Black Friday is fast becoming one of the largest shopping days for online sales in Australia. Is it any wonder small businesses are flocking to take part? As Friday, November 29 approaches, Stacey Fisher, co-founder of online retailer Minnow Designs shares her top tips for reeling in the customers.
1. Go Deep (but check your P&L first).
My philosophy with Black Friday is to go hard or go home. You’ll need to offer 30 per cent or below on your current stock to cut through the clutter and compete for dollars with all the other retailers that are also running black Friday promotions. Black Friday is a volume game so play with your product P&L’s and work out how to offer your customers enough of a discount to make them take action, using mechanisms that protect your margin. For a couple of examples, read on.
2. Don’t start communicating too early
We tend to leave the Black Friday Comms to customers until a few days before the day itself. You need to strike the fine balance between getting your sale diarised amongst the Black Friday bargain hunters and not discouraging your customers that would otherwise buy at full price from buying in the weeks leading up. We also ONLY run the promo for 2 days. The customers that are into Black Friday bargains will know when to shop.
3. Offer incentives to increase basket size
Again, the Black Friday sale is all about volume. If you’ve crunched your numbers and you know your P&L, you’ll know that there is always a percentage of your margin going to customer acquisition. This cost remains pretty steady whether that customer buys 1 item or 3. Go for 3. We run an ascending 20%, 30% and 40% discount depending on the size of the order to incentivise customers to buy more. As our shipping costs and cost of customer acquisition remains similar up to a particular volume, we want to be packing as much into every order as possible. Other mechanisms to increase average basket size are free gifts for orders over a certain amount (great for bricks and mortar retailers) or for free shipping over a certain amount (for eCommerce)
4. Plan the logistics
Do this now. Seriously. There is nothing like finding yourself short staffed, having all your floor staff milling about the wrapping station when you’ve got a line of customers out the door or running out of shipping boxes and packing tape on the day you have hundreds of orders to go out.
5. Extend an offer to your wholesale customers
Two weeks before Black Friday we send out a communication to retailers, offering a per cent off orders placed in the lead-up. There are both ethical and commercial reasons for doing this. If you have wholesale customers, it’s important that you show them that you understand their challenges. They’ll be dropping their prices and it’s only fair that if they’re competing with your eCommerce store that you extend a discount to cover their lost margin. This will mean that they aren’t left with the choice of leaving you to cannibalise their sales or dropping so much in margin it’s barely worth offering your product. The second reason to do this is that Black Friday falls in one of the last weeks that buyers are loading up on pre-Christmas inventory and the price off could be the sweetener they need to secure that last order before the new year.