Stateside it’s the biggest shopping day of the year. In the UK Black Friday is a bit more of a novelty, with retailers divided over how far to embrace the imported tradition.
Many small business owners are still wondering whether to leave the annual day of pre-Christmas discounts to the big boys, or if it’s a game that they can play too.
Vanessa Peters, Business Doctor for Sussex East, believes small enterprises have much to gain from taking part, but that they need to approach any promotions with caution.
She says: “Black Friday doesn’t have to be a big operator initiative but SMEs need to be judicious in their approach. They don’t have the financial bandwidth of the big players, so positioning their Black Friday offering is crucial. It needs careful planning.
“Selecting the Black Friday deal is relatively easy but, having made the selection, there are three key questions to be answered. Firstly, what do we think the take-up will be? Secondly will we be able to meet demand if take-up exceeds our projections? And thirdly, how will we feel if take up does not match our expectations?”
Chris Sowerby, Business Doctor for Crawley and Redhill, adds that there is scope for owners of SMEs in all sectors to get involved, not just for B2C operators.
“The profile of Black Friday now makes it an opportunity for SME service providers as well as product-based companies to benefit, ” he says.
“Due to the vast sums of money spent by the big companies on promotion of this event, SMEs need to find creative ways of raising their potential customers’ awareness of their deals. Crafting unusual or different approaches to constructing their offering is one way to create marketable material for social media that will create a buzz.”
Leicestershire Business Doctor Russell Grant agrees.
“Consumers will be looking for deals across the market,” he says. “Many larger operators have extended their Black Friday deals to last for many days, or even a full week, and it appears that in doing so, some have watered down the strength of the offers.
“SMEs could take advantage of this by sticking to really great deals that are for one day only.”
So what are the potential pitfalls – and solutions – for an SME that wants to give Black Friday a whirl?
“The biggest problem, assuming you don’t sell product at a loss, could be managing inventory levels and forecasting demand,” says Russell. “If this is a concern, see if you can get your suppliers to offer sale or return agreements.
“Ask your suppliers to support you with your deal for the day. They will probably be looking for volume at this time of year and may have extra funds to support Black Friday activity.
“They may be willing to give you a deal because their investment is limited to your sales on this one day. To get the very best deal, you may have to accept that they will provide the extra discount on your sales out on that day, rather than everything you buy in.”
“SMEs must set clear boundaries for the Black Friday offer,” says Vanessa, “and do serious contingency planning. A well-positioned offer to a smaller number of customers, with good PR to follow, is always going to be more successful than a larger scale effort that is badly delivered”.
Ian Roberts, Business Doctor for Oxford, agrees. “Be sure that when it’s gone, its gone with no exceptions,” he stresses.
“Offer a limited number of products or services to help you attract attention, but not so many that it would hurt your business”.