Blog > Is Black Friday Harming UK Businesses?
Posted By Jack Ricketts
The shopping season is fast approaching and no doubt, preparations are already well underway to make the most of all this time of year has to offer.
One such event that springs to mind (aside from Christmas) is, of course, Black Friday. It’s a huge event with businesses of all sizes competing head-to-head to entice shoppers through their doors or onto their websites.
Every year since Black Friday reached the UK, we have shared tips and advice on how to capitalise on the influx of eager shoppers. This year, however, we are making a conscious decision to step back from Black Friday and we would urge you to as well.
A Quick History Of Black Friday
Black Friday was born in the USA and has been their busiest shopping day for years. You may have seen clips of the carnage that ensues when shops first open their doors in the morning, with hundreds of people ready to clamber for the hot deals they’ve been waiting for all year round.
The event was first brought over to the UK by Amazon in 2010, but it didn’t gain traction until 2013 when Asda (another American corporation, owned by Walmart) decided they wanted to replicate their success across the pond.
The whole event soon caught fire and now, big businesses and small businesses alike prepare every year to lower their prices to a level that suits mass consumerism rather than the profit margins that allow them to keep their business afloat.
Let’s take ASOS for example. Last year, the online fashion retailer issued a profit warning after Black Friday. Not only did they report very tight profit margins, but they found themselves blindsided by a flurry of returns that needed to either be processed for resale, or discarded.
Amazon Is The Winner
Let’s rewind a bit, Amazon first brought Black Friday to the UK and to them, it makes perfect sense to do so.
Amazon is able to operate through massive economies of scale. By using their buying power, they are able to afford to undercut their competition with less pressure on their profit margins.
Naturally, Black Friday is an event in which the online giant continues to thrive, with reports last year stating that they owned 26% of the Black Friday and Cyber Week Market as well as a 3% YoY growth.
It is by using these economies of scale that Amazon is able to shove small businesses out of operation and with Black Friday on the horizon, try to take down some bigger UK businesses too.
The devastating effects that Black Friday has on UK Businesses isn’t just contained to a couple of weeks of Black Friday Bonanzas.
What this represents is that customers are being conditioned to wait until price drops. Over the years since Black Friday started, businesses have fallen into the trap of trying to beat each other in terms of price and the consumers are waiting to jump at the opportunity.
This is all during a time that historically has been a peak season for retailers and when consumers would have been quite happy to pay what an item is actually worth.
Everyone is competing in a race to the bottom and actually missing out on the real opportunity across the season. Michael Ward, the boss of Harrods, once likened the whole charade to “turkeys voting for Christmas”. Retail suicide.
What Can You Do?
There are a number of retailers like Harrods that choose not to participate in the Black Friday event. Last year we also saw M&S, Selfridges, Dunelm and more decide to continue with business as normal. Dunelm even adopted the tagline over the season: “Great value every day, not just Fridays”.
As a small business owner, time and effort goes into lovingly sourcing or producing your products and you know the value of the work you do. For many the key is not to get involved in Amazon’s game and to instead focus in on that value you provide, share your stance with your audience and engaging with your connected customers consistently all year round rather than trying to make a few discounted sales.
Here are some tips for businesses NOT participating in Black Friday:
Turn Your Attention To Small Business Saturday
Small Business Saturday soon follows Black Friday and aims to showcase and support Small UK Businesses up and down the country. It was estimated that around £812m was spent with small businesses during the event last year.
The date this year is Saturday 7th December and the focus is shifted to the great work that small businesses do every single day.
Not only that, but they offer a huge amount of support to small businesses that choose to take part. Including workshops, marketing packs and directory listings.
Do Something Different
Without getting sucked into the myriad of reductions, there’s still a lot of people looking to buy over this weekend so consider what you could be doing differently in order to cut through the noise and be heard.
For example, FatFace has decided that instead of participating in reductions, they would donate a portion of their profits to charity. This again draws attention to a more positive way for consumers to spend their money.
It doesn’t have to be related to charity either. Think about what matters to your consumers more than price and find a way to spotlight these positives. Your message will stand out as a contrast against the blend of mass marketing efforts.
Run Sales Events On Your Terms
Using discounts or special offers as a way to entice people to your store is still a proven, effective marketing method. However, this needs to be on your terms.
Black Friday takes this away from you in a whirlwind of competing price drops.
Calculate your margins, take time with your promotions and plan to speak up when everything quietens down. Your marketing will be a lot more effective when you’re not fighting against big businesses to be heard and your offer is outside of the expected norm.
When done correctly, a small offer can help to improve your average order value and increase your revenue. In the image above, the promise of a set of free knitting needles is designed to encourage people to spend over a certain amount. You might find a postage offer or a discount code email to your loyal shoppers may work well for you.
Find an offer that works for you and compete smarter, not harder.
Write About Your Views
If you feel strongly about Black Friday, and you begrudge the increasing pressure each year to take part, share this with your audience.
It is becoming more and more apparent recently that people don’t connect with brands as much as they do with people. They want to hear your story, what you stand for and connect with what you do. This will increase the likelihood that the right people will want to buy from you.
There is a huge community of likeminded people that feel the same about Black Friday and big businesses in general. Take our #WeBuySmall Facebook community for example. Within a month, we have had hundreds of people join and participate.
Not everyone is looking to buy cheap. There are people out there that want to support small businesses and are keen to buy your unique products or services that can’t be found anywhere else.
By writing a piece around why you are choosing not to participate in Black Friday, you are instead reaching out to the portion of your audience that can relate to you and will be keen to stand by your decision.
Participate in #WeBuySmall
We previously mentioned our Facebook community #WeBuySmall. We’re on a mission to help independent businesses get found online.
The Facebook group offers the opportunity for buyers to post requests that business owners can respond to directly with ideas and suggestions. This allows for an exchange between real people to happen and connect sellers with conscious buyers.
In addition to the group, there’s also the opportunity to feature in our Christmas Gift Guides. With the weight of a joint community helping to promote these guides, everyone can benefit from the increased exposure in order to compete with big businesses over Christmas. We intend to add more Gift Guides throughout 2020 as a way to consistently promote members all year round.
Many believe that the genie has been let out of the bottle in the UK now and each coming year, retailers will be forced to battle it out at the expense of profit.
Amazon brought Black Friday to the UK because they knew that the format would work for them, not because it would benefit UK Business as a whole.
Standing apart from the crowd could prove to be your biggest asset in these times. Saying no to the pressure poured on by Amazon and bargain hunters can help you to stand out and find your loyal audience that want to support you.
This is a chance to talk about the real value you offer, more now than ever before. It’s an opportunity to highlight what makes you special and why the price tag associated with your product should not be the defining decision.