Cape Town - Black Friday is an American tradition that has quickly taken root in Africa.
This day takes place the first Friday after Thanksgiving (25 November 2016) and is a day of big deals and promotions for American shoppers.
Black Friday is already popular in South Africa, as is Cyber Monday, the following Monday (28 November 2016) when online shoppers are out in full force looking for tech and gaming bargains.
"We also see countries like Kenya and Nigeria following suite, with e-tailers planning big discounts," says Anton van Heerden, executive vice-president, Africa & Middle East at Sage.
"If you’re a business builder with a small retail operation, you may wonder whether it’s a good idea to take part in the mayhem of the day where crowds pack shops and storm websites looking for bargains."
Van Heerden says on the one hand, it’s a great opportunity to build some hype for your small or medium business on a day that consumers are particularly receptive to spending money. On the other hand, your promotions and marketing may be drowned out by the noise generated by retailers with massive budgets for promotions and advertising.
He sees the following pros and cons:
Pro: Customers know about Black Friday and look forward to shopping for bargains on the day. There’s a high level of awareness and interest among those treating themselves or shopping for Christmas gifts.
Con: If customers expect you to have wonderful Black Friday deals every year, it might discourage them from spending money in the weeks leading up to the big day.
Pro: If you’re agile enough, have the right offers and a sharp marketing message, you might be able to attract some good business with low-cost, tactical email and social media campaigns.
Con: The competition from other retailers is intense, especially with large ecommerce sites and big retail chains offering loss-leaders to get people into their stores to spend money. It can be hard to cut through the noise.
Rid your business of old stock
Pro: It’s a great opportunity to market old inventory that you would need to mark down or dispose of, anyway.
Con: Customers are price-sensitive on Black Friday, and you could find yourself needing to discount aggressively to close sales.
Scaling up for customer traffic
Pro: You can generate a lot of footfall into your shop or traffic for your website with the right offer.
Con: You need to be sure that you have the capacity to serve the customers you attract – if your website falls over under the weight of thousands of visitors, your delivery logistics aren’t up to scratch or you don’t have stock to service demand, it could damage your brand.
Draw new prospects
Pro: Shoppers are adventurous on Black Friday, so you have an opportunity to attract new customers or to get customers to buy goods from you that they usually get somewhere else.
Con: It’s open to question how loyal some of these customers will be – they could simply be bargain hunters.
"As the pros and cons show, there is no clear-cut answer about whether Black Friday is a must for small retailers – each must look at its business needs, customer expectations, capacity and ability to execute before committing resources to Black Friday," says Van Heerden.
"What is clear, however, is that you must do Black Friday well if you are going to do it at all – or else you might end up with disappointing results and angry customers."
He says elsewhere in the world, there has been a rise of counter-movements to Black Friday - for example, Small Business Saturday. This originally started as an American Express initiative encouraging consumers to support small, local shops.
Experts are predicting shoppers will spend double the amount they did in 2015 on Black Friday and Cyber Monday this year. According to PwC, online sales will account for 77% of spending compared to 17% in stores. This means competition to attract and retain as many shoppers as possible will be all the more fierce, according to Riverbed Technology.Read Fin24's top stories trending on Twitter:
However, in order to stand out, as customers’ expectations for optimal service continue to grow, it’s no longer enough to simply offer the best prices. The key to retail success is ensuring a positive shopper experience across all relevant channels.
For traditional brick and mortar stores, this means ensuring having the latest pricing database, staff have the latest training, and customers have the latest messaging about special offers. It also translates into being agile and flexible – for example, being able to react to local demand by quickly setting up fully outfitted “pop-up” stores just for the duration of the sale period.
Most important, it’s about guaranteeing shops remain open for business and are able to serve customers even if the network to the head-office or the Internet is down. In the cloud, staying ahead is about scaling up resources in order to support an increased demand from online shoppers, and being able to quickly update applications in order to correct problems, or add new features so that customers and retail staff receive those updates automatically, wherever they are.
This is why most retailers have turned to cloud technologies in order to improve employee productivity, increase time and cost savings and improve customer satisfaction. Today’s businesses are storing information in the cloud as well as on local systems – creating what are known as hybrid environments – with 93% of retailers using cloud-based enterprise apps at work today.