The final Grand Prix for 2022 has been run and won, but for retail teams, we’re down to the last frantic moments before lights out on their biggest sales race of the year.
It all starts this week with the Black Friday and Cyber Monday sales, kicking off about six weeks of relentless retail activity that is hyped as the key trading period of the year.
Behind the scenes, months of preparations have led to finely tuned retail machines, knowing that it’s the time of year that consumers are most aware and engaged in buying.
The Australian Retailers Association (ARA) forecasts that a record $6.2 billion sales will be taken across November 25-28, $200 million more than last year.
Black Friday has traditionally been a US retail event — the first Friday following Thanksgiving. However, this retail event has well and truly come into its own on our shores, driving an incredible amount of retail activity during this time of year.
We’ve already been primed to be aware of these sales events and others, such as Click Frenzy, where even companies that choose not be part of it trade off that excitement.
Is Black Friday worth it for Australian retailers?
It’s a big commitment for retailers. What do businesses stand to lose if they are not part of it?
Typically, we see strong spikes in orders and transactions across nearly every retail brand and this four-day weekend can deliver benefits if you use this activity to your advantage.
With a highly engaged retail audience, the sales period has become a highly contested time during the year for retailers.
This means there is now pressure on the price of products and a crucial element to making it a success is how you balance the discounted items with full-price ones.
While retailers understand the impact this has on margins, the need to be part of this sale event is one that nearly all retailers feel compelled to participate in (whether they like it or not).
Especially in the lead up to Christmas, this may seem like retailers are often on sale during the last quarter of the calendar year. It does lead to retailers wondering; are customers ever going to buy at full prices again?
A retailer may be known as a great brand but if customers feel they can wait around because there’s always another sale about to start, that is a hard place to escape.
Sustainability is also starting to emerge as a theme into these retail campaigns, with Green Friday — encouraging people to support conscious consumerism.
Retailers that went against the grain with the anti-Black Friday message provided an alternative narrative in 2021, and it seems like more are following suit, where the environmental message is another platform for brands to work with.
Interestingly, some are less concerned about missing the sales and instead played the long game, trusting that customers would remain loyal without the discount trade.
More sophisticated retailers and websites are awake to discount strategies and it might be difficult for consumers to find a particular product sold by a particular brand this week.
It’s an intentional action from the retailer because they know the true value of that product.
All of this is not to dismiss Black Friday as an important date in the retail calendar.
Ignoring it is very difficult for retailers. Pushing hard on Black Friday deals may show consumers that a brand and its products are fresh and relevant, which is important in this fast-paced world.
Retailers that stand still over as little as one or two seasons can be easily forgotten about.
With the retail engines revving, we’re about to enter the most exciting and important time of the retail year, but it’s essential to be strategic.
Retailers should consider removing stock that they don’t need or want to sell at a discount because success means you can break out of that cut-price cycle.
Don’t discount the long-term relationships with customers acquired during the sales and help them see value in full-price products to ensure you hit the new year at full throttle.
This article was first published by SmartCompany on 23 November 2022. Licensed by the Copyright Agency. You must not copy this work without permission.
