Black Friday - the last Friday in November, falling the day after the US Thanksgiving celebration - has long been a big shopping event in the US. Each year it's becoming more of a thing across the rest of the English-speaking world too, with Amazon promoting deals and customers on the hunt for bargains. But should your brand take part?
It's tempting to join the buzz. Although some early birds are organised enough to get their Christmas shopping out of the way earlier in November (or even in October, if you're my Mum), Black Friday is effectively the 'starting bell' on the Christmas holiday shopping season. It's promoted by many big brands, online and offline, and many people will have bookmarked products they intend to buy or brands they intend to return to that day, on the hunt for bargains. It's not even just a day - people now refer to the 'BFCM Weekend' (Black-Friday-Cyber-Monday), which covers the four-day period immediately after US Thanksgiving.
Maybe you don't offer discounts during the rest of the year and you may be fearful of 'cheapening' your brand by doing so, but because so many companies are discounting on BFCM weekend, it becomes more of a cultural expectation and you have a good 'excuse' for doing so without necessarily damaging your brand or seeming 'desperate' to sell.
Including some kind of special offer for your customers that weekend gives you a chance to piggyback on the general PR and chatter. Mentioning an offer in your organic social media posts is more likely to be picked up by social media algorithms, and paid ads using key terms like 'offer' and 'discount' may also be pushed a little further by the social media platforms.
Flashy ads promoting a time-limited deal naturally grab our attention, and providing you have a simple offer (e.g. 20% off sitewide), the proposition is easy to understand and implement for a potential customer.
With a BFCM offer, you can appeal to a particular type of customer: those who are specifically on the hunt for a deal. While many of your customers will buy from you entirely on the strength of your brand or unconditional love of your product, or have other considerations like wanting your product for a specific occasion regardless of the price, there are some potential customers who are only available to you via discounting. They'll hunt online for discount codes for your site, or may have bookmarked you specifically to check back on Black Friday in the hope of picking up a bargain. Discounting may be your only opportunity to ever reach these potential customers.
A final benefit for participating in BFCM is the ability to use it to manage your inventory levels in the case that these have become out of line with demand. If you've ordered big from your manufacturers earlier in the season to prepare for Christmas, but have seen slow sales in November, you may be able to shift large volumes at the end of the month and reduce the risk that you'll end up with excess stock by the end of December.
A general rule with Black Friday offers is that they need to be generous enough to count: 10% off isn't enough for most people to change their behaviour when there are better offers elsewhere, and if you're going for a sitewide discount, then 20% is generally seen as the minimum viable offer. Tiered discounts can push people up to higher spend levels by unlocking larger discounts the higher the basket value. But sitewide discounts aren't your only option - and we'll come on to alternative approaches after looking at some of the downsides of Black Friday offers.
The obvious downside here is that, all else being equal, you're bringing in less revenue per product sold. Obviously you'll need to do the calculations to make sure whatever discount you offer is actually affordable when everything is factored in.
If you're also doing paid advertising to promote your offer, that reduces your margin even further. If you're not doing paid advertising, then there's less opportunity for people to know you're even running an offer. You'll have to promote it in some way, otherwise the whole idea of a promotion is wasted, and promotion involves either hard cash or possibly significant effort in public relations and organic content creation.
There's a risk that the customers buying from you at a discount on Black Friday are customers who otherwise would have bought from you at full price, meaning you're simply giving money away. Once they've seen you're willing to sell at a lower price, perhaps they hold back on future purchases until the next offer. Or the even bigger risk is that your brand is 'cheapened', with customers feeling that your products aren't 'worth' the full price, with a true or fair value being the discounted level.
The additional customers that you do attract on Black Friday are likely to be lower value customers. They'll spend less, will often make smaller orders, and have less 'lifetime value' than customers who are happy to buy from you without a discount. In theory you could try to ringfence your Black Friday deal specifically for these lower value customers by making it accessible only via a code which is shared with them beforehand. The difficulty is that the process of using a code creates significant friction, dampening the impact of a sale, and shutting off casual browsers visiting your website on the day to see if there's a deal available.
There's a final problem of customers who buy just before an offer starts, or just after it ends. If they see they've just missed out on a deal for the exact same product they bought, that may leave them feeling some resentment towards your brand. In the case of customers who contact you complaining about this (most won't), I'd always recommend refunding them the difference so they get the full value of the offer and you maintain that customer goodwill.
I have mixed feelings about Black Friday weekend. For several years, my brand offered sitewide tiered discounts specifically on our US website (15%, 20% and 25% depending on spend level) and did a lot of promotion via paid advertising. Yes our US volumes increased a lot, but did we actually make any more money?
We can't reverse time to see what otherwise would have happened without the discounting, but looking back, I'm not sure it was worth it. While people made larger orders than normal in terms of number of products bought, the discounting meant they spent about the same amount overall. After doing this for a few years, there were definitely some people holding back to purchase on the discount day they knew was coming.
Our UK site had smaller offerings - discounting specific products where we had high stock levels - and mainly skipped the hype. There was less of a Black Friday boost, but our UK operation ended up more profitable overall for the year despite having lower initial prices.
There are different ways of structuring Black Friday weekend offers and there's certainly no obligation to take part. Some brands run 'anti-Black-Friday' campaigns, talking about why they're not taking part, while benefiting to an extent from the general hype and boost in shopping activity around the event, without actually offering any discount.
There is one way of structuring a Black Friday offer that I think avoids many of the downsides of discounting while still allowing you to benefit from the upsides in terms of increased volumes and hype.
Step forward: the bundle.
After years of doing sitewide Black Friday discounts on the US site, and product-specific discounts on our UK/worldwide site, last year my ecommerce brand switched to a bundle strategy.
'Bundles' are where you put several products together and offer them as a package for a price that's discounted from the face value of the items when bought separately. This is not the same as a "buy X get Y free" offer, where you have less control over what items customers buy and is very similar to a % discount. The idea behind a bundle is that you group related products together - perhaps around a category, or theme, or sequence of product usage.
The key thing is that the bundle is priced at a level above your current average order value, while still offering a significant discount from the face value of the component items. That way, you ensure that higher volumes compensate for some of the discounting, and can at least make a fixed $/£ amount on each order even if your percentage margin drops. At higher average order values, savings from things like packing and shipping costs may also help fund the discount.
Here's a summary of the main advantages of bundle offers:
As you can see, there are many reasons to like a bundle. Whether they're as effective as sitewide discounts will depend on your metric of success. While there was a time in ecommerce when it made sense to focus on market share and revenues above all else, I'd argue that volumes matter less than overall profitability these days.
Bundles allow you to protect margins while still offering a great deal to customers who are looking for that. My ecommerce brand, Radical Tea Towel, is already at work pre-packing ours for this year. And your fulfilment partner, whether Eirios or another, will surely appreciate a heads up on any bundles you plan to create!
