How can SMEs exploit Black Friday?

Black Friday is huge for big retailers, but smaller businesses are also getting in on the action.

by Arun Kakar
Last Updated: 25 Nov 2017

The Black Friday frenzy is here and expectations are high. Much of the anticipation is around big retailers such as John Lewis, which last year had five orders placed every second. However, according to YouGov, 25% of SMEs are also looking at ways to capitalise on the big day. But how are they doing it?

‘Black Friday doesn’t have to be a big operator initiative but SMEs need to be judicious in their approach,’ says Vanessa Peters of consultancy firm Business Doctors. ‘They don’t have the financial bandwidth of the big players, so positioning their Black Friday offering is crucial. It needs careful planning.’

The risk of price slashing: Is it worth it?

In the fight to grab consumer attention, those who stand out are the ones slashing their prices the most. This is great news for shoppers, but for smaller retailers, cutting prices in such dramatic fashion can be dangerous. ‘One business we examined recently had the unwelcome realisation that roughly half of all their promotions were loss making,’ says James Brown, head of UK consumer goods and retail at price specialists Simon-Kutcher. ‘In their haste to promote, they simply hadn’t noticed.’

With only 12% of shoppers set to hunt for deals on the high streets today, much of the battle will be fought online.

Because of this, many SMEs do not see Black Friday as a missed opportunity. The American retail import has become an unavoidable fixture of the shopping calendar, but for offers to have any impact there needs to be brand awareness, or it’s simply not worth the hit to the bottom line.

‘Some smaller businesses may feel that their brand is not established well enough to reduce pricing,’ says Christian McAleenan, of online shirt retailer Christian Benedict, which is not participating in Black Friday. ‘If a consumer doesn't value a brand because it is unknown, he or she may not fully perceive the value of any associated price reduction.’

Personal approach

Those that do want to get involved however are finding that using digital and face to face channels to create a more personalised experience is one of the most effective ways to muster interest. ‘We find the best results come from specific offers to direct consumers,’ says Andy Baxter, MD of Internet Gardener.

The ability to offer the personal touch is a classic small business advantage. By targeting existing customers too, they can also cash in on trust.‘Smaller, independent outlets are able to create tailored rewards for their customers that are relevant to them on Black Friday and entice those customers,’ says Rob Meakin, MD at loyalty solutions provider LoyaltyPro.

Mining the marketplace

 Not all SMEs have the resources or ability to take the tailored approach.

‘One of the biggest problems facing small retailers during the Black Friday period is achieving visibility and cut-through in a crowded market place dominated by household names, says Samuel Dean, co-founder and CEO of Pricesearcher. ‘Consumers wanting the best deal generally go direct to a big-brand retailer or, use a price comparison website. The problem is that websites such as Google Shopping operate cost per click environments. Costs are so high, many retailers only index higher margin products not their whole stock and those without big budgets simply don’t stand a chance. 

This would explain why many SMEs  are embracing the online marketplace as a way to getting exposure which they wouldn’t otherwise have been able to attain. Handmade/vintage outlet Etsy this year is running its first ever cyber week sale with the slogan ‘save on something created by someone,’ and Amazon has a dedicated page for SMEs taking part in the festivities this year. The original  online marketplace eBay is of course getting involved too.

Using established platforms to bring people to the site seems to be the most effective option, cushioning the increased server traffic, on the back of a reputable brand name.

’Running a Black Friday deal on Amazon gives us the opportunity to showcase our product, get it in front of lots of potential customers and increase our sales,’ said Hazel Reynolds of game-maker Gamely.

Photo Credit: Kaboompics/Karolina/Pexel


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