Black Friday not necessarily a “Black & White” decision for small business growth
Black Friday, once only a North American marketing frenzy, has quickly been adopted by the South African retail market. But just because everyone else is doing it…does it make sense for your small business growth? Let us consider the pros and cons of Black Friday for small retail businesses.
1. Shopper enthusiasm
Pro: Savvy customers look forward to a good bargain. They actually plan their year-end spending around this one retail event. They believe that they will enjoy savings and great deals. Which will often prompt larger spending and additional ‘treats’ for themselves. Neilsen’s Advanced Analytics division performed a study on the FMCG market that showed that November sales increased by 7.2% from the months preceding and by 8.8% from November 2016. The study also showed that in the FMCG market, in particular, the participation in Black Friday did not impact their December sales. But it really depends on your vertical. So do your research before opting in.
Con: There was a time when Xmas shopping mainly occured in December. Black Friday has changed this. So what was normally a very good Xmas trade, can now mean rapidly reduced December turnover. Retailers need to work this new spending habit into their projections and stock flow.
2. Significant noise
Pro: If you are smart, can deliver agile marketing messaging and have a tactical social and email marketing campaign behind you, you may well be able to fight the clutter and up your sales in a meaningful way.
Con: As a small business you are up against the big guys. Large retailers with huge marketing campaigns behind them. Certain larger retailers will even offer loss-leaders to draw in customers.
3. Shed old stock for small business growth
Pro: Small business growth is often the difference between sitting with old stock or shedding your load. Black Friday is a great way to encourage take-up of old redundant inventory. Making way for the new.
Con: On this day, over any other, customers are price-sensitive. They expect a good deal otherwise will gladly shop elsewhere. Heavy discounts might be the only way to win that sale over your competitor. But this is often a discount that isn’t worth the sale.
4. Scaling up for traffic
Pro: Black Friday offers the opportunity to scale up your customer traffic. It is a unique opportunity to attract new customers and satisfy existing ones. Make sure that your store has the capability to restock quickly, check customers out efficiently and plan for adequate security to prevent theft. Consider limiting the number of customers in-store at any given time. Hire additional security and sales assistants to manage visitors.
Con: Make sure your store can handle it. Sub-par in-store or online service can have a negative knock-on effect on your brand. So make sure you employ more staff on the day and upgrade your online systems so that they can carry an abnormal load should it arise.
5. What are your competitors doing?
Pro: If your competitors are in the space, this may mean it’s good for your vertical. Simply being there may be a good way to claim your space in some way.
Con: If you aren’t in the game, you can almost guarantee it will be a bad sales day. But FOMO alone (Fear Of Missing Out), is a dangerous hill to climb. So think clearly and make decisions that are right for your business!
The jury is out as to whether this makes sense for all small business growth. But what is very clear is that retailers think long and hard about capacity, strategy, bottom-line, and long-term impact. Small business growth is a delicate balance between doing what works and taking advantage of the right opportunities. But it’s also about knowing when to say no and sticking to your guns.