With Black Friday around the corner, retailers will be busy preparing for the inevitable surge in sales as customers look to bag themselves a pre-Christmas Bargain.
However, Black Friday is much more than just a day, and retailers need to plan for the longer-term effects of this particular promotion. Here, retail tech experts reveal their top tips for retailers ahead of the shopping event of the year.
1. Don’t forget the product returns
A surge in sales as a result of Black Friday will inevitably bring with it a higher level of returns. “Buyer’s remorse coupled with relaxed return policies means that retailers can expect to see up to 40 per cent of Black Friday sales coming back into the business as returns and often most of this stock can’t be put back on the shelves. It’s a growing problem and many retailers will be forced to rethink their logistics processes to better manage the rising number of product returns in the coming months,” warns Ben Whitaker, director EMEA for B-Stock Solutions.
2. Location, Location, Location
For e-commerce retailers, the complexities of managing customer returns are increased due to the logistics of trading in an increasingly global marketplace, and the true cost of returns can vary greatly depending of the location of the customer. “It’s common in Germany for consumers to order multiple sizes and colours of clothing with the intention of returning the ones that don’t fit, but as a result Germany has one of the highest return rates in the EU, with around 50% of online purchases returned. Each country has its own local statutory law for returns, and the length of time it can take to get the item back and re-processed, the refund offered, and the product marketed for re-sale can be significant. It is essential that retailers account for these logistical delays in their cash flow and set up a process to recoup as much value as possible for the merchandise once it’s been returned” comments Ben Whitaker, director EMEA for B-Stock Solutions.
3. Plan for smart management of returned stock
Retailers can stop relying on just a few liquidators or middlemen to help move returned stock by launching an internet-based reselling solution. An online auction B2B liquidation marketplace that can be customised, integrated, scaled and marketed based on your unique inventory needs is particularly useful . This type of solution makes it easier to have thousands of buyers compete for inventory than it is to negotiate prices with three or four buyers’ offline. “By automating the process through an online portal you ensuring a faster sales cycle for your business, as well as access to proprietary market intelligence in the form of real data on market prices,” B-Stock Solutions’ Whitaker adds. “Now liquidation becomes a strategic asset that will benefit you (and only you) for years to come.”
4. Charities shouldn’t miss out
Black Friday isn’t just for traditional retailers and charity retailers can also benefit from the hype, providing they are smart in their approach. “The best way for retailers in any market to make Black Friday a success, in terms of sales, is to plan promotions based on an evaluation of how their stores, and other stores within their location, operate – including which products are popular, what the average spend is and how their stock is displayed” advises Alastair Petrie, managing director of BMc Azurri. “To get involved in Black Friday at the most simple level, any charity whose typical stock includes some more valuable items – such as branded merchandise, collectables or furniture – could look to make reductions to these higher-price items, pulling customers through the door and hopefully providing them with a great bargain that will make them want to return in the future.”
5. Black Friday encourages philanthropy
Some large retailers, such as Apple and Fat Face, have begun running charity campaigns around Black Friday, and the amount of focus on philanthropy that has sprung up around Black Friday also gives charities a natural edge. “With charity retailers already in the right market and the giving spirit strong across the board, it’s the perfect time of year to create some noise, bring in new customers and hopefully set up for repeat sales and an increased profile throughout the following year,” BMc Azurri’s Petrie adds.
6. Plan ahead, and plan carefully
December sales growth after Black Friday 2014 was the weakest since 2008. “Striking a careful balance between volume and margin and weighing the quick profits Black Friday can bring against the December/January sales period is critical,” explains Simon Phillips, head of business development at Barron McCann.
7. Make sure servers serve
In the last few year one of the biggest problems for retailers has been the enormous server load that accompanied the rush to buy. “Rather than investing in expensive high-capacity hosting, the ideal solution (especially in the case of SMEs) may be to turn to powerful content delivery networks like CloudFlare, Akamai and Limelight Networks to ensure that all customers have smooth and immediate access to all online facilities for the duration of the promotion,” Phillips says.
8. Deliver on deliveries
Overstretched logistics systems cause problems for many retailers and frustration for many consumers during Black Friday. According to Phillips, ensuring that delivery systems are capable to deal with the highest level of orders you can reasonably predict is crucial. “Testing them well in advance of the event will help to ensure that supply and delivery channels remain clear and fully-functional this year.”