Business Owners: Want to Offer a Black Friday Deal? Here's How.
Small-business retailers may not be able to match the Black Friday extravaganzas offered by the big-box stores, but there are certain things they can do to compete.
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When small-shop retailer Tabitha Geise decided to participate in Black Friday in 2011, she wasn't sure whether there would be a payoff. Co-owner of The Purple Platypus, a brick-and-mortar children's specialty-toy store in Lewisburg, Penn., Geise ran her "sale" – 15 percent off one's total purchase – only between 6 and 10 a.m., during which time she scrutinized customer behavior to assess shopping patterns. Geise had her eureka moment.
"I noticed how the Black Friday customers who came in during those hours shopped," she says. "They didn't browse, they knew exactly where the items they wanted were on the shelves, and they paid quickly."
Revenues during that four-hour span were surprisingly substantial and, the following year, Geise doubled her revenues in those early-morning hours. This year she plans to do it again, and now uses full signage in her store windows highlighting the event. Her mantra? "I stick with my regular merchandise, and don't bring in new products to offer just for that one day," she says. "Typically my Black Friday customers gravitate to what they know I stock."
Geise seems to have found the sweet spot: matching deals to the clientele's shopping habits. But can small business retailers ever match Black Friday extravaganzas offered by the big-box stores?
"Most entrepreneurs with physical or online retail establishments simply don't have the financial resources to do what the huge national outfits do," says Dan de Grandpre, CEO and editor-in-chief of DealNews.com, an online aggregator of consumer retail deals. "Larger stores buy bulk goods which become rock-bottom-priced deals which lose money. Entrepreneurs can't afford these kinds of losses, so they need to rely on the smarts that made them become entrepreneurs in the first place."
Here's some advice on how to offer a Black Friday deal.
1. Make it impossible for people to bypass your store. If you're a cupcake maker, create or decorate your cupcakes in the window, says de Grandpre. "Large retailers know the value of the doorbuster to lure customers inside. Essentially, entrepreneurs who conduct even a small aspect of production in public serve as their own doorbuster and may invite foot traffic."
2. Let your customers' shopping preferences guide you. On last year's Black Friday, Tatiana Chemisov, co-founder and co-owner, with her husband Peter Chemisov, of My Little Jules, an online girls' clothing and accessories boutique, knocked 15 percent off her customers' final order. That decision came about because she asked her Facebook fans to participate in a survey. "Our shoppers voted for a percentage discount, rather than price-reduction discounts," says Chemisov, whose small company competes with Amazon.com and Garnet Hill.
3. Manage your inventory. It's critical to have enough stock, says de Grandpre. "The last thing you want is to run out of product when you could be making sales."
4. Never underestimate the element of surprise. One hugely popular Black Friday offering for Chemisov keeps her customers in the dark. She sells her unidentified "surprise gift" item, valued between $25 to $100, for $15, with customers simply inputting their size and seasonal preference. Last year, she sold 161, a large number for her relatively small operation. It's on her list this year, too. "Customers told us they were thrilled with their top-quality, name-brand items whose retail value were way over the $15 they'd paid."
5. Be tech-prepared. If you haven't touched base with your IT consultant for a while, do it now, says de Grandpre. "You want a surge in online business to increase revenues, not crash your web site."
6. Bolster your customer service. Even though Black Friday is primarily about generous discounts, some consumers still look beyond savings. "Smaller brick-and-mortar retailers should be totally focus on providing customers with a Black-Friday shopping experience that fuels strong word-of-mouth," says Lisa Haddock, Ph.D., a small business consultant and adjunct professor of marketing at San Diego State University.
Haddock underscores the necessity of having well informed sales people and enough personnel manning the registers. She also suggests serving upscale food and refreshments or, if appropriate for the store, wines or spirits. "Whatever happy customers can tweet or text about is good for business," says Haddock.
In the end, post-Thanksgiving retailing is as much about establishing relationships with new customers as it is about making sales. "The key is to be memorable, and often the way to do that is experiment to see what works," says de Grandpre, noting that time to make an impression is in the entrepreneur's favor. "Black Friday is no longer a day. It's a season."