Understanding the Black Friday Marketing Strategy
I have changed my mind. The product I have been selling for $1000 per unit, I will now sell it for $500 per unit. What! This is a great discount-about 50% off the original price of the product! The question to be asked is very simple. It is what will you do in times like this? Know that you’ve been given capacity and opportunity to buy that product. Your reaction in this period is exactly the reaction experienced during black Friday shopping seasons.
What Exactly is the Business Meaning of Black Friday?
The Black Friday is a definite season that starts in November and ends in December when retailers give discounts to their customers to entice them to buy more products during this Christmas shopping season.
The Black Friday is a season where both the shopper and the retailer benefit. The shoppers buy products at a discounted rate while the retailers(online and offline) enjoy a large volume of sales. The accounting records change from red to black in this beginning of Christmas shopping season.
Who Benefits During the Black Friday Shopping Season?
The black friday is a marketing strategy that started long ago in the United States. It is a marketing strategy that entrepreneurs should study and know how it really works. It is a marketing strategy that has three sided-benefits.
These benefits are supported by these 2018 black Friday performance statistics;
- The National Retail Federation (NRF) stated that Thanksgiving Day itself in United State brought $3.7bn in online sales, up 28% from 2017 and was a rise of nearly 70% more than experts had predicted. It’s a great weekend for consumers in the young middle-age bracket (35-44 years old), with their average spend at $413.05, nearly $100 more than the overall average.
- According to Cnbn.com Black Friday brought in $6.22 billion in online sales, up 23.6 percent from a year ago and setting a new high, according to Adobe Analytics, which tracks transactions for 80 of the top 100 online retailers in the U.S. like Walmart and Amazon.
- In the same report by cnbc “the Friday after Thanksgiving this year was also the first day in history to see more than $2 billion in sales stemming from smartphones. Cyber Monday sales online are expected to set a new record of $7.8 billion, up nearly 18 percent from last year.”
The benefits of the black Friday marketing strategy can be explained as follows;
- Discount Benefit
- Quantity Purchase Benefit
- Data Mining Benefit
Discount Benefit: This is the benefit that the shoppers have during the black Friday shopping season because there is a great discount for almost all their purchase. That means, if it takes a shopper $10,000 to shop during the Christmas season, a discount of 50% will make his shopping total amount to be reduced to $5000, the shopper we end up saving $5000. What an amazing and a profitable season it is for everyone to shop during this season.
No wonder, this is why during the black Friday season, shoppers tend to congest the road and the queue on malls are sometimes uncontrollable.
Image credit: pri.org
Quantity Purchase Benefit:
Many people, especially business owners may be asking the question about how will these businesses make money by giving a discount as high as 50%? We all know that profit-making is a foremost goal of private businesses, so these businesses will not employ this marketing strategy if there is no profit coming from it.
During this shopping season, there is mass purchase. From the statistics above, online purchase during the black Friday in 2018 was $6.2bn. This is a transaction from a large number of people. So, the profit margin comes from selling large quantities or units of their product to customers. It is the little profit from per unit purchase that when multiplied by the number of buyers will make the profit huge for these companies.
Data Mining Benefit:
Another important benefits of the black Friday marketing strategy is that it helps to mine data from the shoppers. We know the importance of data in this Artificial intelligence and 4IR economy. It is a fact that one of the assets of a company is the customers data. With this the businesses will study and know the trend of purchase, what product has the highest sales and the lowest sales, what type of product shoppers like, and it will help them to make marketing decisions and product development decisions.
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Now that you’ve known and understood the black Friday marketing strategy and the benefits it generate to businesses and shoppers, do any of these two recommendations;
- As an entrepreneur, prepare to apply this marketing strategy. Before doing it ensure your numbers are favourable.
- As a consumer or shopper, prepare to take advantage of this shopping season to buy cheap products both from online or in store. Buy the 3S Rules today and enjoy a 50% discount.
I know you have questions to ask and comments to make about this marketing topic. Kindly ask below and let's discussion start.
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