Is Black Friday Always a Good Deal?
Black Friday is often considered one of the best days for sales across the US. Numerous people will queue in line to get the best deals on the day. But are Black Friday sales the best deal for businesses? Do they create an expectation from shoppers? Could these heavy discounts ruin the reputations of brands? In this article, we look at whether Black Friday (and also Cyber Monday) is good for your business.
When is Black Friday?
Black Friday is the last Friday in November after Thanksgiving. It’s traditionally the start of the Christmas shopping period and is known throughout the US and the world as a day when shops offer the best deals to encourage shoppers into the store.
Black Friday stores can sometimes open early to offer deals to eager shoppers and increase the number of trading hours. In recent years, Black Friday has extended into the weekend and onto the Monday, when Cyber Monday is launched, which are big online sales from brands.
Is Black Friday Good for Business?
There are numerous pros and cons to discounts, and Black Friday is probably one of the biggest discount periods throughout the calendar. For businesses, it is a mixed bag. The day is a great opportunity to move excess stock at a low cost to make room for festive merchandise.
And certainly, numerous businesses see benefits in Black Friday. According to a survey in 2021, 83% of small businesses were planning on offering Black Friday deals. However, that doesn’t mean that they are benefiting financially from them.
Research from the UK demonstrates how US businesses might be affected by Black Friday. Argos, for example, found that their 2014 Black Friday sale saw a 45% jump in sales, but had only a 0.1% improvement in revenue. As a result, shares in the company fell.
And these aren’t the only ones that suffered during Black Friday sales. Numerous businesses suffer significantly from the after-effects of the deal. Some of the issues include:
- Customers returning impulse purchases after the event.
- Some customers sell discounted goods at a higher price.
- Numerous customers have complained of the negative experience on the day.
- Brand reputation can suffer significantly from Black Friday deals.
- Staff can become exhausted and feel undervalued during the sales.
Are There Other Options for Black Friday?
Other options to discounting are available for Black Friday. Some brands, like Google, Ikea, and Everlane don’t partake in the day. Instead, they run their own campaigns where they get customers to complete other tasks like selling secondhand goods back to the store or other customers.
And some of these companies get huge media attention from the different approaches that they have for the day. As a result, after Black Friday, they gain more than they lose on the day.
Another option is to remember that long-term customers are more profitable and successful than short-term customers. Using sales only encourages disloyal customers, and about 1 in 3 purchases on Black Friday are returned - creating a cash flow headache.
Final Word: Does This Mean That Black Friday Is Useless?
Not necessarily. But Black Friday shouldn’t be about massive sales. Instead, it should be about reasonable offers that offer customers and retailers the best deals. Create a business plan that allows for some discounts but doesn’t encourage bad sales. Try to move stock that is no longer required or will only hamper festive period stock. And finally, it is never unreasonable to host some items on discount and not others.
And if you’re trying to get more trust with an audience, remember that incorporating your business or creating an LLC is going to be much more valuable than sales. Customers are more likely to purchase from a company that is incorporated than some other forms of business entity. So you should learn how to incorporate your business today.