Photo: Karen Sandison/African News Agency(ANA)

JOHANNESBURG – Black Friday is coming up (23 November), a day when consumers rush to online and physical stores in their thousands, hoping to secure too-good-to-be-true, never-to-be-repeated deals and save money on their Christmas shopping.

Typically a US tradition, Black Friday gets bigger every year in South Africa: in 2017, sales increased by 2571% over 2016. Small businesses may feel they need to take part or suffer from a major case of FOMO (fear of missing out).

Yet while Black Friday is a chance for businesses to enjoy a quick sales boost, many small businesses lose money on the day because they can’t compete with larger retailers. That’s not to say they shouldn’t take part, but they need to adopt a strategic approach. Black Friday is not about out-pricing the big guns, but is rather an opportunity to clear stock, reward loyal customers, and gain new ones.

The biggest challenges for small businesses on Black Friday are creating awareness, ensuring their technology is up to the task, and creating pleasant and frictionless customer experiences. Get these right and they’ll have customers for life.

Uneven playing field

Damned if you do: Small businesses are under pressure to offer deals that rival those of large retailers. Yet they can’t match the clout, stock levels, nor budgets of the bigger players – and they can’t afford to reduce their prices. If they try to keep up with larger retailers, they’ll almost certainly make a loss.

Damned if you don’t: Black Friday and Cyber Monday have changed consumers’ shopping habits. Rather than buying Christmas gifts throughout December and cashing in on January sales, shoppers hunt aggressively for discounted Black Friday deals. There’s little money left for December and January shopping, which could further hurt small business profits.

Middle ground: Use Black Friday to clear out-of-season or surplus stock. This will make space on your shelves for new inventory and gives you an immediate cash flow boost.

Technology demands

Damned if you do: Every year, more shoppers choose to avoid the crowds and shop online. The spike in website traffic puts servers and payment systems under immense pressure. Large retailers have budget for extra tech support, server capacity, and IT resources; small businesses don’t. If their website crashes on Black Friday, they could receive unwanted negative publicity on social media.

Damned if you don’t: An online store increases a small business’s reach, allowing them to sell to customers in other cities or countries. Offering online sales on Black Friday attracts new customers, even if they are only bargain hunters.

Middle ground: Encourage regular customers to create wish lists and then email them if you discount an item on that list. Schedule deals throughout the day to better manage traffic volumes. Create a sense of urgency with countdown clocks and show how many people are currently viewing an item. This encourages shoppers to move through the buying funnel faster. Improve the load time of your site by compressing images, simplifying forms, and running extensive load tests beforehand.

Frazzled shoppers

Damned if you do: Customers are excited, impatient, and a little irrational on Black Friday. They want to bag their deals and move on to the next. It’s a stressful time for small businesses and their staff, who will likely take some abuse on the day.

Damned if you don’t: Black Friday is one of the most talked-about shopping events of the year. Shoppers who get good deals will tell their friends, family, and online networks – even more so if they had a good experience (or a bad one).

Middle ground: Make shopping as easy and pleasant as possible. Offer samples in store and extra discounts to loyal customers. Make sure your logistics partner can manage the increase in deliveries and simplify your returns process. Offering a personal touch is how small businesses can out-shine larger players. They may not show their appreciation now, but they’ll reward you with repeat business later.

If you're shopping this Black Friday, set some money aside to also support your local traders on Small Business Saturday (24 November). You'll pick up unique gifts you can’t find at large retailers. And don’t ask for a discount. It’s tough running a small business and Black Friday makes it harder to get through the last few months of the year.

Viresh Harduth is vice president: new customer acquisition for Sage Africa & Middle East.

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