Lots of retailers are opting out of Black Friday this year, believing there is little or no value in the shopping bonanza. That might be true, but only because many of them have been going about it all wrong.
And in some ways, that’s true. There are less retailers taking part, both in the UK and the US this year. BestBlackFriday.com, a site that lists stores that are offering Black Friday deals, has stated that more stores than ever are not taking part.
So, are retailers starting to believe that there is no value in participating? Maybe. But if they are, then they’re looking at the whole concept from the wrong direction.
In the interests of retailers
Many retailers were using the event to try to clear items that hadn’t sold well or that they had too much stock of.
The controversy that surrounds Black Friday sprouts from the idea that there are better deals to be had at other times throughout the year. What was once the chance for retailers to offer unbelievably cheap prices on products, which during the rest of the year are far too expensive, instead became an opportunity for brands to flog the products that no one was buying.
Many retailers are using the event to try to clear items that haven’t sold well or that they have too much stock of. Others use it to try to get rid of older models of specific products, especially in the wake of the release of a more recent model.
And why would anyone want to buy an old model, even for a dirt-cheap price, when they know that it is already hugely outdated, and that more recent and better models are now available?
That’s not what consumers want – they were promised a day when they could buy the pricey and valuable products at cheap prices. Instead they were tricked by retailers trying to play a short game.
That was the retailers’ mistake and they shouldn’t be surprised that customers are wise to it.
Playing the long game
The whole concept of Black Friday is best suited for a long game scenario. It is an opportunity to put pricey products in the hands of people who would never usually buy them, and then leave a seed of desire to maybe come back and buy more, but this time at full price.
Amazon know and have quantified the benefit of getting their products into a customer’s home and the value of a proper relationship with the customer.
One retailer who gets this right is Amazon. Year after year, they offer fantastic prices on some of their most valuable tech. Sure, in the short term, it will cost them. After all, there’s no short-term profit to be made in undervaluing valuable products. The profit, however, lies in creating an opportunity for that customer to come back for more.
What Amazon has, that few other retailers have, is a strong insight team and belief in data at the heart of their business. They know and have quantified the benefit of getting their products into a customer’s home and the value of a proper relationship with the customer. This knowledge means that the decision of selling key lines at minimal to no profit is a much easier one to make, as they know and understand the long-term benefits.
By utilising their data in a similar way, retailers can understand what products might drive loyalty. Sure, it might cost them some cash in the short term, but it’s worth the reward of having many of those customers make the return journey in the long journey.
So, let’s not be so hasty as to herald the end of Black Friday. Instead, retailers just need to rethink how they use it.