Black Friday: you know the deal. Massive discounts on pretty much everything from groceries to appliances, and even cars! While major retailers can afford to join in on the fun, how realistic is it for small businesses to be participating? Let’s face it, we’re in the business of helping small businesses, and we know it’s all about the hustle. So, could Black Friday potentially do us more harm than good?
The trend of crazy Black Fridays could be losing momentum, and 2021 might not be as busy as previous years. According to statistics from BankServAfrica, there was a 30% drop in in-store card purchases on Black Friday last year, as compared to figures from 2019. This can be attributed to fears surrounding Covid-19 and the subsequent economic impact of the pandemic. The Black Friday spark appears to be fizzling out… Let’s see what 2021 holds in store for us!
First things first, let’s break it down, and identify some of the Black Friday pros and cons for small businesses. By getting a good idea of the advantages and disadvantages of joining in on the event, you’ll be able to figure out whether it’ll be worth your time and effort as an entrepreneur and business owner, or whether it’s just going to put a spanner in the works.
What are the pros of celebrating Black Friday?
1. Clear out the shelves.
Whether you choose to offer a Black Friday one-day sale or a month-long discount, you have a better chance of clearing out slow-moving stock that may have been lying on the shelves for some time.
With old stock out of the way, you can add in new, trendier items that’ll sell faster. Maybe a fresh start before the holiday season could be just what you need to give your business a boost?
2. It’s a sure-fire way to get more exposure.
Black Friday does tend to have a bad rap because it creates an insane level of demand, and people go WILD trying to take full advantage of all the sales. But, with that high level of demand comes an opportunity for your business to increase its traffic and exposure.
By focusing on offering the best customer experience possible, you can capitalise on the boost in footfall and work on developing and cementing your customer base.
3. Black Friday deals = more sales.
Most people really look forward to Black Friday and prepare themselves to go on spending sprees. This means that they’ve most probably been saving up for some time and are ready to go all out when they come across a good deal.
The fact that they intend on spending counts in your favour, and makes it easier for you to turn prospects into customers. Ka-ching!
4. Boost your customer base.
During a Black Friday sale, you’ll be drawing more attention to your brand and its offering.
More attention = more visitors = more customers
If you’ve been struggling with building a good customer base, Black Friday is a great opportunity to connect with people, and work on building relationships with your future loyal customers.
Investing in customer acquisition can be an expensive feat. If your Black Friday sales go through the roof, you’ll be able to kill two birds with one stone: get new customers and save on customer acquisition.
What are the cons of celebrating Black Friday?
1. It can be risky, and you could get stuck in a financial rut.
Most major retailers can afford to slash prices on Black Friday, but small businesses, on the other hand, are more likely to face the brunt of offering heavy discounts.
With massive discounts come reduced profit margins. Even if your sales reach sky high volumes, your short-term profit margins could still take a knock. Yikes!
How far can your business discount goods, without affecting your profits at the end of the month? Figuring out that balance is crucial to ensuring that Black Friday doesn’t end up burning a hole through your pocket.
2. Tough competition – it can be hard to stand out from the crowd during Black Friday.
The giants in the retail industry typically celebrate Black Friday throughout the month of November. Their marketing campaigns during this time are off the charts – you’ll see their adverts EVERYWHERE, from newspapers to social media to TV.
Their aggressive marketing strategies can sometimes drown out the efforts of smaller businesses, resulting in either a not-so-successful Black Friday for small businesses or an increased marketing budget.
Cutting through the noise and making your voice heard is hard – but never impossible!
3. You could have a low-profit month as customers anticipate the sale.
As soon as you announce your Black Friday specials, customers will probably halt their shopping trips and wait until your sale goes live, so they can take advantage of low deals.
Prepare yourself to have a slow month/week from the time you announce your Black Friday plans until your specials actually go live. Sales will drop and footfall may be minimal until your offer is launched, as customers anticipate and bide their time getting their hands on discounted goods.
4. It can be tough to handle an intense crowd in your store.
Black Friday could result in a high footfall rate – but are your premises able to accommodate an incoming throng of customers?
You’ll have to prepare yourself for a jam-packed store with long queues. How will you manage the crowd (don’t forget to take Covid-19 social distancing rules into consideration, too)? You could limit the number of people allowed in-store at any given point, but you still run a risk of customers getting frustrated with the long wait, and leaving.
You’ll also need to make sure you have enough stock to sell, as well as enough consumables – such as shopping bags and till rolls.
It’s going to be difficult to cover your bases with all of these nitty-gritty crowd-related aspects in mind, but it’ll be worth it if you’re able to make a healthy profit at the end of it all.
There really isn’t a one-size-fits-all kind of answer to whether your small business should be joining in on the Black Friday celebrations, and only you can decide because you know your business best. Go for it if you think your business can afford to, and will be able to manage it at the end of the day. But if you think it’s too risky, and will do more harm than good, it may be worth skipping this one out!
The Yoco Black Friday Research Survey 2021
We asked 3000 Yoco merchants how Black Friday impacts their business. Here’s what we learnt.
Helping underdogs rise
Black Friday is a great opportunity for us to make business a little easier AND a little smarter for small business owners. That’s why we choose to do Black Friday every year. Visit yoco.com or your nearest Incredible Connection*, Makro*, or PepCell*.
*We recommend calling your nearest branch to confirm that they have stock.