Black Friday is an informal name for the Friday following Thanksgiving Day in the United States, which is celebrated on the fourth Thursday of November. Many stores offer highly promoted sales on Black Friday and open very early, such as at midnight, or may even start their sales at some time on Thanksgiving.This day is embraced by many world-wide and people tend to buy much more as compared to to other days due reductions in prices.
Black Friday Pros
Increments in sales
People have a real intent to purchase around the Black Friday weekend and this can translate into increase in sales this is driven by the reductions in prices of selected products and so people get tempted to even buy things they never budgeted for in the first place.
Increased Traffic and Sales
People are looking for deals, they’re also shopping for Christmas, and Black Friday focuses a lot of traffic and sales into a short period. Many people visit websites for stores like amazon, eBay to check and see the discounts that have been offered. In doing so, they actually increase traffic to such websites. This is a clear opportunity for retailers to capitalize on customer demand and bring extra traffic to their sites.
An Opportunity to Clear Stock Before Christmas Season
Many retailers see Black Friday as an opportunity to clear old inventory in order to introduce newer stock in time for Christmas.
This applies to fashion retailers of course, but electronics retailers can also offer discounts on items like TVs and laptops knowing that newer models are coming soon. Its funny but true that in Uganda, most people hop for liquor and soda. Refer to this.
New customer acquisition can be expensive, but Black Friday offers retailers a chance to acquire new customers at a key time of year. If you acquire customers around Black Friday, and keep them happy, then you have a chance to drive repeat sales in the Christmas period and beyond. If customers can be retained in the longer term and they buy at full price later, this justifies discounting around Black Friday.
One benefit of shifting sales to earlier in the Christmas shopping season is that orders can be processed and shipped well before Christmas. This means there’s no danger that people won’t receive gifts in time for Christmas, and also frees up capacity for later in the season.
Black Friday Cons
Crowded and Competitive
With so many brands talking about their Black Friday discounts, it can be hard for a retailer to have their message heard above the noise. Also, while Black Friday drives more search traffic, it also increases the competition for retailers.
Pressure to Discount
Black Friday has been known for generous discounts, and some customers have come to expect it. This puts the retailers on pressure.
It Can Generate Returns
Discounting and therefore selling more at this stage of the holiday season means that some goods will be returned in the final weeks running up to Christmas.That means that retailers’ distribution centres can become even busier at their busiest time of year.There’s also a risk that goods returned may not be able to be sold before Christmas and may sit on the shelves until the next gift period comes along.
Impact on Margins
Retailers need to consider how far they can realistically discount, as they can reduce margins on products they may have sold closer to Christmas at full price.Then again, if they don’t discount, but their competitors do, retailers may be losing out to competitors. It’s a conundrum for retailers.
In Summary, Back Friday presents opportunities to sellers to increase on their sales but they have to consider the other side of participating. If it out-ways the positive side, then they can go on and offer discounts meanwhile check out Peace Apartments to see their festive discounts.