Perform HQ associate Christine Cleaves looks at how Black Friday shows the way for effective promotions:
New research has recently been published showing that one fifth of disabled employees have had their request to work from home, be furloughed or redeployed during the COVID-19 pandemic rejected.
In a tough week for Retail my inbox is still awash with black Friday deals. All sectors from travel to fashion have taken part. From big brands to small independent retailers. Despite the commentary suggesting the end was nigh for black Friday this has certainly not been the case in 2020.
We are at the end of lockdown for non-essential retailing and any driver of demand at the moment is a necessity particularly when cash-flow has been squeezed and demand suppressed in such a challenging way.
Some of the deals have been unprecedented. Twitter was alight with push back on the very high levels of discount offered by fast fashion brands. Pretty Little Thing offered dresses from just 8p! A saving of 99% but clearly questionable in terms of the environmental impact of such disposable fashion.
There have been some retailers that have taken the decision not to be a part of it. One of the best examples is Rapha. Cycling has prospered this year and they are one of the few brands where lockdown has actually fuelled trade. Their approach to Black Friday was announced this way:
“On Friday 27th November, instead of hosting the expected sale, we will be closing all 21 of our Clubhouses around the world and 470 of our employees will be granted time off to take part in The Rapha Foundation’s Black Friday Ride. Uniting as a global community, riders will take to the road with the aim to ride a total of 1,000,000km. In turn, The Rapha Foundation will donate 1,000 bicycles to World Bicycle Relief, a charity dedicated to helping people overcome the challenge of distance through the power of bikes.”
A great initiative cleverly done. Not only does it generate a huge amount of good-will from the consumer (which let’s face it is never a bad thing) but at the same time it puts Rapha right at the front of mind through the critical golden quarter. They have received high levels of engagement from this initiative.
For most Retailers sensible discounts have been used to drive demand over the weekend. An unavoidable tactic for many retailers after years of running Black Friday events, it is incredibly difficult to remove them from a trading plan especially when carrying high levels of inventory.
As Black Friday has become part of the retail year, there have generally been two kinds of promotions:
1. Discounts on selected products, around the 50% off marker.
2. Discounts off the entire catalogue, around the 20% off marker.
Sales and promotions are crucial. Careful planning makes the difference between failure and success so here are three things you should do to make them effective.
- Plan – What are you expecting to achieve? What uplift do you expect and what can you learn from previous discounting? For example, what uplift do you need to achieve to break even if you take everything to 20% off or 50% off? The learnings from your previous events can be used to shape a reasonable projection for future events.
You should have in place a plan for units expected turnover and £Gross margin by week and most importantly a projection of the % of stock you expect to clear by the end of the event. It is also important to consider what the balance of full and reduced price trading should be This will help you to decide how your full price product should be placed.
- Execute -How do you need to display your promotion to ensure you hit the targets? If the majority of your product is on sale, this will need a very different execution to only having select lines. How are you driving footfall and demand to generate the necessary uplifts? How are you marketing your sale? What staffing do you need?
- Analyse -With a plan in place you can clearly analyse your promotion’s effectiveness throughout. If all is on plan great, if ahead it may be that you do not need to take any further discounts and you can get into full price trading quickly. On the other hand, if your promotion is not in line with your expectations do you need to discount further and can you afford to? Is your sale in prime position and is there more you could be doing from a marketing perspective to keep it front and centre of your customers mind?
With end of season sales looming if you need any help or support with planning your sale and stock more efficiently please get in touch.
At Perform HQ we have a super-bench of experienced practitioners ready to assist your business to plan and execute your business transformation. Get in touch for a free consultation to see if PerformHQ can be the catalyst to turbocharge your business change.