Retailers Don't Need Black Friday Reductions

Since the phenomenon that is "Black Friday" hit the European market with the UK back in 2010 it was growing year-on-year.

It initially started as a day event, but grew into a weekend, then a week, and now a lot of larger retailers are doing month-long Black Friday deals.

So what has changed in recent years?

• The emergence of buying fewer products

Consumers' spending habits are changing as more and more customers are seeing the environmental impact of mass spending as it promotes overconsumption.

One such retailer, the Irish-based?Foxford Woolen Mills, decided that they would no longer take part in a Black Friday sale campaign. They felt it did not align with their brand ethos.

Foxford's reason for no longer doing Black Friday is to 'promote thoughtful consumption as they understand the environmental pressures facing us all in the coming years'.

Instead, Foxford Woollen Mills will be introducing a pop-up shop where they will sell pre-loved pieces in the hope of giving them a second life.

Another brand,?Mashu, sells contemporary handbags and is based in the UK. For Black Friday, instead of having a sale or purchase incentive, it is launching its 'CLEAR FRIDAY' campaign.

Its traceability roadmap of production will showcase the step-by-step process involved in making a handbag.

Customers can learn about each step of the production of their bags and understand the working conditions and pay of each touchpoint of production.

• Consumers have lost trust in Black Friday prices

New research released ahead of Black Friday from the Irish Competition and Consumer Protection Commission found that 61% of consumers don’t believe they are getting a bargain.

Those surveyed believed that the prices for Black Friday were not accurate in that they were more expensive so the reduction wasn’t as high as previously thought.

Retailers don’t need to price-drop products to drive sales if we look at driving quality rather than quantity for high-ticket products.

There are customers for every market; some consumers will only purchase at sales and others will purchase at full price.

Retailers need to decide what customers they want to attract. Those retailers that never have sales on core products, yet have high sales, are not losing out. This won't work for seasonal stock and that is where a strong pricing strategy should be planned into the calendar for the year ahead. Retailers that have a plan in place for this when possibly dealing with overstocks before end of year December 31st should not be an unplanned execution of selling off stocks with margins decimated it needs to be built into their Q3 and Q4 sales forecasting.

Looking at the cosmetic industry as an example, they rarely discount for example Chanel perfume is never on sale- does that model work? Yes, it does as the consumer knows that the product will not be on sale so will buy all year round. Sales can devalue a brand or product as the perception of that buyer is that the stock is not as valuable as previously thought.

Looking at your customer segments and the perception they have of your brand and products do they wait for reductions or are you positioned as a retailer that is priced high or competitive for what you are offering? When was the last time you carried out a customer survey to analyse this aspect of your business? Reviewing your sales, pricing and marketing strategy what is working well for your business and what areas do you think you could potentialize from more?

• Diluted

Black Friday has been diluted through the years with many consumers now not looking for an offering.

A survey of over 4,000 consumers was conducted by PwCs Christmas outlook for 2022. Of those respondents, only 20% are waiting to shop on Black Friday, and many consumers are spreading out their purchases this year.

With the looming costs of inflation, customer sentiment wasn’t on sales but on spreading their buying over the Christmas period weeks in the lead-up to Christmas.

Retailers don’t need to have reductions and sales to drive consumers to purchase their products the research revealed that many customers repeat buy at Christmas to retailers they trust not based on price.

Looking at how retailers can capitalise on this by having a no-fuss exchange policy on gifts purchased earlier in the Christmas period. Introducing gift receipts and exchanges to those early shoppers in October/November could drive sales growth on full-price lines.

It's important to have a strong after-sales policy in your store that is clear and transparent to consumers, as this can be forgotten at times, but it is a selling factor that most consumers decide on when buying high-ticket purchases.

In summary

Look at your retail sales strategy, product offering, ethos and brand. You can go far beyond reductions as a sales strategy when building your retail brand. Sales will always be around, but knowing why your brand is offering a sale and what that return on investment is long-term to the business is crucial to its survival.

If you have a Retail store and want to know how you can optimise the sales growth reach out to the team at the Training Academy.