Now that the summer is slowly coming to an end and seemingly, the worst of the Brexit dust has settled, retailers have started to think about the execution of their plans for the close of the calendar year.
Black Friday on 25th November, Cyber Monday on 28th November, then Christmas … what will you do differently from last year? Sales generators and margin eroders, Black Friday and Cyber Monday have proven to be two events that we all now have to seriously consider. Participation will prove to be a necessary evil: doomed if you do, doomed if you don’t.
On the one hand we all know that it brings customers’ purchase decisions forward at lower margins. On the other hand, if we do not participate in the madness, those sales may go to your competitors.
Having spoken to many of our client companies, there seems to be a different tactic depending on what business you’re in. Some of the premium, branded retailers will participate with focused offers on a (small) part of their range. They’re aiming to up-sell into full margin product and ‘staff-up’ accordingly, as last year many found that they had underestimated the footfall Black Friday generated and found themselves short staffed throughout the day. Other, general retailers, will take the blanket discount approach and clear any overstocks that may be accumulated by a probable slow Autumn. The hit on margin however will be significant and sales in the subsequent run up to Christmas Eve will most likely be slower again than previous years.
There is no doubt that the hype and press coverage around Black Friday has ‘educated’ the general public, so you can only expect the event to become bigger and bigger. So what to do and how to plan for BF 2016?
What measures have you taken to make sure that your website is robust enough to handle a huge surge in visitors and transactions? Can the fulfilment centre cope?
Is there an argument for segregating offers into in-store or online only? Have you allocated Open to Buy to special purchases sold on a ‘when it’s gone it’s gone’ basis, so that your current ranges are kept at full margin? How big is big?
One thing is certain, it is here and it is here to stay. Personally, I dread the development where one ‘clever’ retailer will start a Black Weekend – 3 days of sale madness. Now that will certainly provide a budgeting headache and a margin hangover!
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