As the build-up to the busiest shopping season begins, businesses are left with a major decision: Do I participate in Black Friday and Cyber Monday (BFCM)? Yes or no – almost everyone takes part, whether you’re a business or a consumer.
Over the years, BFCM has received a negative reputation. From promoting mass consumerism to generating tonnes of landfill waste, this holiday season puts a huge amount of pressure on the planet – and our wallets.
In this blog, we’ll explore the pros and cons of joining the BFCM craze, including whether it’s worth the investment for SMEs.
Pros of Black Friday marketing
1. Increases sales
Black Friday and Cyber Monday (BFCM) are a make-or-break period for many businesses. For most e-commerce stores, there is a huge lift in sales between October and December. In fact, 46% of WooCommerce merchants report that over 30% of annual sales come from BFCM alone.
Increased sales don’t just come with luck. Your Black Friday marketing campaign will do most of the heavy lifting, and then your strategic promotions will drive customers to purchase.
2. Builds your audience base
For most brands, marketing starts weeks before the big day to build momentum. You may create priority email lists so customers are the first to know when promotions drop or have a countdown on your social media to drum up excitement.
Either way, these tactics will build trust in your brand, increasing your chances of converting. A large mailing list offers a lot of potential for year-round email marketing, which, when done well, will turn customers into advocates and encourage them to return sooner for a repeat purchase.
Don’t forget – marketing isn’t just for the holidays. It’s for life. That’s why your Black Friday campaigns should be part of a bigger picture: your marketing strategy.
3. Shifts stock
If you have surplus inventory that needs shifting, BFCM is the perfect time to get it out. Bundle and BOGOF discounts help you get through old or surplus stock while your customers get extra for free (or heavily discounted).
Excess inventory can tie up cash flow, limiting the money available for purchasing next season’s products. By clearing it out, you’ll have more space for new inventory and a head start on fulfilling next season’s orders. It’s a win-win situation.
Cons of Black Friday marketing
1. Doesn’t secure customer demand or profits
Black Friday is the biggest sale of the year, so your customers will expect special offers to make a purchase. By relying on these discounts, it’s said there is no real increase in consumer demand.
Instead, your customers are holding out until the prices move. If they’re unwilling to pay in full, is the demand there? With an expectation for steep discounts, it will be harder for stores to sell full-priced items throughout the year.
And if you put your offers too low, you’ll generate minimal profit or even a loss. So, how low should you go? Discover how to strategically price your BF discounts in the next section.
2. Generates uncontrollable website traffic
Consumers are ditching brick-and-mortar stores and shopping from the comfort of their homes. In 2023, Black Friday reached £1.04 billion in online sales, compared to a soaring £3.45 billion across the Cyber Weekend.
With traffic spiking up, your website will undergo immense pressure. If poorly optimised, your customers will experience slow load time, site errors or unresponsive pages.
Site performance and availability will impact your bottom line, and with customers impulsively buying, they won’t hesitate to take their money elsewhere. Our Black Friday preparation guide offers some quick tips for maintaining site performance.
3. Creates a logistics nightmare
BFCM can be a huge strain on your supply chain. From stock shortages and delayed shipments to hundreds of returns, your business must be ready to handle increased demand.
To overcome logistics challenges, you must carefully plan various aspects across the supply chain. This includes demand forecasting for accurate inventory levels, having enough team on to fulfil orders and choosing reliable carriers for shipping.
But what about the dreaded “Returns Thursday”? On December 3rd, retailers see around 30 million unwanted goods being sent back for refund. Impulse buying is unsustainable. This consumer mentality treats returns as an expected part of the shopping experience.
Whether you offer free returns or not, these refunds will reduce your profits. To manage unruly impulse buyers, add better product details, photography and relevant size guides to ensure your customer makes the right choice.
How low should your discounts go?
At the end of the day, it’s all about profitability. If your price is too low, you’ll eat into your profit margins. Too high, no one will buy.
First, know your costs to ensure you’re not cutting too deep. Understand your audience and find out what pricing is enticing but sustainable. Your pricing strategy should align with your market – popular tactics include competitive or value-based pricing.
If you don’t have data from last year, try a/b-testing discount rates to see which pricing point drives sales and protects profits. For BFCM legends, you should refer to previous years’ data for better forecasting.
Is Black Friday good for small businesses?
If done well, Black Friday can be very successful for your brand, even if you’re an SME. You can overcome most of these challenges with strategic preparation and investment in your marketing.
Through the same steps, we helped a cosmetic clinic generate over £75,000 in revenue last year. Trust us – preparation is key.
Get your BFCM game on with Trio
Trio is a strategic marketing agency with years of experience helping e-commerce and B2C brands drive revenue across BFCM. Interested? Let’s talk and get your marketing in order.