Protect your Margins for a more Profitable Black Friday
Black Friday is an annual opportunity for online merchants to sell overstock to increase sales and cashflow. It marks the start of the critical sales period in retail, stretching from Black Friday through the January Sales.
With a lean Q1 predicted by IRP it is important that merchants trade well in these next two months. To do this merchants need to use their data and all their instincts to trade profitably and capitalise on the cashflow and sales opportunity.
With online markets in continual flux and Merchants juggling unpredictable traffic costs, PROFIT remains the core challenge in eCommerce.
Fewer than half of Northern Ireland shoppers plan to seek out bargains during Black Friday. But there are opportunities for merchants to do well across UK & International markets with the weaker pound. Black Friday falls late on pay day Friday 29th November, and many shoppers already have their Santa List and buying to order.
Black Friday holds less allure now for many. Savvy shoppers start Christmas shopping earlier and spread the burden from October to January.
However, it is still a high-stakes period where Merchants must contend with intense competition, alongside margin protection, to maximise cashflow and sales. Cash is needed not just for now but to get through Q1 2025. Merchants with a loose trading strategy may be in a weaker position after Black Friday.
Be Judicious, Trade Smart and Use Data
How do they trade well online? The key is to be judicious and trade smart and to use data. Data to control traffic spend, protect margins, while also creating demand through strategic discounting and bundling.
In online preparations empathy with your customer is the key. Treat your online customers as if they were in store, answer questions in a timely manner and prepare your online store with clear onsite shipping and returns messaging.
A comprehensive trading plan should be created well in advance and focus on two key areas: Website Content & Performance Marketing. Discounts are only part of the picture. Bundle products, host VIP sales events, stage daily promotions and price match competitors where you can.
This Trading plan should have a detailed sales calendar defined from now to the end of January. Emails, PPC, promotions and social media marketing campaigns should be in place to take advantage of customer demand.
Many online markets are already selling well - toys, fashion and skin care sales are trending ahead of last year. IRP data tells us that the average online merchant generates 50% of sales from just 8% of stock. For most Merchants an overall CPA% of 8% should be maintained and eGross Margins ideally should not drop below 20%.
Keep Trading! The Work and the Markets Never Stop
What’s next after Black Friday? Keep Trading! and also be mindful of the last shipping date before Christmas. After all the work and energy needed on Black Friday - the long term customer value must be derived from new buyers. The Q4 Golden Quarter is key to surviving the lean Q1 quarter. The work and the market never stops.
What is the future of eCommerce in 2025? We believe we will see the beginning of the AI Era in eCommerce. AI will begin to disrupt the industry. AI’s power is built on datasets and its purpose should be singular: “More Profit for Merchants.” This will come from AI’s potential to create more sales and reduce costs through automation.
While retail is challenging, merchants who use data, combine the human skill of empathy with the new tools of AI, will still thrive in 2025.
This article is available to view on the Belfast Telegraph website here...
