The Pitfalls of Black Friday marketing: A cautionary tale for SMEs

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Retail extravaganza Black Friday is almost upon us again, with the world’s biggest retailers battling it out for sales against a tough economic backdrop.

But whilst large companies will almost certainly benefit whatever the scenario, small and medium sized businesses could find themselves losing out on a number of fronts if they try to cash-in on the annual retail bonanza.

Regan Anderton, Head of Marketing at South London-based wholesale toy, video game and leisure SME, Click Europe, warns of the pitfalls of Black Friday… 

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Regan Anderton, Click Europe

Black Friday – or Black Friday Week as Amazon and many other retailers are now promoting, has earned a reputation as the ultimate shopping extravaganza, enticing consumers with irresistible discounts and deals.

However, beneath the surface of this seemingly lucrative marketing strategy lies a different reality, particularly for SMEs and family-run businesses.

While large corporations may thrive during this frenzied shopping spree, the impact on smaller enterprises can be detrimental to both their bottom line and their brand identity.

As someone who’s worked in marketing for two decades, and currently for a family-run toy and leisure brand, I’ve seen first-hand the impact of these sales events.

The profit margins are slim 

Small businesses operate with thinner profit margins when compared to their larger counterparts. This is why offering steep discounts on Black Friday can be a bit of a double-edged sword.

While it may seem like a great way to attract more customers and boost sales, the reality is that it can erode these already slim profits.

This can leave small businesses struggling to cover operational costs and maintain sustainability.

In fact, what may seem like a short-term boost in sales can quickly turn into long-term financial strain for these businesses.

Are you actually damaging your brand? 

By offering steep discounts, businesses risk sending the wrong message to their customers and may be perceived as insincere.

Customers may begin to question the true value and quality of the products when they are constantly on sale. This can have a negative impact on the brand’s reputation and erode customer trust.

For small businesses that rely on word-of-mouth referrals and repeat customers, participating in Black Friday may not be the most effective way to attract new customers.

Instead, they may want to consider alternative marketing strategies that highlight the unique value and quality of their products or services.

By focusing on what sets them apart from the competition, these businesses can attract customers who are willing to pay the right price for their offerings and build a loyal customer base over time.

A logistical nightmare 

The shopping frenzy of Black Friday can be a logistical nightmare for some smaller businesses with limited resources.

The sudden surge in foot traffic, online orders, and potential inventory shortages can be overwhelming, making it challenging to provide a seamless customer experience.

Any issues with service during this peak period can lead to negative reviews and a tarnished reputation, making the situation worse.

The concentration of consumer spending on a single day or weekend during Black Friday can also create a feast-or-famine scenario for small businesses.

While the immediate influx of revenue may seem enticing, it can also have a negative impact on sales that would have occurred at regular prices throughout the holiday season.

This concentration of sales may not result in sustained growth and could lead to a post-Black Friday slump for small businesses.

Consumer fatigue

In today’s consumer-driven market, where sales and promotions are a common occurrence, shoppers have become experts in identifying real deals from gimmicky marketing tactics.

With Black Friday being one of the most anticipated sales events of the year, it is easy for consumers to experience promotion overload, causing them to doubt the actual value of discounts.

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Promotion overload may leave your best customers feeling overwhelmed.

This can lead to consumer fatigue, where shoppers become sceptical of the authenticity of advertised deals.

For small businesses, competing with larger retailers in this promotional arms race can be a daunting task, and it may result in a loss of consumer trust.

As a result, it is becoming increasingly challenging for small businesses to gain a foothold in the market and establish themselves as credible retailers.

Conflicting messages 

Small businesses, particularly family-run, often prioritise community engagement, personal connections and trust as part of their core values.

However, the annual Black Friday sales events can sometimes overshadow the original message of family and togetherness.

While it is important to increase sales and revenue, participating in a discount-driven shopping frenzy can sometimes undermine the long-term goals and values of the business.

Instead, focusing on fostering relationships with customers and creating memorable experiences can be more impactful in the long run.

This can include hosting events, providing personalised experiences, and showing genuine care and attention to customers.

By prioritising these values, family-run businesses can differentiate themselves from large corporations and create a loyal customer base that values the personal touch.

While Black Friday may be a boon for larger corporations, it can pose significant risks to the sustainability and authenticity of small family-run businesses.

Rather than succumbing to the pressure of deep discounts, these businesses might find more success by focusing on building lasting relationships, maintaining brand integrity, and offering a unique value proposition that goes beyond the allure of one-time deals.

They’ll also likely find that after the Black Friday sales period ends, customers will still return to make their purchase at a full price.