13 November 2023 | Published by Jodie Wilkinson
Although Black Friday initially has its roots across the pond in America to mark the Friday after Thanksgiving, the occasion has gone global and has fast become a huge shopping day here in the UK too. In recent years, Black Friday has also spurred the creation of ‘Cyber Monday’ and ‘Cyber Weekend’ – where e-commerce businesses can cash in by offering huge savings and discounts online across a three-day period, creating a weekend retail phenomenon.
Having firmly cemented itself in the retail calendar as a peak period for traders, businesses must put in the prep to ensure they’re getting a slice of the pie. That’s why we’ve run the numbers to bring you our key insights from Black Friday spending in 2022 and spoke with Jodie Wilkinson, Head of Strategic Partnerships here at takepayments, to share their top tips for how you can get ready for one of the biggest shopping days of the year.
Here’s what we found:
First things first, make sure you’ve got enough supply to meet demand.
The latest research from Finder predicts that while customers in the UK are estimated to be spending £900 million less in 2023 than 2022, there’ll actually be more people this year looking to bag a bargain.
“Given the current economic climate forcing many people to tighten their belts over the last year, it’s no surprise that this is expected to continue over the festive period,” predicts Jodie. “While savvy shoppers hope to cut back on their overall spending, we suspect that businesses may actually see an increase in customers hoping to secure savings – potentially giving way to more purchases but with lower average order values.”
Jodie says: “Black Friday and Cyber Monday aren't just busy days; they're a litmus test for your inventory management. We've seen small businesses succeed by not only stocking up but also by smart stock planning. Identify your anticipated best-sellers – and it’s worth considering your higher-priced items, too, as shoppers usually look to save the most on the things that cost more – and ensure you have enough inventory to avoid disappointing customers. Remember, a sold-out sign can sometimes be more damaging than a slow day of sales."
Of course, on a day like Black Friday, it’s impossible to predict precisely how well sales will go, and it’s almost expected that the first through the door will get the best deals. But, if you can keep sales going for as long as possible with ample stock, you’ll boost your profits for the day.
And if you overdo it? Consider sticking the excess items online for Cyber Monday.
Contact your suppliers ahead of time and find out when their next delivery date is after Cyber Monday; that way, you can let your online customers know when they can expect a restock of any items they couldn’t secure on the day.
Yes, you want a piece of the action and to boost your bottom line as much as possible by making the most of this extravaganza, but, and it’s a big one, don’t get so caught up in the mania that you end up leaving yourself short.
“Profit margins can make or break your Black Friday success,” says Jodie. “Try to think less about wildly slashing prices; it's about strategic discounts. Analyse your costs, including overheads, to determine your discount threshold. Use historical data from your previous year to anticipate the influx of customers and adjust your pricing strategy accordingly, ensuring profitability isn’t compromised."
Every business is different, so taking the time to understand what your customers want and how low you can go to satisfy their needs can mean the difference between a successful or regretful Black Friday.
So you’ve thought about your stock and the discounts you want to run, but there’s another crucial bit of planning you should consider. While some businesses may see a surge at the stroke of midnight, others may find their customers more active during different hours of the day or in the weeks leading up to or after the event.
“Each industry has its own prime time during the Black Friday frenzy,” advises Jodie. “At takepayments, our data underscores the importance of aligning your sales and marketing efforts with these peak periods to capture the most traffic and sales.”
Our data from 2022 highlighted that businesses selling clothing, electronics, household goods, and, interestingly, travel agents tend to see the biggest surge in spending on the actual week of Black Friday itself rather than the week of Cyber Monday. Whereas those in the hospitality industry, including bars, nightclubs, restaurants, supermarkets, and the entertainment sector, saw higher spending in the week of Cyber Monday instead. While those in the hospitality sector might not offer traditional Black Friday offers like retail businesses, it could still be worth preparing for the increase in spending.
“It’s essential to analyse your specific industry trends to pinpoint the optimal times for your promotions. Historical sales data, social media buzz, and even your competitors’ activity can offer valuable insights. Putting in the groundwork to time your sales strategy with these peak times can result in higher conversion rates and a better customer spread, reducing strain on your operations and ensuring a better experience for your customers.”
Also, don’t forget that you want your customers to come back and buy from you again. If you put all your products on offer, what’s to stop people buying everything they like in one go at a discounted price?
That’s where Jodie’s strategic discounts come in. Select the items you’ll be reducing ahead of time and leave everything else at full price. This way, Black Friday will bring the consumers in, and they may buy your full-price items at the same time as the discounted ones or come back for them at a later date.
“This approach can also help to increase or keep your average order value relatively consistent while still delivering the deals that your shoppers are looking for,” says Jodie.
Remember that your customers are expecting some great deals (so much so that over half of UK adults stated that they were disappointed with Black Friday promotions in 2022), so balancing your profit margin with what discounts you want to offer has never been more crucial for customer satisfaction. And every business knows that customer satisfaction leads to loyalty.
"Marketing is not just about reaching out; it's about standing out. During Black Friday, every business is vying for attention,” reiterates Jodie. “In our experience, the best way to connect with an audience is by knowing what matters most to them and appealing to their interests.”
For example, today, consumers across all generations are now willing to spend more on sustainable options. With shoppers becoming increasingly environmentally and socially conscious, campaigns that speak to these values will be particularly effective.
“Invest in targeted marketing campaigns that highlight your unique selling proposition and how it relates to your audience. But, it must be genuine. Consumers can easily tell when a business’s ‘values’ aren’t entirely accurate and when it’s just a marketing ploy. Authenticity, especially by proving how and why customers can connect with a business, is key to success,” explains Jodie.
