Struggling businesses advised to exploit Black Friday phenomenon

With a little strategic thinking, Black Friday could transform into a long-term reality and could in the process maximise the potential of owning a business that is permanently doing well.

This is according to Dr Yudhvir Seetharam, FNB Business head of analytics. While Black Friday was undoubtedly an exciting prospect for businesses that could not operate during Covid-19 lockdown, it was essential that SA business owners don’t view it as only that.

“For most consumers in this country, Black Friday sales are little more than an opportunity to enjoy some great savings and deep discounts on a variety of products. It’s especially useful given the opportunity it presents for consumers to stock up on affordable festive season gifts for friends and family,” he said.

He, however, explained that the Black Friday phenomenon benefits were even more significant and valuable for businesses, giving them an opportunity to significantly bolster sales revenues and, in many cases, manage and reduce inventories by moving stock that may otherwise have languished in their storerooms.

Seetharam said these bottomline benefits of Black Friday made the 2020 instalment of the event particularly relevant for retail businesses in South Africa.

“Especially given that most are in desperate need of a revenue injection after the protracted slow trading period on the back of Covid-19 and the national lockdown response. Many retailers are also sitting on significant amounts of stock, much of it acquired before the arrival of Covid-19, or even remaining from the 2019 festive period, and Black Friday presents a unique opportunity to move it to make way for new festive season inventory,” he said.

Seetharam, however, said while Black Friday sales were undoubtedly an effective way for businesses to address their immediate income and inventory challenges, few business owners – especially within the small-to-medium enterprise (SME) category – appear to recognise the potential value that they could unlock if they integrated the Black Friday principles into their longer-term business models and strategies.

He said it was understandable that businesses right now may be focused almost entirely on simply bringing in as much cash as they can, as quickly as possible.

“While Black Friday can certainly help you achieve that, it’s something of a temporary ‘band-aid’ fix to a problem that needs a much longer-term solution. The keys to a successful and sustainable business are consistency and stability of revenues, so it’s important to see the end of November for what it really is – a once off opportunity for abnormal sales volumes,” Seetharam said.

He said at face value, Black Friday was unlikely to result in sustained, long-term higher sales but should be used a springboard to such a reality.

“If that means considering making lower prices and higher volumes the bedrock of your future business success, then you need to be open to that – and for many businesses the move to a much more digital world makes this a more viable business model than it may have been before 2020,” Seetharam said.

siphom@citizen.co.za

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