Swift Electrical’s commercial director Malcolm Scott gives his thoughts on whether Black Friday has any real benefits for KBB retailers
Does the great Black Friday generate new business or is it simply another way for retailers to give away margin?
It all started in the USA. On the day after the Thanksgiving bank holiday, American retailers extended their opening hours in a bid to grab as much of the pre-Christmas trade as possible.
While it was historically largely an in-store event, with major stores offering while-stocks-last deals, more recently, internet retailers and multichannel retailers have also actively participated.
Black Friday fell on November 25 this year, just as this issue was going to press. With numbers still to be calculated, it was forecast that online sales would top £3.15 billion this November – 6% up on last year – with overall retail sales expected to exceed last year’s figure of £32.2bn by around 4%.
Bricks-and-mortar and online retailers have already reported ‘sluggish’ sales at the start of November, as consumers postponed non-essential, high-ticket sales in the hope of picking up a Black Friday bargain. This causes a huge logistical bottleneck in the seven days after it, as retailers attempt to deliver two or three weeks of postponed sales in a single week.
Margins are severely eroded during the period, as retailers compete to have the best offer. However, retailers must participate to avoid losing ground to competitors.
The smart operators don’t attempt to compete right across their product offering, but rather introduce offers that generate incremental sales. However you look at it, no established business with a regular flow of customers actually benefits from a trading period in November where very little is sold or delivered until the last week of the month, when sales break all records.
Black Friday does generate huge consumer interest and has the potential to produce footfall into traditional retail shops. So how can KBB studios participate in the Black Friday bun fight?
The simple answer is, it depends how busy you already are. Those KBB showrooms that already have full order books are probably better off simply ignoring the day. But for studios that do have the capacity to fit projects before the year-end, it may be worth joining in, while multiple-outlet retailers will always be active participants.
The most obvious way to participate is with offers such as half-price worktops and a free dishwasher when you buy a complete kitchen. This produces headline-grabbing offers without digging too far into the bottom line. I’ve noticed a few simple posters in windows and banners on websites that should help convey to consumers that the studio is part of the modern retail scene and is participating in the biggest sales day of the year.
A few studios planned open weekends with tea and cakes and invitations to existing consumers, so that they can come along and see what’s new.
You don’t need to be the cheapest. You just need to have something different to say and make some noise to attract consumers.