Black Friday: Cannibalisation or Propagation?

I worked in marketing for a leading hospitality business for many years so Black Friday is a term that I have been familiar with for some time. Back then it was an industry term to describe the last Friday before Christmas when typically, we would see the most Christmas party bookings. Since then, much like Halloween and Baby Showers we have taken the lead from our American counterparts. Black Friday has become a day when retailers heavily discount their products to encourage consumers to purchase, giving businesses a much needed pre-Christmas boost. We’ve even gone one step further with Cyber Monday. But does Black Friday actually boost businesses sales or are we simply cannibalising existing sales? In my latest blog I’ll take a look at the benefits of Black Friday vs the potential pitfalls.

Black Friday this year will fall on Friday the 26th of November. So, if you’re looking to capitalise on this day, you’ve not got much time to get your ducks lined up. Last year we spent an estimated £6 billion on Black Friday and Cyber Monday. Forecasts suggest that this year spending will be down by 6% with the average Brit set to spend £275 (finder.com). So why the sudden downturn in projected sales? The easing of lockdown and vaccine rollout may hold the key to the predicted decline in sales. With life almost returning to pre-pandemic status consumers have more demands on their income. Money is getting spent on socialising, commuting and non-essentials. Concerns over supply chains may also have some bearing on consumer behaviour this year.

So, what does this all mean for your business should you engage in Black Friday promotions or hold your nerve and maintain your retail prices. Black Friday has many pros and cons.

Pros

1.      An increase in traffic and sales

Consumers have become savvier due to Black Friday and Cyber Monday and are actively seeking out bargains during this period. Black Friday and Cyber Monday focuses shoppers on a set period of time meaning more sales and traffic for your business.

2.      A chance to offload stock prior to Christmas

Black Friday is a great opportunity to clear older stock and introduce new lines prior to the Christmas rush. This is particularly key if your business is in electronics or fashion.

3.      New customer attainment

Finding new customers can be tricky and costly. Black Friday and Cyber Monday give you an opportunity to get in front of new customers who you can then retain if their experience is positive then they will come back to you.

4.      Incremental sales

Customers are well trained and are keen to purchase around Black Friday. They may be attracted to your business due to discounts however they may go on to purchase full price items.

5.      Fulfilment of orders prior to Christmas

With ongoing issues with delivery getting sales in early may prove beneficial to retailers as you can ensure customers receive their items in good time prior to Christmas.

Cons

1.      Pressure to discount

As I’ve already mentioned customers have grown to expect discounts around Black Friday and Cyber Monday. This may be difficult for some retailers to achieve.

2.      Negative impact on sales margins

Although sales are likely to go up, profits will go down. You need to consider whether offering discounts is actually commercially viable. If not then you may wish to withdraw from offering deductions however, will your competitors be offering a promotion?

3.      Increase in returns

Black Friday can encourage impulse purchases, the problem is whether customers will then return the items.

4.      Overcrowded competitive marketplace

Lots of retailers will be talking about Black Friday so getting your voice heard above all your competition can be problematic.

5.      Delayed sales as customers are waiting for discounts

We’ve all grown to expect discount around Black Friday so teasing customers to purchase outside of this period will be tough. Its likely that you will see a drop in sales running up to Black Friday which will have a negative influence on your bottom line.

The Black Friday and Cyber Monday phenomenon looks like its here to stay despite the difficulties it poses to retailers. Its important to consider all the pros and cons before embarking on discounting your products. The impact on margins is easier for a larger retailer to absorb but for smaller businesses it may prove challenging. But equally the opportunity to acquire new customers during this period is beneficial. The key to success is ensuring that promotions are carefully managed to ensure that margins are protected whilst taking advantage of the increase in customers looking for a bargain.

If you’d like to talk to me about your marketing prior to the run up to Christmas or anything else, feel free to get in touch kiesha@iconmarketingcomunications.co.uk 07979940526.

Media Neutrality and Ad Avoidance – ‘A local shop for local people’

I started working in advertising in the early noughties. Back then the world of media was a very different landscape. There were a plethora of local papers covering every inch of the UK the same could be said for radio and TV did not have the technology to pause and invariably fast forward through adverts not to mention the advent of subscription services such as Netflix which are totally ad free. Back in those halcyon days reaching the right audience for your client was like shooting fish in a barrel. Of course our recommendations were always supported by research but we almost always instinctively knew which media would achieve the best results for our client’s.

The effects of the recession have had irreparable damage on the world of media. The ad to content ratio in most media is so far out of kilter that consumers are switching off their local radio station and where there is still one prevalent barely reading their ‘local’ newspaper. Where I live we used to receive a free weekly local newspaper which reported on local news. This reminds me of the League of Gentlemen

We still receive a ‘local’ newspaper but unfortunately this only carries a handful of truly local news stories the rest is from further a-field. I don’t envy the job of local newspaper journalists now. Less than 20 years ago we had an office in our town for our local newspaper journalists lived in the area and were passionate about reporting local news. So where do you turn to find out what is really happening in your local area?

For me personally it’s the internet, there are several local online outlets within my local area. But in the main these new media offerings are not run by professional journalists but anyone who has bought a URL specific to the area in question. I’ve had many a heated conversation with the ‘editors’ of these publications who will not accept a press release because they ‘don’t work for free’. Whilst I have sympathy for these local entrepreneur’s news should be treated as just that. Not news for the highest bidder. These local websites and to a certain extent magazines are not regulated in the same way that traditional media is so anyone can create their own outlet. I sometimes question the motivation of such publications do they really want to deliver the best news for our area?

The problem with our now fragmented media is the lack of sense of community. With our inability to unite people through media comes the lack of ability to support the local community. A new business opening, charitable cause or local event is increasingly difficult to promote. Advertisers and PR consultants need to work extra hard to reach their audience and in many cases are operating on smaller budgets. Is it any wonder so many local businesses struggle to thrive? Once again I look to Singapore they still have one main English language paper the Straits Times/Sunday Times with a daily average circulation of 393,000 you can ensure that your advert is reaching 8% of the population. This is all the more impressive when you take into account that “English is the native language of 32% of Singaporeans…” (Source). 

I was delighted when Jazz FM returned to the airwaves last year the ad to content ratio is spot on and I’ve found the adverts to be informative like the recent campaign by the FSA something I’m genuinely interested in. That’s the beauty of well-planned media selections. If you take the time to investigate the correct media outlet for your audience, you can still achieve sensational results.

At Icon Marketing Communications we offer media neutral, tailored solutions to help our client’s realise their objectives. Yes, the task is much harder but not impossible. Recommendations are developed based on clients’ goals, research and of cause budgets. Although the media landscape can at times seem bleak there are still many ways to reach out to your target audience. If you would like to talk about realising your objectives feel free to get in touch. kiesha@iconmarketingcommunications.co.uk or 01625 533102.