Remember, just a few years ago, when we would look forward to the Christmas Promotions and post-Christmas sales. Beginning on Boxing Day brands big and small would slash their prices. Usually, these price reductions were reserved for retail stores – think clothes, electronics, children’s toys, and other products.
That was before.
Forget Boxing Day sales – it’s all about Black Friday. Beginning in the US, it traditionally marks the first Friday after Thanksgiving. However, in the past decade, major UK retailers, like Argos, John Lewis, and Very, adopted the practice, leading to sizable retail sales. Today, UK consumers spent £8.71 billion over the Black Friday weekend, causing some online retailers to launch Cyber Monday (when we fork out a further £1.46 billion).
Black Friday is a mammoth opportunity for small businesses – especially those squeezed by the current cost of living. But how do smaller or local retailers compete with major stores? Should small businesses even bother with Black Friday and Christmas promotions? And if you do choose to cut prices – how much should you reduce by? We’ll answer all your questions below.
In this guide:
- Black Friday 2023: What Is It?
- Black Friday and Christmas for Small Businesses: How Important Is It?
- Should Small Businesses Bother With Black Friday?
- How To Make the Most of Black Friday (As a Small Business)
Black Friday 2023: What Is It?
Christmas approaches – already shops and businesses are dusting off their decorations. Black Friday – a key date in the retail calendar – will fall on 24th November 2023. With shoppers feeling the economic squeeze, Black Friday will likely be the main date for people’s pre-Christmas shopping.
As with all things Christmas, deals and promotions will kick off earlier: online retailers like Amazon will run sales from late October through Christmas. The biggest categories in 2022 were clothing and footwear, electricals, and toys, and they’ll likely continue to be popular in 2023.
High inflation and tough economic conditions haven’t stopped major retailers from slashing prices already, and we expect some of the biggest discounts yet as manufacturers look to shift any remaining stock.
Subsequently, due to the aggressive discount strategies, small businesses face significant challenges during the festive season. On the one hand, increased consumer spending creates the best opportunity of the year. But, on the other hand, the pressure to cut prices can negate the skyrocketing sales.
Black Friday and Christmas for Small Businesses: How Important Is It?
Christmas is no longer a simple sales holiday for small and local businesses. In 2022, shoppers chose to stay home, as footfall fell 19.7% compared to 2019. As online transactions pick up the slack, bricks and mortar businesses must adapt to survive.
However, with consumers increasingly interested in personal or unique products, small businesses have a big opportunity. Black Friday is, therefore, a chance for small businesses to leverage their uniqueness, showcase artisanal and bespoke products, and build a strong digital presence to attract both online and in-store customers.
Here’s what we learned from Black Friday 2022:
- Total sales for Black Friday 2022 were significant, reaching £12.3 billion, an 8.3% growth compared to the prior year.
- Despite the growth in total sales, the average amount spent per individual declined. The average expenditure was £189.59 per person, reflecting a 31% (£85) reduction from the previous year.
- Preference for in-store shopping has declined, with a 36% drop in 2022. This means consumers spent roughly £96 less on the high street than in 2021.
- Amazon continued its dominant presence during this shopping holiday, with 39% of Brits purchasing at least one promotional item from the platform.
- Impulse buying was a notable trend, with 51% of shoppers making impulse purchases during the Black Friday 2022 promotions.
- However, there’s a call for better promotional strategies, as 56% of UK adults expressed their disappointment with the 2022 Black Friday offerings. Enhancing the overall shopping experience is crucial, as 84% indicated they would likely return to a retailer offering a more satisfying Black Friday experience.
Black Friday and Christmas 2022 underscored the pressing need for small businesses to adapt to the digital shift while playing to their strengths: uniqueness and personal touch. The decline in in-store shopping, contrasted with Amazon’s dominance, emphasises the necessity for local businesses to enhance their digital presence.
