Here, Dominic Allon, Europe vice president and managing director of Intuit QuickBooks, tells small retail owners how to ensure that the Black Friday and Cyber Monday sales work for their business.
The mammoth sales weekend of Black Friday and Cyber Monday is drawing nearer. For UK retailers, it can be an exciting, yet scary time. Last year, UK shoppers set new records; with total sales on the Friday reaching £1.1bn and £968m on the Monday.
While it has proven to be a success for some big-name retailers – Black Friday helped John Lewis hit its biggest ever week of trading last year, as both online and in-store sales soared by 15.5 per cent – not all retailers are so happy to see the sales weekend roll around again.
For small retailers who don’t have their own logistics network – or the number of staff or appropriate website infrastructure to handle such high in-store or online sales volumes – the impact of this weekend can be severe.
Here are the five key things that owners smaller retail organisations should consider when preparing their business for the Black Friday and Cyber Monday spending weekend.
1. Giving the right discount
Big retailers have the money and ability to add larger mark-ups to their products, so there is still room for them to make a profit even when an additional discount has been added, while many small retailers may not be able to afford to drive costs down further.
Shop owners must be smart with the discounts they offer and make sure they are still able to make a profit whilst remaining competitive.
2. Buy first, return later
Yes, consumers are more willing to buy over this weekend, but that doesn’t mean they are willing to keep.
An increase in sales does also, in many cases, mean an increase in returns. Smaller retail owners must think beyond the weekend and factor in the chance of returns into their finances, otherwise they could fall short when predicting their profit and loss.
3. Buying stock is a balancing act
Buying from suppliers may be costly, and on normal days when the shop isn’t as busy, having two of every item in stock may just be enough. However, more shoppers are expected on the high street during this bumper sales weekend, so having enough stock in store to cover extra sales is crucial.
Use data from previous years to understand what is likely to sell, and buy enough stock to keep customers happy. But, do bear in mind that going overboard and not selling risks problems for your cash flow.
4. Having to rely on others
Unlike larger retailers, most small business owners do not benefit from having their very own logistics service that can adapt to the demand over the busy period.
Instead, retail owners must rely on external services that are already busy with multiple other suppliers.
Small retailers must offer customers a guaranteed delivery time that aligns with what their courier service can offer.
Introducing a slightly longer delivery time over the busy period could help with the demand and keep your customers satisfied.
5. Plan, predict and manage
No matter how big a business is, the key to success over the Black Friday weekend is preparing for every eventuality.
It should not be weeks in the planning but months, and failing to have a complete overview of your finances could stop you in your tracks.
Having a holistic view of your finances that monitors all money coming in and going out is crucial to surviving the weekend of extra sales and extra returns.
If you play your cards right and plan for every outcome, your small retailing business can reap all the success of this long weekend of serious spending.
Dominic Allon is Europe vice president and managing director of Intuit QuickBooks.
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