It may not seem it, but Black Friday is just around the corner (Friday, 29 November) and the planning for it will be well underway in most retailers.
As something that started out as a ‘stack them high, sell them cheap’ event, that most brands didn’t think about overly strategically, Black Friday has now become a staple of the retail calendar that customers’ expect and that brands need to think about much more strategically.
So here are our tips for how to make Black Friday work strategically for your ecommerce business.
Start with ‘why?’
No, not the great book by Simon Sinek. Start with “Why Do We Want to Do Black Friday?”
Most brands we talk to want to take part in Black Friday because they see a good sales opportunity – and that’s almost a given. But we don’t see as many brands thinking about why, and how, they want to do Black Friday in order to make it work strategically for their business.
By asking “why do we want to take part in Black Friday?” you will get a much clearer view on how you can make a Black Friday promotion work for you.
Some good examples of “why do we want to take part in Black Friday?” could be:
- We’re missing our sales targets and need to pull some revenue back
- We’ve got too much stock on certain lines and need to clear them
- Our business is dependent on returning customers and we see Black Friday as a great event to attract new ones
- Our business has a large number of lapsed customers and we need a way of re-activating them
We know that running targetted discount events has a great halo effect on our full-price sales
By having a much clearer focus on why you want to do Black Friday, you can begin to think much more clearly about the type of event you want to create, which products and categories you may look to discount and the types of customers you will target with your Black Friday promotions.
Chase profit, not turnover
Maybe this needs no explanation, but unless you are strategically not wanting to make a profit on your Black Friday event (for example if you are happy with a break-even on new customer acquisition) focus in on the profit, not just turnover.
By profit, think beyond your gross profit (sales – cost of goods) and look all the way down to net profit.
Sometimes this will be difficult to do as most finance teams report historically, but by thinking about the following you can start to model out the scenarios and think about what you need to change:
- What does it cost us to pick and pack an item in the warehouse? Will we need additional staff for Black Friday order volumes and what does this do to this cost?
- If you’re offering discounts, does your free delivery threshold still make commercial sense, or should you increase/remove it for the Black Friday event?
- Are your delivery lead times going to cause you a problem if your sales increase? If so, what is the cost of delivering these Vs employing additional staff to deliver them.
- Should you adapt your marketing mix and only push your Black Friday event in marketing channels where your CPA will remain manageable?
Think about the operational impact
Black Friday has been known to put a strain on most businesses – particularly in areas of pick, pack, despatch and delivery.
When planning your activity, give this some thought and look at what you can do to manage the impact of this on your operational teams and partners, plus any knock-on consequences on your brand reputation.
- Are your warehouse teams and briefed and prepared for the sales demand you are forecasting?
- Is the stock you are looking to sell available and in places that are easy to pick, pack and despatch from?
- Have you spoken to your couriers, prepared them for the demand and arranged extra collections if required?
- Is customer services on-board, resourced up and ready to handle increased enquiries during Black Friday and extra delivery and returns queries after the event?
These are just a few examples of the pain points to think about when planning a peak promotion, but there will be more. Walkthrough your entire customer journey both internally and externally to identify and pain points that could occur with significantly increased sales volume.
Think long term
Finally, don’t just think about Black Friday as a short term event. Even if you decide to use it as a short term sales driver and nothing else, think through the longer-term opportunities and consequences that this can offer you.
If it is just about short term sales, think about the longer-term brand impact if you fail operationally. If it’s not just about short-term sales, think about how you can make this Black Friday work harder and more strategically for your brand in the year after.
Need some help?
If you’re not sure how to make Black Friday work for your business, we’d be happy to help. Drop us a line, and let’s have a chat to discuss.