As consumer preferences evolve, small businesses must strategise effectively to capture both online and loyal in-store patrons in future sales seasons.
Should Small Businesses Bother With Black Friday?
To cut or not to cut – that is the question. Black Friday is no longer solely for the mega-retailers; however, many question its relevance and profitability for small businesses. Let’s dive into the debate:
- Visibility Boost: Amid the Black Friday noise, even small businesses can gain attention, particularly if they strategically market their niche or unique products.
- Customer Acquisition: New customers might explore smaller shops looking for unique deals or to avoid massive crowds.
- Loyal Customer Engagement: Businesses can foster loyalty and reward patronage by offering exclusive deals to regular customers.
- Online Engagement: Digital sales and promotions can help tap into the growing number of online shoppers, potentially expanding reach beyond the local area.
- Margin Pressure: Discounting can erode profit margins, a significant concern for businesses that lack the volume benefits of big retailers.
- Overshadowed by Giants: Mega-retailers can afford colossal discounts and extensive advertising, often overshadowing smaller players.
- Inventory Challenges: Predicting the right stock levels for Black Friday can be tricky. Overstocking can lead to post-sale markdowns while understocking can miss potential sales.
- Operational Stress: Increased traffic, both online and in-store, can strain resources, staff, and digital infrastructure.
It’s not just these challenges. Some small business owners don’t believe in “pressuring people” into buying stuff, citing the environmental costs of rampant consumerism. Independent retailers even launched a sort of anti-Black Friday in 2021, boycotting the sales holiday and instead donating profits, shutting down websites, and planting trees as an alternative.
You could follow in their footsteps or choose to introduce a discount after Black Friday that runs until Christmas, reducing the pressure on customers to impulse buy.
How To Make the Most of Black Friday (As a Small Business)
So, you’ve weighed the pros and cons and are contemplating joining the Black Friday bandwagon as a small business. But how can you truly capitalise on this massive shopping event without the vast resources of the retail giants? Here’s a game plan tailored to small businesses:
- Niche Marketing: Highlight what makes your business special. It could be handmade products, sustainable practices, or locally sourced materials. You can attract discerning shoppers by standing out in a sea of generic discounts.
- Early Promotions: Start teasing your promotions a week or two in advance. Use social media, email newsletters, and your website to generate excitement among your existing customer base and potential new patrons.
- Bundles and Packages: Rather than individual discounts, consider bundling related products. This way, you can sell more while still offering perceived value to customers.
- Personal Touch: Enhance the shopping experience with personal notes, gift-wrapping options, or customised services. Small businesses often thrive because of their personal connections to customers.
- Loyalty Rewards: Reward your loyal customers with early access to sales or exclusive discounts. This gesture can deepen your relationship with them and encourage repeat business.
- Eco-Friendly Alternatives: If joining Colour Friday appeals, consider promoting eco-friendly products or pledging a portion of your sales to a good cause.
- Manage Inventory: Be clear about your stock levels, and consider implementing a reservation system for high-demand items. This way, customers know what to expect, reducing potential frustrations.
- Streamlined Online Experience: Ensure your website can handle increased traffic. Implement user-friendly features, easy navigation, and secure payment options.
Closing Thoughts About Christmas Promotions
Don’t be pressured into cutting your prices – especially if you can’t afford it. Whether you participate in Black Friday promotions depends on your finances and brand values. Ask yourself:
- Will I make a profit from Black Friday and promotions on Christmas?
- Do I believe Black Friday is a good idea?
- How do I know these promotions will be a success?
It’s probably better for small businesses to run a small discount over Christmas than slash prices for a day. That makes better use of your smaller footfall or site traffic.
Want to learn more? At The Resilient Retail Club, we offer expert advice on growing your business and managing holidays. Whether that’s our podcasts, tutorials, or one-on-one guidance – check out our membership benefits.
Or, if you want to learn more, see this article about Black Friday Marketing Ideas for Small Businesses.