Black Friday/Cyber Monday: How retailers can prepare for the big weekend
The big sales bonanza begins on November 25. Intuit's Dominic Allon offers some tips on how your can prepare your business for the spending weekend...
The mammoth sales weekend of Black Friday and Cyber Monday is almost upon us. The craze, passed over from America, has led to consumers demanding steep discounts to cover their Christmas shopping.
Last year, UK shoppers set new records; with total sales on the Friday reaching £1.1bn and £968m on the Monday.
And, while it has proven to be a success for some big-name retailers – Black Friday helped John Lewis hit its biggest ever week of trading last year as both online and in-store sales soared by 15.5% – not all retailers are so happy to see the sales weekend roll around again.
For small retailers who don’t have the number of staff or appropriate website infrastructure to handle such high in-store or online sales volumes, the impact of this weekend can be severe.
If you’re a small retail business or independent retailer, here are the five key things that you should consider when preparing for the Black Friday and Cyber Monday spending weekend:
Give the right discount
Big retailers have the money and ability to add larger mark-ups to their products, so there is still room for them to make a profit even when an additional discount has been added. However you may not be able to afford to drive costs down further.
You must be smart with the discounts you offer; make sure you are still able to make a profit whilst remaining competitive.
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Buy first, return later
Yes, consumers are more willing to buy over this weekend, but that doesn’t mean they are willing to keep their purchases. An increase in sales does also, in many cases, mean an increase in returns.
You’ll need to think beyond the weekend and factor in the chance of returns into your finances, otherwise you could fall short when predicting your profit and loss.
Buying stock is a balancing act
Buying from suppliers may be costly, and on normal days when the shop isn’t as busy, having two of every item in stock may just be enough. Yet more shoppers are expected on the high street during this bumper sales weekend, so having enough stock in store to cover extra sales is crucial.
Use data from previous years to understand what’s likely to sell and buy enough stock to keep customers happy, but bear in mind that going over board and not selling risks problems with your cash flow.
Having to rely on others
Unlike larger retailers, your small retail business is unlikely to have a logistics service that can adapt to the demand over the busy period.
Instead, you must rely on external services that are already busy with multiple other suppliers. You must offer your customers a guaranteed delivery time that aligns with what your courier service can offer.
Introducing a slightly longer delivery time over the busy period could help with the demand and keep your customers satisfied.
Plan, predict and manage
No matter how big a business is, the key to success over this weekend is preparing for every eventuality.
Not having a complete overview of your finances heading in to the big weekend could stop you in your tracks. Using a tool that provides a holistic view of your finances and monitors all money coming in and going out is crucial to surviving the weekend of extra sales and extra returns.
If you play your cards right and plan for every outcome, your small retail business can reap all the success of this long weekend of serious spending.
Dominic Allon is Europe vice president and managing director of Intuit.