Business 101: Three strategies for SMEs to capitalise on Black Friday
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BLACK Friday, which takes place next week, was traditionally an American shopping phenomenon brought on by a stock market crash in 1869. Since then, it has grown in popularity throughout the world.
On this day, consumers flock to shopping malls to take advantage of discounts that are exclusively available on the day or into “Cyber Monday”, the following Monday.
Since the onset of the pandemic, e-commerce retailers have been positioned to capitalise on the fact that people prefer to shop from the comfort and safety of their own homes or offices.
Last year, just under 50 percent of South African adults made purchases during the Black Friday period, with online transactions spiking more than 60 percent.
This year, predictions are that up to 74 percent of South African adults will make a purchase on Black Friday, provided that the discount is more than 50 percent – an indication that consumers are tightening their purse strings and being more discerning.
We’ve seen large retailers implement strategies to maximise sales during this period; with some extending Black Friday throughout the month, hosting weekly or daily deals, or implementing a “countdown deal” strategy.
Three ways SMEs can take advantage of Black Friday:
1. Offer giveaways instead of discounts
It’s difficult for small businesses to compete with mass retailers who buy stock in bulk and have the balance sheet to offer the stock at hugely discounted rates, but there are ways to circumvent the challenge. SMEs can offer giveaways and use the opportunity to clear excess or old stock. Hair salons for example, can offer a free head massage or treatment for anyone who gets a haircut on Black Friday. Thrift stores can offer a free accessory when they purchase an item of clothing. The aim is to make sure that a giveaway deal will not set them back more than a huge discount would.
2. Boost basket size
As an SME, you can use Black Friday to encourage your customers to increase their basket size and shop more than they usually would. A three-for-two special, whereby customers who buy three products, get the cheapest free, is an effective way to increase their basket. Another is to offer free shipping on online purchases over a certain amount.
3. Build hype
If you’re an SME with an email database that you’ve been building, now is the time to optimise your communications strategy. Email open rates will probably be higher during the Black Friday period because consumers are expecting good deals and discounts.
SMEs who may not have the financial standing to turn Black Friday into “Black November” need to find ways to make the most of the 24 hours. A tactical way of doing this is by having hourly sales – every hour a new product or collection of items can go on sale, with a clearly communicated cut-off time. This will produce a sense of urgency in potential shoppers.
Social media and email are useful tools to create hype around hourly deals, offering “sneak peeks,” and “early bird VIP access” to regular shoppers.
Remember, data is a powerful tool. Do a reconciliation every year after Black Friday to determine which strategies worked best, and then build on that next year.
Ben Bierman is a managing director at Business Partners Limited (www.businesspartners.co.za).
*The views expressed here are not necessarily those of IOL or of title sites.
BUSINESS REPORT ONLINE