Black Friday. Crowds. Mess. Destruction. Late work hours. Over-time. Smaller profit margins. Disgruntled employees torn from their families on, what I feel, is the most important American holiday. Why would a company CHOOSE this?
Contrary to what some might believe, there’s nothing customer-centric about Black Friday. It is, however, all about the chronic myopia of an industry that’s struggling to remain relevant.
Who’s even buying from you on Black Friday? Your best and most loyal customers, or a crowd that you don’t even market to, with slim to zero chances of up and cross-sell? Is putting your staff and store through the torture of Black Friday truly worth it?
Is Black Friday Good for You?
Firstly, I’m not saying that Black Friday is a bad idea across the board. Brands like Walmart and Best Buy have it down to an extremely profitable science. For some retailers, November to December represents 50% of their overall sales volume. But, that doesn’t mean it’s a good move for every brand.
Try answering the questions below to see if it’s the right move for your retail business:
- Are your best customers price sensitive?
- Would you generate enough sales volume to justify the marginal profit of blow-out deals?
- Do you value revenue over customer and employee experience?
- Do you have a strategy in place and means to convert one-time, deep-discount shoppers into loyalists?
If you answered ‘yes’ to all of the above, you may want to consider implementing a Black Friday event. If it was a ‘no’ to even one of these questions, then opt out of Black Friday.
What’s Customer-Centric About Tricking Your Customers into Buying More?
Black Friday was never about giving customers the opportunity to buy for less. It was always about companies dumping old inventory and inferior product into the market.
Here are some classic ways retailers manipulate consumers into believing they’re accessing deeper discounts or once-in-a-lifetime deals:
- Using outdated products or inventory that’s no longer manufactured
- Commercializing inferior products made specifically for Black Friday
- Suspended price-matching: retailers don’t allow you to get cash-back for previously greater discounts (normally because the price isn’t that low to begin with)
- Raising prices a couple weeks prior in order to exaggerate discount percentages
- Misleading Advertisements and scam ads
- Strategic product placement, placing full priced items next to discounted ones to trick you into mistakenly paying full price
Misleading. Your. Customers. Is. Not. Customer. Centric.
Understand Who Your Customer Is and What They Value
Who do you value more, customers who only buy last-call or deeply discounted goods, or the ones consistently spending top-dollar for your products?
Businesses and leaders need to understand which customers represent the highest value to the company, but also understand what value means to that group of individuals, then design products and experiences based on their needs and desires.
Nordstrom seems to adhere very well to this concept and has made wide strides towards dividing up their business strategically. While Nordstrom Department Stores tend to already be on the higher end, they are launching a yet-higher tier, “Local Experience Store” that fits like a glove into the time-well-spent model.
Simultaneously, their Nordstrom Rack stores have been a very profitable operation in discount retail, and the time-well-saved features of their mobile app help the brand cover the entire market. FYI: Nordstrom only opens for regular business hours on Friday and doesn’t subscribe to the “midnight madness”.
Conducting extensive research in order to identify and properly classify your customers and what they deem “worth it” doesn’t need to be that expensive and certainly pays off. In the Experience Economy, no one is safe. This knowledge is crucial when planning how to avoid the fate of your predecessors.
Join the Ranks of Those Who #OptOutside
This year, 75 retailers contacted by BestBlackFriday.com said they would not open on Thanksgiving. Their research also shows that America wants stores closed for the holiday with “57.53 percent of Americans saying they were against stores being open on Thanksgiving, 36.87 percent strongly against them and only 16.22 percent said they favor Thanksgiving openings, with 5.60 percent stating they strongly favor it.”
But some companies are way ahead and have backed out of Black Friday altogether.
ModCloth has ‘broken up’ with Black Friday. The online store announced last year that instead of making money, they would be donating $5M worth of apparel to the non-profit Dress for Success. Their #BreakUpWithBlackFriday campaign invited shoppers to nominate someone they know who is giving back and deserves recognition.
Since my family hits the hiking trails of the Blue Ridge in Asheville, NC every year the day after Thanksgiving (weather permitting), I deeply identify with this next company.
REI started the #OptOustide campaign 4 years ago and has now inspired folks all around the country to skip the stores altogether and head outside to enjoy the day with family and friends. All of their stores close and staff gets an extra paid day-off every year. A company email reads, “Instead of reporting to work, we’re paying our employees to do what we love most—be outside.”
Here at Worthix we do the same, so don’t expect any emails from us till Monday.
Learn more about how to implement true customer-centricity in your company. Download the 5 Steps to Implement CX eBook now.