The Black Friday Illusion

The past week has seen my inbox inundated with Black Friday offers.

For many, Black Friday started on Tuesday and ran well into the following week. And whilst there is little doubt that plenty of transactions were completed - both online and off - someone has to ask whether or not the Emperor is naked.

It is interesting that, in the UK, ASDA, the people who, as part of the Walmart group, introduced Black Friday to the UK, decided to sit it out this year. And, whilst there are many new adherents in the business world, a full 27% of companies that ran Black Friday promotions last year did not run them again this year.

Clearly, my perspective is European - although I manage online marketing campaigns across the world. We tend to follow the marketing trends of the US, blindly believing them to be effective. Black Friday is no exception. We have jumped on the bandwagon with abandon - equating sales with profit. Turnover with success. This is a mistake.

As an online marketer I am very focussed on my client's KPI's - if they don't have any, we implement tracking for them as a priority prior to launching any campaigns. I like to know just how much a sale is costing us and just how much that sale is worth to the business. This will usually go beyond the simple subtraction of revenue less cost - but, rather, will consider fulfillment, operating costs, lifetime customer value, etc.

Online traffic for its own sake is, frankly, pointless. And yet, at times such as these, many businesses forget this. Black Friday focusses our efforts into a day (or a few days) to simply see how much we can make the register ring.

In this blindness, we slash prices to compete with those that are slashing their prices. At this point it is timely to remember that there is always someone prepared to go out of business faster than you.

We generate expensive advertising campaigns to draw more of these bargain hunters to our store - bricks and mortar or virtual - and we increase our staffing levels to cope with the volumes.

And volume there is. This cannot be denied. Without it the illusion would collapse. Just like the crowds lining the streets as the Emperor displayed his new suit, so the sheer volume of sales is staggering. The news channels are filled with reports of stores overrun with shoppers. Online fulfillment operations with packages flying by on conveyor belts. It is all very impressive.

But it is nothing more than a race to the bottom.

The winner is the business that can make the least money - more times than everyone else.

The news reports on the profit margins, the dips in sales both before and after the promotion period are non-existent... this is not news.

I made one purchase on Black Friday. The image I have used in this article is from an image bank. As I write posts on my marketing blog I use credits. I buy new ones as and when I need them. On Black Friday I stocked up on credits at a 50% discount. I would have bought these at full price - I just bought them a little earlier than I would have otherwise done. 

Frankly, that doesn't make sense for the image bank.

I know there are many companies that make Black Friday work. They can move old stock, they can boost cash flow, they can generate up-sells and remarketing lists - but for many these are not reasons, but justifications.

When, as a child, I complained that I was not being permitted to do something "all my friends were doing" my Mother (like every other Mother in history) would reply "If your friends went and jumped off a cliff, would you do the same?"....

Perhaps we should ask ourselves the same question in respect of Black Friday - just because everyone else is doing it, is it good for our company? Perhaps by taking a step back and allowing our competitors to thrash it out in a fight to see who can make the smallest profit we would benefit more.

It is safe to be in the crowd. If everyone else is running a Black Friday promotion it does take a degree of courage to propose doing nothing. After all, we might be missing out on all those sales. But we must ask ourselves whether we truly want these sales in the first place or if it is just that we just don't want our competitor to have them. If we look at the numbers, it might be that this is precisely what would be best for our business.