Historically, December is the most important month of the year for retail trade. But December 2018 failed to deliver. In 2018, South Africa retailers saw sales volumes decline by 1.4% year-on-year. But it isn’t all doom and gloom. The retail industry’s enjoyed a fruitful November with Black Friday boosting sales to 2.9% year-on-year.
For Dov Girnun, CEO of Merchant Capital, Black Friday may present smaller businesses with an opportunity to cash in on the hype but before they do so, it’s important that they consider whether the concept makes sense for their business.
“Small business growth is a delicate balance between doing what works and taking advantage of the right opportunities. Retail business owners should carefully weigh up the pros and cons before being swept away by the Black Friday wave,” says Girnun.
Below, Girnun outlines what retailers should consider before jumping on the Black Friday bandwagon.
Shift strategies: On this busy shopping day, savvy customers are looking for a good bargain. Offering great deals may even prompt greater spend. But this shift in shopping patterns can have a negative impact on a retailer’s December turnover. If you take part in Black Friday, be sure to factor this into your strategies for the end of the year.
Stand out: Large retailers with huge marketing budgets and can spend a fortune on their promotion efforts. In order for smaller businesses to compete, they need to deliver clever marketing messaging and be tactical about their social media and email marketing campaigns.
Shed old stock: Black Friday is a great way to sell older inventory and make way for the new. But brands need to realise that customers are incredibly price-sensitive. If the deal isn’t worthwhile, they’ll shop elsewhere. But if smaller retailers can’t afford to offer big discounts, participating in the sales simply doesn’t make sense.
Scale up: Demand is high on Black Friday but if your online service isn’t up to scratch it can have a negative effect on your brand. Finding success is all about making sure that you have the capacity to restock quickly and check customers out as efficiently as possible.
Consider the competition: Keep an eye on what your competitors doing. If they’re getting involved in the discount buzz, throwing your hat in the ring may be a good way to claim your stake of the market. Ultimately, if you choose to not participate in Black Friday,
you can pretty much guarantee that it will be a bad sales day.
“The jury is out as to whether Black Friday makes sense for all small businesses,” says Girnun. “But what is very clear is that retailers need to think long and hard about capacity, strategy, bottom-line, and long-term impact before committing to partake in Black Friday.”
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