The pros and cons of Black Friday for small businesses

How to cash in on this retail tradition


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Black Friday takes place this Friday. It's a day of big deals and promotions for shoppers and like other American traditions is slowly gaining popularity worldwide including South Africa. 

"Black Friday is already popular in South Africa, as is Cyber Monday, the following Monday (28 November 2016) when online shoppers are out in full force looking for tech and gaming bargains. We also see countries like Kenya and Nigeria following suite, with e-tailers planning big discounts," says Anton van Heerden, Executive Vice-President, Africa and Middle East at Sage. 

But can small businesses benefit from the tradition? Yes, says Van Heerdeen, however there are some factors to consider. 

"On the one hand, it’s a great opportunity to build some hype for your small and medium business on a day that consumers are particularly receptive to spending money. On the other hand, your promotions and marketing may be drowned out by the noise generated by retailers with massive budgets for promotions and advertising," he adds. 

To help small business owners decide whether to take part in this retail tradition Van Heerden lists the pros and cons of Black Friday. 

1. Shopper enthusiasm
Pro: Customers know about Black Friday and look forward to shopping for bargains on the day. There’s a high level of awareness and interest among those treating themselves or shopping for Christmas gifts.

Con: If customers expect you to have wonderful Black Friday deals every year, it might discourage them from spending money in the weeks leading up to the big day.

2. Intense competition
Pro: If you’re agile enough, have the right offers and a sharp marketing message, you might be able to attract some good business with low-cost, tactical email and social media campaigns.

Con: The competition from other retailers is intense, especially with large ecommerce sites and big retail chains offering loss-leaders to get people into their stores to spend money. It can be hard to cut through the noise.

3. Rid your business of old stock
Pro: It’s a great opportunity to market old inventory that you would need to mark down or dispose of, anyway. 

Con: Customers are price-sensitive on Black Friday, and you could find yourself needing to discount aggressively to close sales. 

4. Scaling up for customer traffic
Pro: You can generate a lot of footfall into your shop or traffic for your website with the right offer. 

Con: You need to be sure that you have the capacity to serve the customers you attract – if your website falls over under the weight of thousands of visitors, your delivery logistics aren’t up to scratch or you don’t have stock to service demand, it could damage your brand. 

5. Draw new prospects
Pro: Shoppers are adventurous on Black Friday, so you have an opportunity to attract new customers or to get customers to buy goods from you that they usually get somewhere else.

Con: It’s open to question how loyal some of these customers will be – they could simply be bargain hunters.

As the pros and cons show, there is no clear-cut answer about whether Black Friday is a must for small retailers – each must look at its business needs, customer expectations, capacity, and ability to execute before committing resources to Black Friday., says Van Heerden. What is clear, however, is that you must do Black Friday well if you are going to do it at all – or else you might end up with disappointing results and angry customers. 

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