Maximising Black Friday opportunities can be a game-changer for many businesses, offering opportunities for increased sales, brand exposure and customer growth. Black Friday and Cyber Monday are now the two biggest sale days of the year in the retail calendar. It means big discounts, large sale quantities and brand exposure – but does that mean that your business should join in on the frenzy?
We know, it sounds ideal, and you’re probably tempted to start planning your sales. But before you do, we want to give you five things to consider to decide if it’s time to maximise Black Friday for your business.
Black Friday and Cyber Monday gained popularity in the United States in the 80s, but in recent years reached Australian shores and is estimated to overtake Boxing Day as the biggest sale day of the year.
How are Australian business buying behaviours shifting with Black Friday Sales?
Black Friday sales and Cyber Monday are geared towards the B2C (Business to Consumer) market. Think of retail stores, online shopping platforms or any brands that sell electronics, clothes or household goods to the everyday buyer. Due to the sense of urgency created by these sellers, this generates intense, short-term sales peaks, with people often holding off on purchases until these discounts roll around.
B2B (business to business) markets haven’t yet really adopted the Black Friday and Cyber Monday model en masse, but that doesn’t necessarily mean that they won’t. B2B sales typically require more planning, relationship building, bulk buying and larger contracts, which make them more complex than B2C sales.
For B2B companies, monitoring how consumer habits influence business buying behaviours can help forecast if and when maximising Black Friday sales could become relevant in the B2B space.
Are the sales relevant to your target audience?
It may seem obvious, but don’t underestimate the power of truly understanding your target audience when it comes to the decision of whether or not to leverage Black Friday/Cyber Monday-style sales.
Analyse your customer’s buying habits. How much of an increase in sales have you seen when you have held a sale in the past? If you can see that your customers love shopping for a bargain, participating in Black Friday/Cyber Monday deals is a safe bet.
However, if your business offers a high-end, luxury service or product, Black Friday sales could potentially cause more harm than good. By participating in huge sales such as these, offering discounts can run the risk of devaluing your brand. Our top recommendation? Do some market research. See if other brands of a similar calibre have participated in these sales before and what discounts they offered. This can help you gain a clearer understanding of whether this is a sale that both you and your customers can benefit from.
Can your business afford discounts?
This is a point that unfortunately some businesses don’t take into consideration when diving into Black Friday/Cyber Monday sales – don’t let that be you! You need to consider your margins. Is your business able to comfortably afford to offer discounts without hurting your profitability?
To decide on whether your business can afford Black Friday discounts, check how much profit you make on each product and set a safe discount limit. You need to consider whether the discount will bring in enough extra sales to make up for the lower price, while factoring any extra costs such as marketing or staffing.
If the big discounts are not viable, you can still maximise Black Friday by offering deals such as product bundles or special offers that will keep your customers interested, without hurting your profits.
Use loss leaders to your advantage
A loss leader is a product or service which is sold at a very low price, sometimes even at a loss, to help draw in customers. Businesses looking to leverage Black Friday often use this tactic, drawing customers in with an irresistible deal, in the hopes that they will buy other, more profitable items at the same time.
For example, beauty salons may offer a first-time deal on treatments, which in turn encourages clients to return to them for full price services. Technology retailers may offer discounts on products such as gaming consoles, in the hopes that the profits will be made up for through the coinciding purchase of accessories or games.
This approach can be a powerful way to attract new customers and drive retention, but use this strategy wisely. Relying heavily on loss leaders can erode profit margins don’t make up for the discounted prices, as well as running the risk of inventory challenges if the loss leader item is too popular.
However when used wisely, loss leaders can build loyalty, increase sales and keep customers coming back for more.
Can your supply chain handle the heat?
Black Friday and Cyber Monday sales may look like sunshine and rainbows for business from the outside looking in, but in reality, these businesses need to keep up with the demand.
Ensuring you have enough stock, inventory and staff to meet the increased demand of these sales is crucial. For product-based businesses, running out of stock can lead to lost sales and disappointed customers, which could result in your business leaving a bad taste in someone’s mouth. Service-based businesses faced similar risks if they are unable to accommodate the influx of new clients, risking poor service and damage to reputation.
By carefully and properly planning around inventory, logistics and staffing, your business can optimise Black Friday opportunities successfully and avoid common pitfalls.
Maximise opportunity without compromising growth
Ultimately, participating in Black Friday and Cyber Monday sales can give your business a valuable boost in short-term sales, brand awareness and attracting new customers.
However, it’s just as essential to weigh up these benefits against your business’s long-term strategy. Whether you’re offering discounts, promoting a loss leader, or preparing your inventory and resources, thoughtful planning is key to making the most out of the sales season.
By aligning your approach with both immediate goals and sustainable growth, your business can reap the benefits of Black Friday and Cyber Monday sales, while building valuable customer relationships and future success.