Use all your digital marketing channels to get your presence known ahead of the big day, drum up interest and keep your company at the forefront of your customers’ minds.
This doesn’t just have to be an online effort either; you could also change up your shop window display for Black Friday to catch the attention of those passing by and let them know what offers you’ve got running.
The allure of Black Friday sales can lead to an impressive surge in sales, but with that may comes the reality of an increase in returns and refunds. Planning for this contingency is a critical aspect of your Black Friday strategy that can impact customer loyalty and your bottom line.
Jodie weighs in on this, "it’s estimated that 1 in 3 shoppers return what they buy on Black Friday, totalling approximately £30 million in unwanted goods, so businesses should expect that their sales and profit won’t settle until well after the Black Friday period is over.”
While the thought of refunds skewing your profit margins can seem daunting, it’s simply something businesses cannot skimp on.
“Under the Consumer Rights Act 2015 and Consumer Contracts Regulation 2013, consumers must legally be able to return unwanted goods online and be able to return damaged items purchased online or in-store. These two legislations protect customers’ rights when they purchase from you, so as a business, you must have a proper returns policy in place.”
“A clear and customer-friendly policy can make the difference between a one-time shopper and a lifelong customer. And the Black Friday period is a quintessential time to make sure your returns policy is up to scratch.”
As there is no foolproof method of eliminating the chances of returns, the best course of action is to use the situation to turn a potentially negative interaction into a positive one.
"Take it as an opportunity to show you value customer service by making the process as simple and hassle-free as possible. You might even want to consider extending your return period from 30 to 90 days to include the festive period, as many consumers may be shopping ahead for Christmas presents," suggests Jodie. "This level of service, especially during such a busy period, will not go unnoticed."
Last but certainly not least is how you allow your Black Friday and Cyber Monday customers to pay. Once you’ve gone to all the effort of putting on an unmissable day, the last thing you want is potential customers abandoning their cart because they can’t pay the way they want to – and studies show almost 50% of consumers would.
Our own research previously found that cash payments are on the way out, with chip and pin, contactless and mobile payments taking over in popularity, so be sure your payment systems are up to date and can accept these methods.
Jodie’s top tip for facilitating online payments this Black Friday is to broaden your horizons with Buy Now, Pay Later (BNPL) financing options: “Buy Now, Pay Later has been transforming the e-commerce shopping space, and as of 2023, over one-third of UK shoppers have used BNPL. Businesses can expect that to spike over the Black Friday period, which falls just before payday for many consumers, and people may look to financing options to temporarily cover the cost of their shopping.”
While there are plenty of considerations for businesses as they gear up for Black Friday, the season of shopping is also a peak time to factor in consumer safety.
Research from Barclays Bank revealed that the reported number of purchase scams increased by 34% following Black Friday and Cyber Monday in 2022, with £1,072 being lost on average per person to scammers.
“For businesses, it’s paramount to ensure you have the proper security measures in place on your online storefront during busy shopping periods like Black Friday. These include implementing 3D secure authentication and ensuring your site is HTTPS-enabled,” says Jodie. “It can also be useful to raise awareness of some common scams that your customers might encounter, to help them stay vigilant and avoid falling prey to offers that seem too good to be true.”
Here are some ways customers can stay safe this Black Friday:
Scammers will use the increase in consumer shopping to ramp up fraudulent activity in the hopes of conning innocent customers out of their cash. While tactics like phishing emails and Amazon scams are always something to be on high alert for, we’ve outlined some reported methods from 2022 that people should watch out for this year.
The bogus emails or texts might include fake discount codes and a link to the ‘retailer’s’ website to view the code – but the link will instead take customers to fraudulent websites to steal their sensitive information.
“Some of the biggest tell-tale signs of bogus promo emails are if they’re sent from a suspicious email address that contains random letters or numbers and generally don’t look very official. Also, if the copy is littered with poor grammar or spelling mistakes, it’s a sign that it’s not from the actual retailer,” explains Jodie.
“Of course, clicking a link in a fraudulent email can take customers to a fake website to encourage them to enter their order number or personal information.”
Shoppers should be extra wary of phishing emails from delivery companies like Royal Mail, DPD, and Evri around Black Friday for this reason and double-check who the messages have been sent from.
“Shoppers should always be wary of any out-of-the-blue emails they receive, especially if they’re from brands that they haven’t subscribed to. Always avoid clicking on any links in any suspicious emails,” advises Jodie.
Learn more about some of the most common scams circulating today here.
Most legitimate websites will have customer reviews on their site, often hosted through trusted review platforms like Trustpilot. Customers should always check for positive reviews on a website before purchasing, particularly if they haven’t bought from that brand before. The same goes for selling platforms like Amazon and eBay.
“Reading reviews for sellers can indicate if they are a genuine storefront,” says Jodie. “No evidence of reviews is more likely than not a bad sign, and people should avoid spending money with that business.”
Finally, using common sense and trusting a sneaking suspicion or instinct can be one of the most valuable tips for avoiding scams this Black Friday.
Fraudsters will use massive discounts and savings to attract attention and encourage people to interact with their scams – but it’s usually all a ploy. If a sale or deal sounds too good to be true, it’s a sign that it probably is.
Preparing your business for one of the busiest peak periods of the year can be daunting, but if you put in the right work ahead of time, it can be extremely rewarding and pay you back in kind.
Want some extra support when it comes to taking payments? That’s where we come in.
To get the ball rolling, get in touch today on 0808 274 2017.