Black Friday sales are a tactic, not a strategy

Go Global Ecommerce CEO Simone De Ruosi shares what brands should consider before implementing deep discounts, and ways to reach customers outside the holiday rush.

Black Friday sales are a tactic, not a strategy
Not all products are a fit for holiday sales. (Photo by roc sun on Unsplash)

As the calendar ticks toward the end of the year, brands and retailers ramp up. Holiday shopping brings peak season for many. With shoppers out in force looking for gifts for others as well as stocking up on great finds for themselves, many in retail seek to make a big chunk of revenue. They spend weeks building the right plans for discounts on Black Friday and Cyber Monday (BFCM), and preparing systems for increased traffic.

But it might not be that way for everyone, and that's okay.

Amid the rush to discount, Simone De Ruosi thinks it is worth taking a step back. Leaders must consider whether the holidays – and all that comes with them – fits with the brand they are building. After all, it takes extra effort to stand out during this time, and that means extra investment and time spent getting ready. BFCM discounting must have an end goal, and it must be true to a brand’s aims.

“It’s a tactic, but it cannot be a strategy,” said De Ruosi, who is the CEO of cross-border commerce solutions company Go Global Ecommerce. "Managers of any organization must remember that the strategy comes first, and then the implementation.”

When that strategy is considered, it may not end up with deep discounts on the last months of the calendar year.

Is BFCM right for your brand?

As ever, it starts with who you're trying to reach. A first step is considering the typical characteristics of shoppers that are seeking out holiday deals.

“Black Friday shoppers are usually one-time shoppers on your website,” said De Ruosi. “They come there because you are cheaper than others, they compare you, they buy and they go.”

If building a loyal customer base and a community is your goal, this may not be the audience that you want to reach.

An important area to consider is the relationship a brand wants to have with consumers, and the impact discounting may have on the value it provides. There are other ways to build inroads.

Over more than 10 years helping brands like Nestlé, Kraft Heinz, and Smeg de-risk international sales and teaching as a professor, De Ruosi has a number of examples to draw from. One is an outdoors brand that makes footwear and other apparel for hiking and climbing. It makes gear that is designed to be reliable and protect users while they are in potentially hazardous areas. That function is built into the value proposition. Shoppers are not only paying for goods, but also the knowledge that it will perform and hold up.

In the end, selling items at a discounted rate to those one-time shoppers on Black Friday did not support that value. Rather, it wanted to focus on building community among hikers and climbers who were intentional about buying the right gear. Events for this community were a great strategy to see this through.

Margins are another key area to examine before moving forward with a BFCM strategy. With lots of traffic, there is the potential to bring in revenue. But when selling items at a discount, a brand must consider if they will be profitable when all the sales are made. There are entire consumer categories that are typically not high-margin, while others have great margins but may not sell in as much volume. Discounting only challenges the math, and this year's 40-year-high inflation is only likely to add complication.

Inventory is equally important. Getting access to the right amount of product that can keep up with a spike in demand is crucial, and often it must be ordered ahead. Brands must ensure they have enough to align with the offers that are made. Slower delivery times or out-of-stocks means a brand can't deliver on what it said it will do, which will dim a customer's view of a brand any time of year.

Brands must consider the channel in which they are selling, as well. If goods are going to a marketplace, ensure that policies align with the offers that a brand wants to make. Sometimes, pricing restrictions can be put into place for big events, meaning the deep discounts that brands see as the path to meeting their goals can’t be put into effect.

A year's worth of opportunity

If any of these elements are not in place, don’t fret. There are many other times when it can make sense to deploy tactics that connect with consumers. With ecommerce, shopping is always accessible. That means there are many times to reach consumers. The key is to know where your customers are, and how to reach them at the right time. The medium is more oriented toward creating moments of inspiration to make a purchase. This has had the effect of reducing the importance of one-time events. Big retailers like Amazon, Walmart and Target have apparently recognized that this year, and are holding additional events in October and early November. These retailers likely don't think they will complete all of their holiday sales before December even arrives. Instead, the idea is to reach shoppers at times when they may be interested in buying a few items, and give them many options throughout the season that can fit with their plans.

It’s also a mode that lends itself well to building community, and engaging shoppers beyond a single event. Holding a private sale around Halloween, for instance, can help to capture early demand, especially if a brand won’t be holding big discounts for the big Black Friday-Cyber Monday event itself. Implementing a game or push alert that doesn't directly mention a sale creates a touchpoint, but keeps a brand top-of-mind.

It's worth remembering that there are other times of year where focused campaigns might make more sense for some brands, too. De Ruosi previously worked with a luxury fragrance brand, and found that Mother’s Day and Father’s Day were key times to focus on promoting items for gift-giving. Discounting wasn’t necessary during those times, as there wasn’t as much price sensitivity, particularly when it came to a luxury brand. The brand also found an opportunity to offer an extra gift with purchase, such as a rose. Offering something extra is another way to stand out.

“Instead of receiving less in price, there will be more in products,” De Ruosi said.

Seasonality also makes a difference. For a flip-flop company De Ruosi worked with, peak season came in the days leading up to summer, and during the season of beaches and vacations itself. It didn’t make sense to ramp up during the holidays, because that wasn’t when demand was high.

At Go Global Ecommerce, De Ruosi works to help brands sell direct-to-consumer across borders. Different countries have different moments when it can make sense to sell. Exploring these times and how they fit with a brand is a good step to take during expansion. It can help to localize a business, even if it is from somewhere else.

In the end, it's an understanding of strategy and execution that matters than the specific tactics applied. De Ruosi sees many brands growing with a continuous pace of events and engagement efforts. After all, month-over-month gains can deliver the margins needed to run a successful business just the same as a big holiday haul.

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