The good and bad about Black Friday in South Africa

Small and medium business expert at Sage, Anton van Heerden, warns that while taking part in Black Friday in South Africa may seem like a good business decision, it comes with potential pitfalls that need to be considered.

Black Friday is an American tradition that takes place the first Friday after Thanksgiving (25 November 2016) and is a day of big deals and promotions for American shoppers.

The day has already become popular in South Africa, as has 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,” van Heerden said.

He said that if you’re a business builder with a small retail operation, it’s a great opportunity to build some hype for your 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 warned.

The business expert provides a breakdown of the pros and cons of Black Friday for small businesses locally.

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.

Each small retailer must look at its business needs, customer expectations, capacity, and ability to execute before committing resources to Black Friday.  “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, van Heerden said.

Dion Chang, trends expert and founder of Flux Trends said: “We see a massive adoption of North American retail trends in South Africa – it is tested, it works and is already embedded in the minds of South Africans.

“Africa has an hour glass economy – with the rich getting richer, the poor getting poorer and the middle class being squeezed – people are going for deals just to make ends meet. For big and small businesses, this is definitely an opportunity for them to join and leverage this trend for their brand.”

Read: Here are South Africa’s best retail shops – as voted by you