For many UK consumers Black Friday is directly associated with amazon and their increasingly aggressive marketing of this busy shopping period, as well as becoming an increasing focal points for suppliers and retailers to drive end of year business.
However, in reality, Black Friday originated as the day following Thanksgiving Day in the United States (the fourth Thursday of November). Since 1952, it has been regarded as the beginning of the Christmas shopping season with the phrase being traced back to 1960’s Philadelphia where it was used to describe the heavy and disruptive pedestrian and vehicle traffic that would occur on the day after Thanksgiving due to heavy shopping activity.
By the early 2000’s Black Friday activity in the US had risen to new levels with stores opening earlier and earlier (culminating eventually in midnight opening) and with greater and greater activity around the date.
By 2014 Black Friday hysteria had finally hit the UK. More UK-based retailers adopted the Black Friday marketing scheme than ever before to the extent that during Black Friday sales in 2014, police forces were called to stores across Britain to deal with crowd control issues, assaults, threatening customers and traffic issues. After such chaos in 2015 many retailers took a step back from the activity and the pure play online dealers moved to take advantage. 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.
The truth is, whether you like it or not, Black Friday has become a fixture in the retail calendar and it appears to be here to stay. According to the most recent predictions from Retail Week, Black Friday is set to break the £2 billion barrier with 33.5% of consumers planning to buy something – but where, when and what is in the retailers’ hands as they take back the reigns of this pre-Christmas mega sale.
The consumer is now in control
So what impact has this huge shift had on our own industry and on shopping in general?
In the past, promotions were driven by the need to shift end of season stock, as a reaction to an unforeseen sales slowdown, or around key events such as Mother’s Day or Christmas. Mike Watkins, Head of Retailer and Business Insight at Nielsen UK, emphasised that “the challenge we have is that shoppers` no longer think in this way.”
The recession and discounting trends within the sector have fundamentally changed the consumers shop. Research from Conlumino reveals that 75% of consumers would rarely buy certain products at full price, and 62% say they wait to buy until a product is on offer or discounted.
In today’s digitally enabled world consumers can shop for anything, anytime from anywhere. No longer are retailers, distributors, or brands in control – it is the consumer that is firmly in the driving seat. “Put simply,” said Mike Watkins, Head of Retailer and Business Insight at Nielsen UK, “we should now consider ripping up the old rule books for promotional strategy.” As such, retailers need to find a way to play their cards better to make the most of this new consumer mind-set.
Of course the major activity is being driven by the major players, however Black Friday generates additional footfall in most town centres and online and there is no reason why the smaller independent sports retailer cannot take advantage of this new sales opportunity.
According to Dominic Allon, Europe vice president and managing director of Intuit QuickBooks there are five key things that owners of smaller retail organisations should consider when preparing their business for the Black Friday and Cyber Monday spending weekend.
1. Giving the right discount
Shop owners must be smart with the discounts they offer and make sure they are still able to make a profit whilst remaining competitive.
2. Buy first, return later
Smaller retail owners must think beyond the weekend and factor in the chance of returns into their finances, otherwise they could fall short when predicting their profit and loss.
3. Buying stock is a balancing act
Buying from suppliers may be costly, and on normal days when the shop isn’t as busy, having two of every item in stock may just be enough. However,more shoppers are expected on the high street during this bumper sales weekend, so having enough stock in store to cover extra sales is crucial.
Use data from previous years to understand what is likely to sell, and buy enough stock to keep customers happy. But, do bear in mind that going overboard and not selling risks problems for your cash flow.
4. Having to rely on others
Unlike larger retailers, most small business owners do not benefit from having their very own logistics service that can adapt to the demand over the busy period.
Instead, retail owners must rely on external services that are already busy with multiple other suppliers.
Small retailers must offer customers a guaranteed delivery time that aligns with what their courier service can offer.
Introducing a slightly longer delivery time over the busy period could help with the demand and keep your customers satisfied.
5. Plan, predict and manage
No matter how big a business is, the key to success over the Black Friday weekend is preparing for every eventuality.
It should not be weeks in the planning but months, and failing to have a complete overview of your finances could stop you in your tracks.
Having a holistic view of your finances that monitors all money coming in and going out is crucial to surviving the weekend of extra sales and extra returns.
If you play your cards right and plan for every outcome, your small retailing business can reap all the success of this long weekend of serious spending.