By Stefan Salzer, Partner and Managing Director at BCG South Africa
Black Friday has become a highly anticipated event for retailers and customers alike. Originally marked in the US to denote the beginning of the Christmas shopping season, retailers in countries all around the world now use the last Friday in November – 24 November this year – as an opportunity to get more customers through their doors or into their online shops by drastically reducing prices on selected merchandise.
South Africa is no exception to this global phenomenon. Supermarket chain Checkers has staked claim to being the first retailer to introduce the trend to South Africa in 2014 on a large scale. Since then, Black Friday has grown exponentially every year. Today, consumers have come to expect and, in fact, even demand that retailers offer competitive specials.
With several of the country’s favourite supermarkets and brands promising to offer up to 50 percent off selected merchandise, Black Friday 2017 will likely draw huge crowds, especially as South Africans’ disposable income continues to dwindle in the face of widespread economic uncertainty and few of us will say no to a deal.
Reduced customer spending has had a direct impact on retailers in the first half of this year, and the subsequent depressed operating environment and market pressure has meant that retailers require another big day to make sales – and they embrace Black Friday as that opportunity.
Because consumers typically spend more towards this time of year, even in a constrained climate when there is no spare disposable income, there is an opportunity for innovative retailers to tap into customers’ willingness to spend money and make purchases.
This requires proper preparation and an offering that is differentiated from the vast array of specials that competitors will undoubtedly also be providing.
For retailers offering special deals, whether it be in the bricks-and-mortar store or online, preparation for the biggest shopping day of the year takes three main forms: uniqueness, availability, and security.
- Retailers need to be able to demonstrate how unique their offering really is. There are a number of ways that they can differentiate themselves from their competition, for example: offering a “pre-shopping experience” for customers with loyalty cards and opening the doors or online specials to them before other customers, or tiering the specials according to loyalty and spend. Alternatively, retailers can offer a demonstration or activation the night before to attract shoppers.
- Stock levels and availability without doubt play an important part in Black Friday: customers need merchandise to buy. Retailers, as such, need to make sure there is enough stock by gradually building merchandise levels over at least three to four days before Black Friday itself.
- Security and staff levels are a key concern, as the day brings more feet into stores on to the online site. While increased foot traffic is mostly positive, it also poses security risks –retailers need to ensure that they are adequately prepared to guide the masses of shoppers through their store and not lose out on the security front. For retailers offering online shopping capabilities, it is critical to ensure that the most up-to-date security measures are in place in terms of encryption and protecting their customers’ personal information.
Retailers are not the only ones who should be concerned with deriving the most value from the experience. Customers looking to cash in on this year’s deals can make the most of Black Friday with the following tips:
- Do your research and know your deals to make sure you are getting a good one. With such a wide range of specials on offer, it can be easy to get swept up in the moment by what seems to be the deal of a lifetime. As the old aphorism goes, though: if it seems too good to be true, it probably is. Research deals and know the normal prices of items of interest before heading to the shops will help shoppers get the best deal possible.
- Know before you go: make a shopping list. Having a list will help shoppers focus on what they actually need and reduce the risk of impulse buys that create regret at home.
- Stick to your budget. Shoppers should ideally have a budget firmly in mind when they navigate Black Friday specials. It is important for shoppers to realise that it is only one day of the year, so overspending can have negative consequences, especially leading up to the festive season. Deciding on a budget and sticking to it will prevent excessive spending. Thinking about the Black Friday budget in connection with the Christmas budget is important to avoid spending more than what is affordable.
- Shop around. Just as it is critical to carry out research and determine what is on their shopping lists, shoppers shouldn’t take the first deal they see. Looking at other options means consumers can find the best value.
- Go early and wear comfortable shoes. Retailers are forecasting record numbers of shoppers, so it is a good idea for anyone planning to brave the crowds and go shopping on Black Friday to go as early as possible and wear sturdy shoes suitable for queueing.
- Enjoy the day! Retailers put their best staff and best deals out, and shopping malls bring on much entertainment – so shoppers should enjoy the day!
What has become clearly evident is that the Black Friday trend only continues to gain in popularity – ultimately meaning that retailers will need to be able to implement pioneering ideas to win over customers as their demand for real value increases.