Should you participate in Black Friday?

We roll around again to the craziest time in the retail calendar...Black Friday.

It's crazy for so many reasons including, but most definitely not limited to:

1) It's tied into a US holiday that isn't celebrated here in the UK.

2) It's an artificially created shopping peak that initially generated incremental spending in the UK when it was first a 'thing' but now, on the whole, is a pull forward of consumer spending from December.

3) Most retailers do not wish to participate in it! But many are now stuck in the cycle and feel they must in order to show year on year improvement, and to retain their voice and share in a noisy market.

4) Consumers are not always getting the bargains they think they are - retailers who do participate now plan for Black Friday months in advance. They shape their buys and the perceived discounts to create an attractive customer message that is already built into their planned margins. But when you drill a little deeper and compare prices across the market, the offers are not always as amazing as they seem.

There is one big benefit that Black Friday does bring to the UK retail market

Retailers know they can plan for a big traffic week (it’s no longer just a weekend!) because there is a collective 'shopping' mindset. Whether that’s because consumers are now ready to think about their Christmas shopping, because they’re actively hunting for offers or because the upweighted messages and advertising across the industry are doing their jobs, there is a material increase in footfall and traffic during the Black Friday shopping period.

My usual advice to small and independent retailers is to steer clear of big discounts

I advise my clients to resist jumping onto the Black Friday wheel because, once you start, it's incredibly difficult to get off. The large chains are testament to this, having to continually revamp marketing strategies in order to successfully trade over the artificially created sales peaks from prior years.

Some retailers have started to employ savvy marketing tactics to mitigate the damage of Black Friday, for example:

• clever messaging to highlight existing promotions and wrap them up into a Black Friday banner

• being actively anti-Black Friday and making a public stance about not participating, perhaps also explaining it’s because they offer fantastic value every day (the implied message being that they do not want to hoodwink customers with disingenuous offers)

BUT, there are things you can do to take advantage of the additional customer traffic over the Black Friday period…

Choose your most important areas of focus and make sure you're amplifying them during the Black Friday period where more eyes will see them. That may well include offers…but offers that are right for your customers and/or necessary for your business. And offers that - from a marketing perspective - do not necessarily need to fall under the banner of 'Black Friday'. If you want to avoid including the words ‘Black Friday’ in your marketing, you can!

This has been a bizarre couple of years

So if you are carrying too much stock in certain product areas and you know you will need to take price or promotional action to reduce or clear them, it’s very sensible to consider matching the timing of your promotional action to the market-wide jump in shopping behaviour that Black Friday brings. It is also likely that you are facing stock shortages on some (or lots!) of items; steer clear of adding these items into any discount or promotional activity that would mean you are unnecessarily giving away profit on products that would sell anyway. And if you are short on stock across the board, you don’t need to take any promotional action - just let everything sell at full price.

Your ideal customer remains the same

Don’t let Black Friday scare you into forgetting who your ideal customer is, why they choose to shop with you or the value that you deliver. If you are choosing to run an offer, either because you want to benefit from the Black Friday shopping halo effect or because it’s necessary to clear stocks/release cashflow, then - wherever possible - consider value added or ‘positive’ promotional activity. (Positive promotions are those that are marketed in a positive way to customers - i.e. not labelled as clearance activity – and/or those that will drive overall increases in sales AND profit £ because they are increasing KPIs such as Average Transaction Value).

In a nutshell: wherever you can, avoid straight price reductions.

And, unless you have entire departments that are hugely overstocked, avoid offering a % discount across the whole store or whole departments – this will result in selling more of the stuff that’s already selling and unnecessarily giving away profit in the process.

The concept of not devaluing your brand during Black Friday applies to service businesses just as much as (if not more so because the working capital/stock risk is so much lower than) product businesses.

Examples of value added promotions, or positive promotions:

• demonstrating customer appreciation or rewarding customer loyalty

• offering extra value e.g. gift with purchase, free shipping

• increasing average basket size e.g. multibuy or minimum threshold spend to trigger a basket discount

• encouraging repeat custom e.g. offering a voucher to be redeemed against a future purchase

Use Black Friday to your advantage but do not become a slave to it!