In this article, we explore the potential Black Friday benefits for retailers, and provide tips on how to attract customers without significantly impacting revenue.
Black Friday benefits for retailers
With retailers using the day to provide generous discounts on their products, Black Friday is now the biggest online shopping day in the UK with steady yearly increases in sales. With the potential to attract large volumes of traffic both online and in physical stores, the allure of Black Friday is difficult to ignore for retail businesses.
Have you analysed your online presence and ease of which your customers can find and search for your products online?
Gain and retain new customers
The day presents an opportunity for retailers to drive sales and acquire new customers through product discounts. Though offering discounts on your products may lead to reduced profit margins, the retention of new customers can offer long term benefits for your business with repeated purchases.
Can you get new customers signed up to receive your regular promotional communications?
Clear old inventory, introduce new stock
Black Friday is also an opportunity for your retail business to clear old inventory so that you can introduce new stock in the run up to Christmas. Especially relevant for fashion and electronics retailers, this allows your business to maximise sales of old/hard to sell products (i.e. end of season clothing, dated TV/laptop ranges) at attractive prices while enticing customers with new products for Christmas shopping.
Have you reviewed which stock to include and exclude from sales?
Personalised promotional strategies
As well as being a day to provide general promotions for the public, Black Friday can be used to target more personalised offers for your most valued customers. For example, you could provide additional promotions for loyal customers or attempt to re-engage with inactive customers.
Have you considered offering customers a discount on a product they previously viewed online, or free shipping on purchases over a certain amount?
Do not mislead your customers
According to recent research by Which?, just one in 20 Black Friday deals are genuine. The research conducted was on 83 Black Friday sale items last year, most of which were available for the same price or cheaper at other times of the year.
This research showcases the importance of not misleading your customers. As consumers become more aware of pricing strategies, Black Friday deals may lose their appeal as people become more sceptical about its legitimacy.
Have you reviewed your pricing and promotional strategy to ensure your deals are unique and will not be repeated in future months?
Have you considered the impact on your profit margins?
Offering generous discounts on products can be an attractive selling point for consumers, however this may not be the best strategy for your business’ profit margins.
Being smart with promotional strategies means giving customers value but not sacrificing revenue.
One way to achieve this could be giving away vouchers and gift cards with Black Friday purchases. For example, Apple offer gift cards worth £120 with selected Apple product purchases. This not only incentivises customers to return to Apple and buy future products, but also means the retailer is still selling products at full price.
It can also be more effective to use additional products as incentives and rewards. For example, if you offer £30 off every phone purchase, it costs you £30 in cash. In contrast, offering a free £30 phone case with certain smartphones will cost you considerably less in cash yet still provides a benefit to the customer.
“The trick, therefore, is to identify high value, low cost, additional products that the customer is not already buying – and offer those as your promotional giveaways. That way you don’t displace any real revenues, but you do give your customer very real value” says David Sharp, Partner.
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