Black Friday: From Retail Therapy to Big Business Strategy
One of the biggest holiday traditions from a business perspective is that of Black Friday shopping. Originating in the United States, Black Friday has a varied history, but most attribute its name as referring to the first shopping day of the year where retailers go from operating in the red, to turning a profit. Black Friday marks the official beginning of the holiday shopping season, and through the New Year retailers remain overwhelmed with busy holiday shoppers, with 30% of all retail sales taking place during this crucial time.
Beyond the holiday glitz, the shelves of new products, or the discount pricing, lies deep strategy that has been studied and planned for all year long. In a modern economy, retailers have had to remain flexible to shifting consumer behaviors, competing for that all important shopping dollar while being sensitive to the changing demands of their customers. A brief study of Black Friday, it’s rise in popularity and the way it has shifted over the years gives great insight into the benefits of strategic planning and execution for any industry.
The top lessons retailers can teach the rest of us about business strategy include:
A Willingness to Adjust
Retailers often find themselves at the crossroads of every trade wind that blows. Profits can depend on anything from unemployment numbers to the price of gas to natural disasters to what day of the week the holidays fall on that year. And all of that before they’ve even considered what the competition is doing.
These kinds of dramatic ebbs and flows require a level of flexibility and agility rarely seen in the corporate world. Yet a quick study of Black Friday practices over the last 10-15 years demonstrates just how well retailers stay ahead of trends. For example, online shopping has significantly altered the face of Black Friday – changing the shopping holiday from one day to four – beginning with Black Friday, moving to Small Business Saturday, and ending with Cyber Monday. Predictions say that 92% of all shoppers will purchase online this holiday season. There was a time when cyber selling seemed to signal the death of traditional brick and mortar stores, but retailers’ ability to adapt and find new ways of reaching customers has ensured their longevity.
A Close Eye on Competitors and Customers
Retailers live and die by customer expectations. While customers are king in any business, it is never more true than in a retail environment where the stakes are high and the competition is a click away.
Regardless of your business, you can take a page from the retail world’s undeviating focus on competition and consumer expectations. Take, for example, back in 2013 when the traditional Black Friday schedule of opening in the wee hours of the morning started to drift earlier and earlier. Some department stores were choosing to open midday on Thanksgiving Thursday, the crowning jewel of American holidays. At first, retailers vied to see who would be first to throw open their doors. But now, three years later, a large percentage of retailers have opted out of infringing on Thanksgiving, citing a desire to let employees have a much needed day off. While magnanimous, they were also responding to a significant consumer backlash that insisted Thanksgiving should be a time set aside for family.
Companies can learn a thing or two from the retail industry’s ability to spin a situation in its favor, serving customers while at the same time subtly thumbing their nose at the competition.
Highly Regulated Systems
Retailers track everything. At any moment, top stores around the world can drill down sales data to the year, the month, the day and even the hour. They know which location performs best, how to adjust merchandise based on mitigating circumstances (ever notice the stand of umbrellas that makes its way to the front of the store during a rainstorm?), and how to keep a customer engaged the moment they walk through the doors. This isn’t by happy accident – this kind of knowledge comes from a calculated and highly regulated approach to analyzing data, predicting behaviors and executing planned strategies.
Businesses of all types can learn from this devotion to structure. Whether your job is to sell a product or provide a service, whether your company is a global conglomerate or a small mom-and-pop, attention to detail and a well-defined systematic approach to daily business practices can provide direct results to your bottom line.
The world of holiday shopping offers a great case study for businesses looking to better incorporate strategic planning into their best practices. If the volatile and competitive world of retail can adjust to numerous threats and opportunities, so can your business take advantage of strategic execution to influence bottom line success.