My pricing friend, Courtney Rogers, recently posted advice on whether or not to participate in Black Friday. Her advice is wise. She articulates that this decision, like all tactics, should align with your company’s strategy, mission, and vision.
The article prompted me to consider why Black Friday works and which companies should participate. Since Black Friday was last week, you’ll have to remember this advice for next year, but maybe the thinking will help in some other pricing decisions you need to make.
First, why does Black Friday even happen? This may be obvious, it is the busiest shopping day of the year. Most people in the US don’t work on the day after Thanksgiving, and they want to get a start on buying Christmas presents. From a retailer’s point of view, there is a massive spike in shopping on that day. They want to get their “fair share” of shoppers. Maybe they can even get more. This is one day of the year when they should pull out all of the stops to attract shoppers. That includes price discounts. The same goes for the entire month following Thanksgiving but to a slightly lesser degree.
Now, should YOUR company participate in Black Friday sales? Besides Courtney’s advice, here are two other observations.
First, B2B companies rarely participate. Why? Possibly because there is not a rush of Christmas shopping by businesses. The rush comes from consumers shopping for Christmas presents. Hence, if you’re a B2B business, you probably don’t want to offer deep discounts.
Second, this makes sense for companies that see a big spike in sales revenue during the holiday season. Think of this as commonly gifted items. Of course, we give toys and slippers and clothes as gifts. (Did anybody enjoy getting socks and underwear for Christmas?) These are items that are on sale. But items not heavily dependent on the gift-giving season don’t participate. Most groceries aren’t discounted (more than usual.) Netflix doesn’t have Black Friday sales. If your business is not cyclical, you probably don’t want to behave differently during the holiday.
Black Friday is a unique situation. Like all situations, closely consider the decisions your customers make and the behaviors you expect of your competitors. That should inform your actions. Good luck next year!
Now, go make an impact!
