What SA retailers need to know about Black Friday

For better or worse, Black Friday has become a major shopping trend in South Africa, and with it comes the opportunity for retailers in the country to make a big splash.

However, Daniel Gross, CEO of local digital ad agency AdMarula, says that retailers looking to get a piece of the consumer craze pie need to take their own capabilities into consideration before diving right in.

“Black Friday is fast becoming the most important date in the online shopping calendar,” Gross said. “Whether you’re a small or large retailer, you may wonder whether it’s a good idea to participate in the mayhem of the day where crowds pack shops and storm websites looking for bargains.”

According to Gross, there is no clear-cut answer to whether Black Friday and Cyber Monday deals are for you as a retailer or not.

Black Friday sales between 2015 and 2016 more than tripled, and the same is expected for this year if not more – but some strategy and consideration is definitely necessary from marketers to maximise the opportunity, he said.

He listed some pros and cons to consider.

Pros:

  • Customers are more likely to buy goods from you that they usually get somewhere, so you have an opportunity to attract new customers on Black Friday.
  • There’s a high level of enthusiasm and awareness among those treating themselves or shopping for Christmas gifts.
  • You might be able to attract some good business with low-cost, tactical email and social media campaigns and a sharp message.
  • Trying to get rid of that old inventory? Then this is a great opportunity as you can mark down the price and dispose of that stock.
  • You can generate a lot of footfall into your shop or traffic for your website with the right offer.

Cons:

  • Do you have the capacity to serve the customers you attract? If your website crashes 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.
  • The competition on Black Friday is intense, especially with large e-commerce sites and big retail chains offering loss-making deals just to get people into their stores to spend money. It can be hard to cut through all this noise.
  • Customers are price-sensitive on Black Friday, so you could find yourself needing to discount aggressively to close sales.
  • Customers may come to expect great Black Friday deals and therefor spend less in the weeks leading up to the big day.
  • Making a sale on Black Friday doesn’t guarantee a loyal customer – they could simply be bargain hunters.

One of the biggest complaints about Black Friday in the past has been that it over-extends the “silly season”, and brings it forward by a few weeks.

This, in turn, leads to a slump in sales during what is viewed as the traditional festive period, creating an ironic retail problem – where Black Friday does not generate extra sales in the run-up to Christmas as before – it simply brings sales forward and encourages people to buy their presents at a discount rather than full price.

According to a study done by PwC in 2016, this proved to be even worse for physical retailers, where margins are much thinner – consumers tend to shop for discounts online on Black Friday, and leave brick and mortar stores in the lurch.

In a South African context, this is not going to be felt as hard, as online sales still make up a small portion of total retail sales; however it is something brick and mortar stores need to consider if they are planning on competing with online shops on Black Friday.


Read:  Where to shop this Black Friday in South Africa

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What SA retailers need to know about Black Friday