BrainTrust Query: Black Friday Madness – A Strategy for Failure
Commentary by Doron
Levy, president, Captus
the goal of a sale is to bring people in and get them shopping, I
have to question the validity of Black Friday sales and quantity
allocations. Changes in the retail industry are creating an environment
where Black Friday sales are becoming less relevant and can actually
create short-term damage to the brand.
have to scrutinize the deal and savvy customers who understand sales
will be the first to pass on these ‘super deals’. I applaud the fact
that retailers have recently begun advertising quantities available
and have been printing conditions and limitations more clearly on
their media. Unfortunately, these disclosures only confirm low availability
and strict limits on the deals. The whole purpose of a ‘big sale’
is to bring people in the doors. Current Black Friday strategies
are flawed and create a hostile retail environment for customers.
current economic situation has also turned ‘browsers’ into ‘cherry
pickers’ as more customers scrutinize the use of their shopping dollars.
This shift in customer behavior can wreak havoc for retailers especially
when it comes to Black Friday and other sale execution.
season I was working on a project for a major club chain. To remain
competitive, they were advertising 42″ Sony LCD TVs at an unbelievably
low price. On the day of the sale, I noticed the club manager placed
the 12 units he had in stock on flatbed carts and parked them right
up at the cash registers. I asked him about that and his response
was, “We want to make it convenient for the member.” So I decided
to track the 12 units to see what would happen. Here is a summary:
9 a.m. there were 55 customers waiting for the 12 units.
9:05 a.m. the club was sold out of the 12 units.
12 units went out on their flatbeds at a loss of $400 each.
one of the 12 members purchased anything else.
the 43 that did not get TVs, 29 of them lodged complaints to the
of the customers who did not get a TV immediately walked out with
no further interactions.
three remaining customers browsed the club and walked out with
to summarize, this club (which is no longer in business) lost $4800
in the first five minutes of opening. No attempt at additional sales.
No merchandising strategy. No way to capitalize on foot traffic in
the club. Something as simple as HDMI cables were nowhere to be found.
Unfortunately, this scenario echoes many Black Friday attempts at
getting people in the door.
current economic climate has created shifts in buying habits that
retailers must understand and take action on. Black Friday deals
that are weak in terms of allocation and model availability will
not create the desired results. Merchants looking for increased basket
size and return visits will not realize those goals. Instead, you
will see Black Friday deals sell out quickly with little or no margin
intake and the alienation of the bulk of you customer base. That
will lead to medium and long-term image problems for your brand.
Questions: Do you think Black Friday deals and marketing strategies
have become flawed? How has the downturn changed their effectiveness?
What should and shouldn’t retailers be doing on Black Friday?
- Black Friday
Madness: A strategy for failure Part 1 – cueworkshops.com
- Black Friday Madness
Part 2: Failure lies in execution – cueworkshops.com
- Black Friday Madness
Part 3: Online strategy versus the physical store – cueworkshops.com