Black Friday has evolved from a little-known promotion in the UK to one of the biggest events on the retail calendar in just a few years. However, its exponential growth has not been without challenges. Here, Vicky Brock, CEO of returns intelligence specialist Clear Returns, outlines the potential pitfalls Black Friday presents – and how High Street retailers can overcome them to maximise revenue.[su_divider]
Consider this for a moment: £1bn is predicted to be spent in the UK on 27 November, otherwise known as Black Friday. The event has grown from a US only phenomenon to a global frenzy in just a couple of years – and while the majority of peak trading days for jewellers may have been and gone (Valentine’s Day and Mother’s Day), the opportunity Black Friday presents can’t be ignored.
There’s a huge opportunity here for the jewellery industry, as there’s an appetite for exclusive deals. Last year, Amazon named diamond jewellery among its best-selling items – not surprising considering one in four consumers said they’d like to receive jewellery as a Christmas gift last year!
Black Friday: not just an ecommerce event
It’s easy to assume that Black Friday has now become a predominantly online opportunity – particularly as it is quickly followed by Cyber Monday, which is exclusively ecommerce – but the media images of people fighting over bargains in the aisles of some of Britain’s biggest retail stores would tell otherwise.
In fact, it’s a chance for bricks-and-mortar to kick-start the Christmas trading period earlier than usual. However, this in itself causes some challenges.
Delivering a seamless service on Black Friday relies on people, processes and technology working in complete harmony. Many retailers have updated their operational systems since last year, as they were unable to cope with the demands of the day in 2014.
While it’s too late to make significant structural changes at this stage, what is critical is that your departmental communications are transparent in the build-up to the event. IT support – whether you outsource or have an in-house team – needs to be fully aware of the business decisions being made, and the volume of customers you expect, in order to maintain network performance throughout the event.
Preparing the store environment
They say to be forewarned is to be forearmed, and this is certainly the case with Black Friday. Some retailers are forecasting that it will be 4 times bigger than 2014, and there’s only one way to cope with this unprecedented demand and store footfall: more staff.
The fundamental thing to remember is that your customer experience must not be compromised, even if there are double or triple the number of visitors to your stores. Some will be regular shoppers, whose business you’re keen to retain, others might be first time buyers, who will come back again if you provide them with a good experience.
All that glitters…
Jewellers also need to appreciate that Black Friday is a risk to the key Christmas gift trading period and therefore you must ensure product selection isn’t cannibalising existing demand.
In addition, one of the biggest Black Friday revenue drainers is returns; people buy a bargain on a whim, and then decide to bring it back into their local store. Our data forecasts that returns from Black Friday will cost UK retailers £130m this year and many jewellery products such as chains and bracelets will come back tangled, which makes processing and getting them back out on sale a headache.
Think beyond Black Friday
Your challenge is to process that stock and get it back onto the shop floor as quickly as possible. Valuable money is lost through jewellery sitting out back or being tied up in the warehouse during December, when Christmas trading reaches its peak.
It’s not uncommon to have a situation where disgruntled customers walk away as an item is out of stock in their local store, but large quantities of that product are sitting in the distribution centre, because returns haven’t yet been processed.
Even worse, by the time you gets round to sorting out the stock, it’s likely to be after Christmas, and therefore the jewellery has to be discounted, coming back into the store as part of the January sale.
Therefore, the challenge for the high street this Black Friday is not to go mad on slashing prices, but to create an environment that’s optimised to convert curious shoppers.
If anything does unfortunately come back post-event, it should be circulated back onto the shop floor as quickly as possible – but more than that, you should be looking at what’s driving the return, to identify any common causes.
‘Quick win’ returns lessons from Black Friday could mean you’re able to make valuable changes in the last minute rush before Christmas, which ultimately results in your customers keeping more of what they purchase.