As I write this the rush towards Christmas seems to have already begun. Back when I started in the sports trade, in the 1990’s, Christmas trade was a big deal but driven by general demand, not by heavy discounting.
However, the adoption of Black Friday and the subsequent hysteria during the early 2000s has resulted in a desire to prolongate this trading period and to introduce heavy promotional activity.
Social Media has been the facilitator of this change with most brands and retailers choosing a series of focal points from October through December on which to hang new product launches, promotions and increased activity.
These days kick-off is Halloween. I don’t mean October 31. I mean (at least) one week before.
Activity then rolls seamlessly into Bonfire Night and then, after a slight lull, Black Friday and Cyber Monday (again the result of trying to extend Black Friday from one day to a long weekend).
Once the hysteria has reached boiling point we are then reminded of last ship dates to guarantee Christmas delivery and, depending on the success of trade, the possibility of Christmas sales (that used to historically start on Boxing Day) starting even before Christmas!
Black Friday alone has become such a fixture in the retail calendar that, according to the most recent predictions from Retail Week, Black Friday is set to break the £2 billion barrier with 33.5 per cent of consumers planning to buy something - but where, when and what is in the retailers’ hands as they take back the reins of this pre-Christmas mega sale.
The consumer is now in control
In the past, promotions were driven by the need to shift end of season stock, as a reaction to an unforeseen sales slowdown, or around key events such as Mother’s Day or Christmas. Mike Watkins, Head of Retailer and Business Insight at Nielsen UK, emphasised that “the challenge we have is that shoppers’ no longer think in this way.”
The recession and discounting trends within the sector have fundamentally changed the consumers shop. Research from Conlumino reveals that 75 per cent of consumers would rarely buy certain products at full price, and 62 per cent say they wait to buy until a product is on offer or discounted.
In today’s digitally enabled world consumers can shop for anything, anytime from anywhere. No longer are retailers, distributors or brands in control - it is the consumer that is firmly in the driving seat. “Put simply,” said Mike Watkins, Head of Retailer and Business Insight at Nielsen UK. “We should now consider ripping up the old rule books for promotional strategy.” As such, retailers need to find a way to play their cards better to make the most of this new consumer mind-set.
This prolongation of the promotional period has certainly been a retailer and brand driven reaction not least to try and “spread the load”. On 2014, such was the Black Friday phenomenum that many retailers struggled to cope with the massive business upsurge during one day leading to logistics, IT, customer care and wider general business issues.
Of course the major activity is being driven by the major players, however Black Friday generates additional footfall in most town centres and online and there is no reason why the smaller independent sports retailer cannot take advantage of this new sales opportunity.
According to Dominic Allon, Europe vice president and managing director of Intuit QuickBooks there are five key things that owners of smaller retail organisations should consider when preparing their business for their Halloween-to-Black- Friday-to-Christmas activity.
1. Giving the right discount
Shop owners must be smart with the discounts they offer and make sure they are still able to make a profit while remaining competitive.
2. Buy first, return later
Smaller retail owners must think beyond the Black Friday weekend and factor in the chance of returns into their finances, otherwise they could fall short when predicting their profit and loss.
3. Buying stock is a balancing act
Buying from suppliers may be costly, and on normal days when the shop isn’t as busy, having two of every item in stock may just be enough. However, more shoppers are expected on the high street during this bumper sales weekend, so having enough stock in store to cover extra sales is crucial.
Use data from previous years to understand what is likely to sell, and buy enough stock to keep customers happy. But, do bear in mind that going overboard and not selling risks problems for your cash flow.
4. Having to rely on others
Unlike larger retailers, most small business owners do not benefit from having their very own logistics service that can adapt to the demand over the busy period. Instead, retail owners must rely on external services that are already busy with multiple other suppliers. Small retailers must offer customers a guaranteed delivery time that aligns with what their courier service can offer. Introducing a slightly longer delivery time over the busy period could help with the demand and keep your customers satisfied.
5. Plan, predict and manage
No matter how big a business is, the key to success over the Black Friday weekend is preparing for every eventuality. It should not be weeks in the planning but months, and failing to have a complete overview of your finances could stop you in your tracks. Having a holistic view of your finances that monitors all money coming in and going out is crucial to surviving the weekend of extra sales and extra returns. If you play your cards right and plan for every outcome, your small retailing business can reap all the success of this long weekend of serious spending.
Alongside the above activity, make sure that your social media plan is in place for the key dates and use these focal points to drive business interest and to engage with existing and potential customers.
Remember – you might engage in October and convert in December, however if you do not have the initial engagement then the conversion becomes harder.