Black Friday: Are Smaller Retailers Prepared?
Black Friday is a relatively new event. Brought over from the States a couple of years ago, it marks a day of retail extravaganza, where stores discount goods, in advance of Christmas.
It’s been about in the states since the late 1930s, traditionally following Thanksgiving. Amazon started offering Black Friday deals in the UK in 2010 and almost all retailers followed suit by 2014.
It has been responsible for setting retail sales records. Some estimates suggest this year might generate £1.07bn – a 32% increase on 2014.
Not All Good News for Retailers
On the face of it, it’s a great way to boost results pre-Christmas. Some have suggested it might be replacing Boxing Day as the “sale epicentre”. However, there’s a chance that some may come to regret participation; especially smaller retailers and boutique stores.
To begin with, any uplift in the last week in November needs to be balanced with loss in subsequent weeks. Shoppers are not necessarily buying more; instead they are often just forcing their sales through on one particular day rather than spreading their shopping across several weeks.
This doesn’t just impact upon the gain, it also impacts upon resources. Retailers like John Lewis are predicting a 20% gain on last year’s Black Friday and are staffing up in the physical store locations and logistics departments to meet demand. Easy enough for a large plc, but not quite so easy for a small retailer.
It’s not just staff they need to be concerned about over working, systems can’t be over worked either. Robust point of sale, inventory management and ecommerce is critical during peak retail times. Retailers who don’t offer a first rate online shopping experience stand to lose more than the value of the transaction.
Help at Hand
The key to mitigating the Black Friday pitfalls is really in predicting consumer interest. Data software company Tableau have polled over 200 senior retailers and their research shows that almost a quarter of UK retailers are not using data to effectively optimise for Black Friday.
This is especially true for small retailers, who are less likely to class Black Friday as successful according to the research.
A system like NetSuite can help you measure seasonal trends and predict annual growth. It will help you work out if your customers have a particular product bias in a particular week and allow you to plan accordingly. The inventory management system in NetSuite will suggest quantities required to meet demand at peak times. Whether you are just using a basic NetSuite ecommerce site like SiteBuilder, or whether you have the full SuiteCommerce, NetSuite publishes 99.98% uptime, so your system’s not likely to fail you during your peak period.
NetSuite also supports your understanding of customer profitability. You will know immediately the true cost of selling each item and then work out the maximum discount you should be applying.
NetSuite; it’s not just for Christmas. It will support you and help you to deliver outstanding customer service all year round.
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Written by Emma Stewart – Sales & Marketing Director at Cofficient and experienced online shopper.
To talk to someone about how you can use NetSuite in your retail business please get in touch