There is no doubt that Black Friday and the surrounding weeks represent a significant opportunity for retailers for a number of reasons.

  • People’s appetite to purchase is significantly higher
  • It comes at a time of the year that is perfect for clearing the year’s unsold stock
  • It allows enough time before the Christmas season for orders to be fulfilled and managed
  • A positive experience with your brand on Black Friday can lead to future sales

All these advantages, however, are balanced out by a number of other considerations that are becoming even more of a challenge as the years go by and more businesses participate:

  • Heavy discounting is expected, eating into margins
  • The influx of business can create significant operational and staffing challenges that can lead to negative customer experiences
  • Huge amounts of competition vying for attention brings prices even further down, and brings marketing costs up
  • Black Friday can affect sales during surrounding months, as customers have been trained to wait for discounts

All of these factors point to a clear advantage for a particular type of business – big business. Large retailers with the infrastructure to be able to handle all these challenges without too much of an issue will reap the lion’s share of benefits from Black Friday. SMEs, on the other hand, will likely struggle a little more to juggle all the variables, and it’s likely that, by the end of November, they won’t really be sure if the entire ordeal was worth it.

The answer is in your business data

If all the variables mentioned above are measurable and the data is reliable, then, with the right setup, reports can be pulled in order to give a clearer answer. If the costs of participating in Black Friday supersede the benefits gained through revenue or brand reputation, then it might be worth opting for a less active strategy during the November period and investing effort elsewhere.

That sounds simple enough, and it is – as long as your business intelligence setup is up to scratch. While investing in a BI suite might seem like a huge expense, the insight gained from a few months of data gathering around Black Friday is likely worth significantly more than the cost of entry. Not to mention that BI software is now more accessible than ever.

Through BI, an SME can answer critical questions quickly, such as:

  • How will changing margins increase sales volumes without tanking the business?
  • Which of our available channels is most efficient?
  • What’s the eventual impact of different types of offers? Is a flat discount, a percentage discount, or a 2 for 1 promotion more effective?
  • Which of my products does it make most sense to heavily discount on Black Friday while taking into consideration stock churn data and profit margins?
  • Considering the influx of traffic (real or virtual) that Black Friday brings, what staffing strategy should be implemented in order to ensure smooth operation without overstaffing?

The visualisation of this data will even uncover details that are not so easy to foresee, even for seasoned managers, like the best opening and closing times, or the relationship between operational costs and the reduced gains after discounts. These could be inferred from per minute sales volume vs cost information that can realistically only be calculated consistently through software.

Large brands apply this type of analysis constantly and systematically – spending a bit of time analysing Amazon’s pricing strategies will give you a hint of how reactive their systems are – but now, technology has evolved to a point where these solutions are affordable regardless of business size. And not a moment too soon, as SMEs must now compete harder than ever in order to retain new customers in increasingly competitive and international markets.


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