In short, Black Friday is the first Friday following Thanksgiving in the United States. It’s commonly known as the first day of the Christmas sales season and, while the holiday itself is an American invention, it has steadily become a frenzied day of discount shopping here in Australia.
Black Friday has quickly become a shopping phenomenon; in 2020, just 4% of Australians had never heard it. Every year, millions of dollars are spent in shopping centres, high streets and — increasingly — local shops. In fact, last year’s total retail turnover rose by 13.3% in November, compared to the year prior. There’s no denying that this well-known sales event is a drawcard for shoppers.
One word: discounts. Everyone loves a bargain, especially when Santa lists are being drawn up.
In fact, PayPal’s most recent EOFY Sales Trends Report shows the hunt for a bargain is increasingly becoming part of the human condition. One of the reasons Black Friday is becoming increasingly popular is because customers are growing less and less willing to pay full price. PayPal’s EOFY Sales Trends Report this year revealed that almost half (46%) of all Australians say they have watched an item they wanted and waited until it went on sale before buying online.
This is why businesses need to invest in brand building and storytelling – so they can deliver on value while still enjoying sustainable year-round sales without compromising on profit. If they can get their strategy right, brands can carve out a greater slice of market share, capitalising on the ‘revenge spending’ phenomenon gripping the country.
The Black Friday sales are commonly considered the kick-off to the end of year sale season. Traditionally slated for the end of November, it’s followed by Cyber Monday the following week, before then ushering in a month of Christmas and Boxing Day sales only days later.
In 2021, Black Friday will be on November 26. This year, however, the date aligns with the easing of retail restrictions across the country. While it’s been a trying two years, The Drum reports that Australians have stockpiled more than $140 million — money that’s expected to be injected into the economy through shopping, dining and travel.
This makes Black Friday the perfect opportunity to cash in on consumers’ appetite to spend.
Like all sales events, participating in Black Friday is not compulsory for small businesses. However, it has become increasingly popular in Australia; many consumers hold off purchasing until the sales hit, ensuring they’ll bag a bargain.
This brings us to an important point: many savvy shoppers wait for a better price. This explains why 30% of all retail sales occur between Black Friday and Christmas — because consumers are essentially promised a good deal.
Participating in an event like Black Friday could convert a number of purchasers who are on the fence or deterred by high prices. And, if you invest in your marketing, you could also attract a new customer base during the sales event.
Therefore, when it comes to participating in Black Friday, the question you should ask yourself is, “will it pay to miss out on this opportunity?”.
As we’ve already established, when consumers go shopping on Black Friday, they’re out for a deal. Yet at the same time, if it isn’t an equally lucrative opportunity for businesses, then merchants wouldn’t be participating.
This year in particular, shoppers are keen to spend their money locally and reinvest in small businesses that have suffered during the pandemic. In fact, more than 50% intend to support local businesses with their dollars.
If you do decide to participate in Black Friday, here are six tips to make sure it's a success.
Some of the most effective Black Friday campaigns advertise either ‘up to X% off everything’ or ‘spend and save’. Both promotional formats drive purchases — one by promising a discount across the entire store, while the other rewards higher spending.
Which one works for you depends on your products and target customers. A blanket discount can entice passersby into your store, in the hopes of nabbing a bargain. Spend and save sales are limited-time sales that work by persuading customers to purchase more to save more, and are typically used by high-end retailers.
Once you’ve decided your offer, it’s recommended that you shout it from the rooftops (or at the very least, on all of your social media accounts). That way, you’re making the customer journey more seamless, as well as profiting from the SEO benefits.
The last thing you want to do is lose money from Black Friday sales. Some business owners fall into the trap of ‘slashing’ prices to gain a bigger share of sales spending. It’s only until they count their pennies later that they realise they’d all but removed the product margins.
The average savings on Black Friday sales are 37%. That said, you should refer back to your own business plan to calculate the sweet spot between consumer appeal and profitability for your specific circumstances.
Sales can be just as valuable for merchants as they are for shoppers. If you’re offering big discounts, consider introducing a ‘subscribe to save’ strategy that collects customers’ contact details in order to unlock the discount. It could be something as simple as a newsletter sign-up at checkout. This allows you to market to them in the long-run with exclusive offers, sales events and new releases, potentially converting them into repeat purchasers or even loyal customers and brand advocates.
It’s critical that you communicate the benefit of signing up clearly — both in-store and on your socials — to encourage subscriptions.
In order to leverage the sales frenzy and maximise your Black Friday revenue, consider opening your doors earlier than usual. In 2020, Deloitte reported that 36% of customers planned to visit stores between midnight and 6am, and 46% between 7am and 10am. So, if you choose to open at 10am, there’s a sizeable chunk of spending you could be missing out on.
Should you decide to open outside of your regular hours, you need to get the word out that your Black Friday sales will be extending store hours to really make it worth your while. This includes updating your socials, Google My Business profile, and website. You might even like to consider investing in Facebook ads.
While Black Friday can be hugely profitable, it can also be hugely stressful. Long queues and extended waiting times are likely to create anxiety for some shoppers as we continue to navigate our way through the current pandemic — which is why it pays to prepare your store early, and ensure staff are comfortable enforcing social distancing and store capacities to ensure your shoppers feel comfortable and confident.
Another way to trim lines and wait time is with a wireless EFTPOS terminal that allows you to accept payments at multiple points throughout the store. Zeller Terminal can be picked up and taken wherever your customer is, allowing you to streamline transactions and disperse queues. Plus, you can use it to accept card-not-present payments over the phone — negating the need for people to enter the store during your Black Friday altogether, leaving space for someone else to squeeze in.
Some small businesses exclusively offer discounts during peak sales periods, like Black Friday, which trains consumers to only ever buy at specific times of the year. These businesses are also likely to only invest in advertising during these periods — which means they’re competing against countless other brand messages, leading to low bang for their advertising buck. And then there’s the risk of having a products’ recommended retail price being considered ‘over-priced’, because it’s always on sale.
For any of the above reasons, you may decide that Black Friday isn’t for you. Fortunately, it’s only the beginning of the sales season — which means there are countless opportunities to cash in on Australians’ urge to splurge in the weeks ahead.
Now that you understand the wealth of opportunity that Black Friday presents, it’s time to optimise all other aspects of your business. Sign up to our Business Blog to cash in on valuable insights sent straight to your inbox.