Another year is almost over and Black Friday is here once again. As business owners, it is likely that you will know of Black Friday, one of the biggest days of the year for the retail industry. Originally from America, this exciting and extremely popular shopping event has travelled across the pond and UK shoppers now like to get in on the action.
Every year on Black Friday, hundreds of thousands of shoppers take to the UK high streets, to stock up on all kinds of products for a fraction of their usual price. Last year, £1.1 billion was spent by consumers, an increase on the £810 million from the year before.
However, with the splurge in spending comes some problems for businesses. Last year, leading retailers including John Lewis and Argos suffered online service problems due to the sheer amount of traffic on their websites.
That’s not the only problem that businesses can face on Black Friday, as some actually incur losses due to the discounts they provide their customers. Is your business ready for Black Friday and what could you do to level out any losses you might fall victim to?
Without a wide range of products, businesses could incur losses
One way in which many leading retailers succeed on Black Friday is through discounting specific products on their shelves. Every year, high quality and costly products including TVs and games consoles are drastically discounted to lure consumers in and to make plenty of sales.
Retailers tend to benefit from these discounts when customers also buy some of their many other products that are either kept at their normal price, or advertised at a higher price. The discounted products work as a temptation, only to have the customer actually spend more than they normally would.
This is a technique for those businesses with plenty of products to offer, but what about those with a limited selection? By simply discounting the prices of your products, your business is likely to incur a loss on Black Friday, which could lead to further implications in the days and months after.
Consumers are now much more aware and plan ahead of time
While at one time the first few weeks of December were incredibly busy for retailers, these days consumers are much more switched on when it comes to their Christmas shopping. As such, the rush for gift buying tends to come much earlier than it used to, with plenty of shoppers starting the process as early as October.
In the past retailers were able to recoup any losses made on Black Friday through the hustle and bustle of last minute Christmas shopping in the days and weeks after. Now, sales are much lower in the aftermath than they once were and so it’s much harder to regain profits after Black Friday than it used to be.
While it’s incredibly tempting for retailers to get involved with Black Friday, it’s crucial to consider the points made above before joining in, especially if your business has seen financial troubles recently.