Why Retailers Shouldn't Be Focused on Black Friday
Don't quit reading just yet. I haven't lost my mind.
While Black Friday can be one of the most profitable days of the year for retailers, relying too much on this crazy day of shopping to generate profits may not be the best approach.
Disillusioned by ridiculously long lines, overnight camping in chilly parking lots, and outrageously early sales that infringe on Thanksgiving, many shoppers have given up. They instead choose to stay home, relax with family, and watch football rather than deal with the stress associated with Black Friday shopping.
Consumers look for deals that continue throughout the month of December; they don't want to rely on Black Friday to accommodate all of their shopping needs. As a retailer, your job is to give them what they want.
In order to make the most of the entire holiday shopping season, here are a few tips:
1. Utilize retail technology. Modern retailers know that it's necessary to implement a variety of technology tools to enhance a consumer's shopping experience. Consumers have come to expect bargains on Black Friday; use the tools at your disposal to keep them coming back for more promotions and deals! Reports generated using retail technology enable you to find stock items that are slow movers or poor sellers. Use this information to make strategic markdowns that entice shoppers to enter your store and give those full-priced items another glance.
2. Use historical sales data. Hopefully you collected sales data from last year's holiday season. (If not, we should talk.) By analyzing sales data and customer data from prior seasons, you can begin to see trends that reveal what sells, at what point in the season, at what price. For big-ticket items, for example, you might find that pushing a promotion earlier in the shopping season moves more product, while for smaller stocking-stuffer items, sales tend to increase around Dec. 23. Closely monitor data throughout the holiday shopping season in order to make smarter marketing decisions and move product quickly and efficiently.
3. Personalize deals for your customers. On Black Friday, that $199 television is up for grabs for anyone who's willing to leave Thanksgiving dinner early, camp out overnight in often freezing temperatures, and wake up to stand in line at 5 a.m. That may not resonate with your customer base. Instead of buying into these extreme measures, use technology to analyze customer spending history, create coupons, and distribute them via email or direct mail.
For example, generate a list of your top 300 customers by dollar amount purchased in the past year, then send them tiered coupons, offering $5, $10 or $20 off of their in-store purchase, depending on how much they've spent. Getting these customers into your store overcomes the major barrier to making a sale. If you price your items correctly and create your coupons proportionately, customers will spend far more in-store than the amount on the coupon.
4. Don't forget loyalty! The holidays are a great time to get shoppers in the door for the first time. When a shopper enters your store for the first time, make sure to sign him/her up for your frequent buyer/loyalty program to ensure they continue to receive information on promotions and sales after the holidays. If this first interaction happens on Black Friday, you have the rest of the holiday season to keep that customer coming back to capitalize on later sales and promotions.
What other tips do you have for making the most of the holiday shopping season? Let me know by posting a comment below.
Jason Becker is the COO of RICS Software, a web-based retail point-of-sale system and management solution.