The marketing promotion “Black Friday” has become a transatlantic marketing phenomenon. But just because something gets a lot of hype, doesn’t necessarily mean it is right for your business. In this article we take a look at the marketing monster that is Black Friday. Here we give you some ways to evaluate whether it may be right for you.
What is a Black Friday marketing promotion?
Black Friday, like with many events in the promotional calendar, originated in the States, as early as 1952. This is surprising because, on UK shores, it has only really reached prominence in the last 10 years. Black Friday has always been held the day after Thanksgiving (which is always the fourth Thursday of November) to officially celebrate the first day of the Christmas shopping season (which also seems to get earlier every year). This was because in the US many people traditionally had this Friday off work.
How did this marketing promotion come to the UK?
It is called “Black Friday” because traditionally it represents the time of the year when US retailers moved financially out of the red, and into the black (i.e. profit). The growth in internet retailing is what originally brought Black Friday to these shores, with Amazon thought to the be one of the first retailers to start offering “Black Friday” deals.
Today, all British supermarkets, with the exception of Marks & Spencer, and the majority of high street retailers offer deals on Black Friday. What’s more, in the last 3 years the “Black Friday” promotional mania seems to have ascended into non-retail businesses and even into the world of B2B services.
So with so much hype and noise around Black Friday (remember the coverage it received on BBC news), should you be considering Black Friday as a bona-fide marketing promotion for your business. Should it be part of your promotional marketing strategy?
Why you may want to consider this marketing promotion campaign?
Love it or hate it, there are many reasons why brands and customer run a Black Friday marketing promotion.
– Creates a buzz in store
There is no doubt the Black Friday promotions do get people into retail stores. However, with an increasing number of people preferring to browse the deals from the comfort of their own home this is becoming less beneficial. Typically, a store would have a select number of items at ridiculously low prices and would be relying on cross selling other items whilst they were there. This happens less frequently online, although the “you may also like” function of many websites does help to partially overcome this.
– Pull new customers in
Any marketing promotion campaign usually has this ultimate aim of selling more products to more customers. This naturally means pulling in new customers that would not otherwise have purchased (and their potential long-term repeat value). The downside to doing this is that you are pulling in new customers at a time of heightened demand. So, this begs the question of whether their experience would fairly reflect your typical “brand experience”.
– Shift slower selling items or excess stock
One of the big benefits of Black Friday is that it provides a platform for businesses to select which products or services are being discounted. Typically, you would not run an across the board price promotion. This, therefore, provides a perfect opportunity to get rid of SKU’s or stock which is slow moving. It may be a chance to ultimately discontinue certain lines permanently.
– Generate publicity
Probably the most common reason that brands run Black Friday promotion is to raise the profile of their brands, particularly in the all-important run-up to Christmas. A promotional campaign which shows huge discounts always generates awareness and often leads to heightened social coverage in terms of PR, shares and likes. It can become the central fulcrum to a much wider integrated campaign.
Why you may want to avoid a Black Friday marketing promotion campaign?
So, we have explored the benefits of running a Black Friday campaign. On the face of it there are a number of marketing reasons why you may want to consider it. However, beware, there are also a multitude of reasons why it may be preferable to avoid.
– Price discounting could damage your brand
This will largely depend on your market positioning. If you are in the stack them high, sell the cheap volume model, then it may be perfect for you. Even if you hold a mid-market position in your particular field, it could still bring a multitude of benefits. However, if your market position is in the quality, premium or luxury end of the market, then a Black Friday style promotion may only devalue the brand equity you have built up over the years. Those typically regarded as the highest quality brand in their field never run price discount promotions, because they don’t need to.
– Negative customer service impact
What Black Friday has managed to create is 24 hours (or more recently weekends) of chaos for those companies running such campaigns. Unless you have the capacity to deal with a dramatic uplift in customers and enquiries then avoid it. Asda famously stepped away from running true Black Friday promotions due to the negative impact that resulted in its 2014 campaign in terms of in-store experience (customers fighting in-store over discounted TVs). So, before you jump in and commit to it, consider the wider impact to the company, the brand and your customer experience.
– Impact on margins
Any promotional campaign centred around a “limited time “offer is relinquishing margin, in favour of volume. Usually one would offset the other. However, be careful with Black Friday promotions because there is a customer expectation that the price discount during a Black Friday marketing promotion is significant. Therefore a 10% or 20% reduction won’t cut it with customers. They will be expecting 50% + on a Black Friday discount, otherwise it is just not newsworthy, and their attention will be elsewhere. With this in mind, you need to ensure that there is enough margin in the product, or you have the ability to cross-sell other products at a considerably higher margin to make the campaign work from a return on investment perspective. You also do have to consider the lifetime value of any new client attracted. M&S are an example of a company who no longer offer special discounts on this day, with CEO Steve Rowe stating that all it does is “suck sales forward” (at lower margin).
– Being heard above the Marketing noise
It used to be a one-day marketing promotion. Now, every year in the UK it is getting extended, starting mid-week and running for seven days. However, although this stretching out of Black Friday has helped with the window of promotional opportunity it is still a major issue. Why would you want to be running one of your biggest price discounting promotions at exactly the same time as all of your competitors. Will your promotion even be heard amongst all of the marketing noise? Why not focus your campaign at a different time of year when this is less activity and your media reach would be a lot more economical (think in terms of supply and demand).
So, we have tried to provide a balanced view here of the pros and cons of Black Friday. It should have given you some things to consider when evaluating whether Black Friday is the right marketing promotion for your business. Now, what about Cyber Monday……
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