For many retailers and e-commerce companies, Black Friday is a really big deal. Also for us consumers. From its cautious beginnings 50 years ago, it has become a global phenomenon. It’s a shopping party like no other – turnover this Friday is typically many times what it usually is. American consumers spend more than 20 times more, while, for example, Pakistan spends 115 times more!
Then we also have Cyber Monday which has more or less merged with Black Friday. And not least Black Week. And sales seem to have peaked in more mature markets and more is happening online.
There is no automaticity in succeeding with Black Friday
On the one hand, we as customers are increasingly better informed – we can check out competing prices in a flash, so our already aggressive pricing suddenly doesn’t have to be good enough. And if it is a price-sensitive product, it can have an immediate effect on sales. Secondly, we as customers are now exposed to both high electricity prices and rising interest rates, so it may be that what we have to trade for has shrunk. But, precisely for that reason, there may be many who hunt for offers this year – Virke/Kvarud analysis expects that in Black Week there will be sales of NOK 16.1 billion, of which NOK 3.2 billion on Black Friday.
Although there is a decrease of 10% from where we were before the corona epidemic, 61% of chain-affiliated businesses are planning campaigns in this year’s Black Week. So it is obvious that this is important for Norwegian retail and e-commerce businesses.
This is how you succeed as a supplier on Black Friday
The end customer today is better informed and more competent in smart online shopping than ever before. There are high expectations for high discounts – and a high volume of goods in the stores. Those who succeed in this have probably done their homework and focused on e.g. these steps along the way:
- Ability to turn around fast!
- Enough in stock
- Stress test
- Have a buffer
- Have the crisis team ready
When it comes to Black Week/Black Friday, you can’t plan well enough. Simply selecting the right products, finding price points, estimating increases, planning the supply chain and making supplier agreements at the right time requires process and system support, not least within Demand Planning and Supply Chain Planning.
Ability to turn around, fast!
Black week and Black Friday are difficult to plan. And suddenly there is mention in social media that is in your favor – or maybe not. This means that you must have the ability to throw yourself around and manage up/down the expected campaign demand, orders and transport capacity to your stores within minutes. Here, your Supply Chain Planning system – or in a good Norwegian purchasing system or goods supply system – will play a key role.
Your best deals must not be sold out on Black Friday!
Since we now have Black Week, and for many also Black Month, it can be tempting to sell goods ahead of Black Friday. Being sold out of such blockbusters can lead to strong reactions and negative publicity, as, for example, the American chains Target and Walmart have experienced. Estimating volumes correctly to be able to predict in-store inventory on Black Friday itself is a Supply Chain Planning activity that has proven increasingly important.
Stress-test your supply chain!
The short window of deep discounts can create huge demand and break even the best supply chain. Unfortunately, when the demand and volumes hit you, it’s too late. So being able to simulate with different forecast values, order volumes, stock levels, picking capacity is absolutely essential for you to be able to simulate in advance until when and where you reach the capacity ceiling and thus be able to take it into account in advance.
Make sure you have a buffer!
It is difficult to meet the demand on Black Friday. The challenge is often that where your stores cannot be replenished throughout the day, you need a buffer that is much larger than what you have room for on the shelf. Estimating – and allocating – the extra volumes you need to have in the back room or backup storage can be the key. Your Supply Chain Planning system will be an important helper for you here.
Have your crisis team ready
Crises can – or rather will – arise in Black Week and Black Friday. Your Supply Chain Planning team is a key player here. When you have to throw around and plan an entire category across channels and regions districts, your Supply Chain Planner is a key player!
After Black Friday and Cyber Monday, we will take a look at how things went this year and how retail experienced success, lost sales, and overstock, and frustrated customers.