Black Friday- Good or Bad for Business?
There’s no denying that we all love a bargain and that spending money is a favoured pastime of ours which often makes payday seem lightyears away. However, in light of the recent fact that we have 12 years to reverse the effects of climate change (‘Climate Emergency’ has been proclaimed Word of the Year by the Oxford Dictionary), many are beginning to scrutinise their spending habits, opting to make and mend their possessions instead of tossing them in the trash.
Author: Ms Katy Jones
Originating in the US, Black Friday is the day after Thanksgiving and traditionally declares the start of America’s Christmas shopping season. It also gives shopaholics and festive folk alike a guilt-free excuse to buy yet another blender/woolly jumper, claiming it to be an essential item they simply can’t live without.
With all the hype surrounding this day and the part it plays in promoting overproduction and wasteful spending, with catastrophic implications for the planet, retailers are beginning to question whether it’s worth it. The question stands: Is Black Friday essential to boosting annual profits…?
…Yes, of course!
According to the Centre for Retail Research, Brits are expected to spend around £2.6bn online and in store. With such staggering spending figures, it’s easy to see why small businesses opt to take part in Black Friday. With consumers on the look out for deals as the day approaches, marketing moves are ready to be absorbed by those eager to spend spend spend.
With the right planning and supply, Black Friday has the potential to be massive for SMEs. The key is to create an irresistible offer that makes customers feel they are getting maximum value for money. This could be done by discounting your products or services or creating bundles of products. Generating awareness early is necessary to keep your business in the mind of your customer base, achievable through initiatives such as social media and direct mail campaigns.
No, not necessarily…
Yes, sale numbers are significant but Black Friday is not actually the biggest sales day of the year- this typically falls on ‘Super Saturday’, the Saturday right before Christmas. Figures show that profits aren’t notably higher for retailers who fully commit to Black Friday versus those who are more conservative about it. In fact, retailers often lose money, with extra hours amounting to extra pay and hassle in return for low-margin purchases, often made by one off customers not likely to return, also known as ‘low-value’ customers.
Many large name retailers such as Monki and Asda are opting out of Black Friday. The former, naming their campaign ‘Black Fri-nay’ are passing due to environmental reasons. Customers returning clothes bought online on Black Friday is usually commonplace, with packages ending up back on a truck or plane to the warehouse- not exactly carbon neutral.
Plenty of business owners believe they offer great deals all year round, therefore see Black Friday offers as a hindrance to their profits. With the recent rise in consumers choosing to buy from independent businesses, many are happy to pay the proper price for something to account for labour, materials and energy costs the business incurs.
As conflicting research suggests, Black Friday is a tricky situation to navigate as a business owner. Rest assured however that if you don’t partake, your business will still live to trade another day.