In less than a decade, Black Friday has become the most important shopping day of the year. According to data from the National Retail Federation, Black Friday is responsible for 30% of all annual retail sales. It’s the start of the holiday season and is not only a chance for consumers to find some of the years’ best bargains, but it’s also a chance for businesses to leverage the holiday spirit to boost sales and increase revenue.
For any business looking to benefit from Black Friday in 2017, some effective promo structures can be an excellent starting point.
Bulk Promo Strategies and Discount Structures
Although large ticket items are responsible for a significant amount of total sales on Black Friday, discount structures on low cost items can help to move end of season units and provide a quick and effective boost to revenue. Businesses can offer bulk discounts or singular items, or they could even approach bulk discounting in a more creative way.
A promo strategy that offers a set discount percentage for multiple unique items can help to move units that consumers may not have otherwise considered. This can be especially effective for moving old stock or for clearing products that typically experience low turnover. This structure would mean that the discount on a highly desirable item is only applicable when purchased with a secondary item (or number of items). Businesses will have more success with this strategy when complementary items are grouped within the same promo structures. An example could be a smartphone / power bank package, where a discount is applied when the two items are purchased together on Black Friday.
Discount Strategies on Loss Leaders
Stagnant stock that is held at a loss could also create an opportunity for discounting on Black Friday. Loss leader products could be offered with heavy discounts, which will bring more consumers into retail stores, creating opportunities for sales of other more profitable items. Smaller discounts could be applied to these additional items to make them more attractive, while also ensuring that they can contribute to offsetting the losses.
Some of the benefits of heavily discounting loss leaders might not be immediately tangible. Black Friday promo structures could create more interest in a retail brand, could increase foot traffic for physical stores, or could increase traffic for ecommerce businesses. Sales increases could be felt weeks or after a promotion is run, simply from the brand exposure.
Discounting Big Ticket Items
The riskiest promo structure for a business would be to discount some of the most desirable big ticket items in their inventory. Consumer electronics are hugely popular during the holiday season, however, it’s important to consider that these items will sell all the way towards the end of the 2017 holiday season. Businesses can maximize profits by offering limited stock at discounted prices. The offer could also be structured to offer a larger discount for a set number of customers, with a smaller discount applying to subsequent sales. Consumers will still have the opportunity to purchase discounted items, and businesses will limit any erosion of their profits, while still attracting interest and positive publicity.
The most important thing for businesses is to understand that they do have options in the way that they structure their promotions, whether it means offering large discounts on highly desirable items, or using discounts on loss leaders or bulk items to then feed the sales of key products. What is certain, is that businesses can no longer afford to ignore Black Friday as a key marketing opportunity, as the potential for revenue is only increasing year-on-year.