, shopping online from the comfort of their bed! If you have a physical store and an online presence, it is worth considering offering promotions on both, so that you can capture sales from various customers. If you have a regular customer database or membership programme, you might want to consider offering a preview event, where they can gain exclusive access to your Black Friday deals ahead of the general public. This can work wonders for boosting loyalty as well as encouraging early sales.
Creating a strategy that works for Black Friday can be highly beneficial, as you can easily adapt it for future event promotions, such as Boxing Day. The most important factor is to create a plan which works to your strengths and provides the best possible outcome for both the business and your customers. Whilst your motivation for engaging in Black Friday may be to follow the crowd, your strategy won’t necessarily be the the same as another retailer.
Naeem Arif is a highly experienced customer-centric leader with over 15 years experience as director of multiple successful Private Limited Companies in the Retail and Management Consulting world. He is the founder of NA Consulting, a retail and management consultancy, and the Co-Founder and Vice Chair of the Midlands Retail Forum. For more information, please visit www.naconsulting.co.uk