Over the past couple of years, it’s been difficult to miss the furore that Black Friday and Cyber Monday create in the retail calendar. We all know the pros of Black Friday and Cyber Monday with UK shoppers spending in excess of £3.3 billion over Black Friday weekend (Black Friday and Cyber Monday) in the UK in 2015! But with larger retailers questioning the profitability of the promotion, and some dropping out entirely, let’s take a look at the disadvantages of Black Friday and Cyber Monday and the potential ways retailers can take part.
The arguments against Black Friday and Cyber Monday
Retail giants like ASDA pulled out of the 2015 Black Friday rat race, is there a case for other retailers to follow suit?
Loss of margin
A lot of business is done on Black Friday and Cyber Monday, however, there is a lot of competition and obviously a lot of discounting which takes place. By so heavily discounting products in order to compete against one another retailers have been losing out on margin and profit.
Potentially damaging to your customer relationship
The upside of discounting your products is it can attract new customers to take that first step to purchase with your brand. Even with the discount, considering the potential customer lifetime value of this customer, the promotion is worthwhile. However, the uncertain demand that comes along with heavily discounting your products can mean that you are unprepared in terms of potentially website crushing traffic levels and fulfilment failing to deliver the right products in the right amount of time. Introducing your brand to customers in this way can in fact do more damage than good (that free next day delivery might not have been a great idea in hindsight).
Cannibalising Christmas shoppers
Much research indicates that sales slowed in October 2015 as consumers waited for Black Friday and Cyber Monday to commence their Christmas shopping. So although it creates a buzz and peak in sales, these could have been customers you would have got anyway but at full price!
Well the evidence is stacking up, so, is it better to just not take part?
“it is impossible to put the genie back in the bottle” – Andy Street, Managing Director of John Lewis.
Whether we like it or not, Black Friday and Cyber Monday are a firm fixture on the retail calendar and ignoring them is not a realistic option at this point.
So how can you play the game without getting burnt?
Cyber Monday or Cyber Week?
Black Friday will fall on November 25th and Cyber Monday on November 28th in 2016. However, in recent years the trend amongst retailers has been to extend these sales for an entire week. Extending your sales over a longer period than the traditional special 2 days has a number of advantages:
- Less risk of disappointing your customers with failures in delivery
- Less chance of your website crashing with heavy traffic at one time (and less anxiety as those sales slip away)
- The increased time period for sales means that the sense of urgency is eased somewhat amongst consumers, allowing them to take more factors into account than price (like brand!)
Black Friday and Cyber Monday pregame
Although Black Friday and Cyber Monday promotions are lasting longer and longer, you will want to make sure that your audience knows what’s going on. You should be preparing customers for your imminent sales by publicising them before they begin.
You don’t have to lay all your cards on the table in terms of specific discounts on specific products, but a gentle reminder that your sale is starting soon and what kinds of discounts and products are available will pique your audience’s interest. That way when sales start you’ll be at the forefront of their mind.
Utilise social media and email to remind your customer of these promotions. Don’t forget, online channels can be used to remind customers of promotions taking place in-store.
In 2015 retailing behemoth Amazon started preparing customers 3 weeks before Black Friday! Taking it a step further and launching pre-deals in addition to offering Prime members “Lightning deals” which were exclusively available to them ahead of public release.
How to take part without a price war
Heavily discounting products is not the only way to make Black Friday and Cyber Monday exciting for your audience. There are some other marketing tricks you can have up your sleeve to try and build excitement and a feeling of value for money, for example:
- Releasing special or limited edition products on Black Friday and Cyber Monday
- Selling discounted “bundles” of your product which includes a mix of some higher margin items, you can offer savings to customers in a more affordable way.
- Ensure that products which are discounted are merchandised well to encourage additional cross sells of full price items.
The best way to prepare for Black Friday and Cyber Monday
Ultimately it is more viable for some industries to be less involved in the heavy discounts of Black Friday and Cyber Monday than others. The best way forward is to do in-depth analysis from last year and ask:
- What promotions and products worked well last year?
- What didn’t work well last year? Were there problems with your website or fulfilment that could be resolved this year?
- What did your competitors do last year? How can you prepare against similar promotions and did they do anything that might work well for your brand?
Thanks for reading
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