Black Friday – what does it mean for small businesses and should you join in?
Black Friday is a phenomenon that has spread from the US throughout the world, to the UK and naturally, on to the equestrian world. The event happens on Friday after Thanksgiving and for a lot of people can signify the start of Christmas shopping. The day is ‘celebrated’ with lots of retailers giving out massive discounts for a variety of their products if not all. This is something that is easy for the larger brands to do, but what about the smaller businesses? Is there a pressure to also hand out discount to try and keep up?
Taking part in Black Friday is worth some serious consideration with both pros and cons to the event. The biggest advantage is more sales. Many customers now wait for Black Friday just so they can use the discount codes and buy a lot of their Christmas shopping in one day. In 2017 John Lewis noticed a pattern of searches for iPads and Sonos speakers indicating to them that many consumers were searching for the best gift deals. And in the same year Barcleycard estimated that sales were up by 8% from 2016. Whilst big flashy discounts will attract new customers to shop with you they will also help maintain older, loyal consumers. This year equine clothing brand Apt Cavalier is offering 25% off everything as a one off deal as a sign of appreciation to all of their existing customers. Using one off promotions is a great way of selling any stock that you do not wish to take forward as maybe its not part of an older collection like Aztec Diamond have done in the past.
However, these aren’t reasons to just jump on the bandwagon. Choosing whether to have discounts or not can be a catch 22. On the one side you can join in and be part of the 70% of retailers that offer a promotion, but risk not having your discount as high as bigger competitors or you can up your own discount to try and compete but risk losing profit from dropping your prices too low and it having an impact on sales margins (the cycle could go on). Customers will often wait in anticipation of these discounts causing sales to dip a couple of weeks before and will hunt around to ensure that they have the best deal out there.
As a small business it is important to remember what you can offer customers over big corporations, products are often not mass produced and many items are bespoke and hand crafted, this is a great USP that bigger brands can’t offer. This is important to remember if you are going to be offering a discount this Friday. Companies such as Amazon and Tesco can afford to slash their prices and fight to have the cheapest deal out there, however, a smaller business needs to remember to not price out of profit. There are however, other ways you can create some buzz on Black Friday without causing your business financial damage. Like Gabriella Shaw Ceramics who is offering a free coaster for the first ten customers that buy from their horse mug collection (also on discount at £20 for two).
If you have already have decided to take part, their are some key factors to remember. The age range of your customer can have a big impact of your sales and on how you should be marketing Black Friday. It’s reported that 49% of 18-24 year olds have said that the discounts have helped them buy Christmas gifts for family and friends compared with 25% of the general public. Is your demographic part of this category? If so, research has found that 61% of these people engaged with online advertising for Black Friday compared with 51% of other ages but were lower for emailed newsletters (42%) compared with the general public (45%). You can easily use this information to your advantage and to make sure you are attracting the right customers for your deals.
If you are still struggling to decide what to do then why not ask your customers, this is what Pegasus Jewellery did and got a positive response from their customers saying they did not want a one off discount if that would have an affect on next years prices, but would prefer to just have the continued good quality, free postage and complimentary gift wrapping. So although there are many different views of the successfulness of Black Friday it comes down to your personal preference towards the event and if your benefits outweigh the cons. Please just don’t feel pressured into doing it, sometimes it can really help to stand out from the crowd.