On Black Friday Cyber Monday (BFCM) in 2018, South Africans spent, more than R2,8 BILLION. To be exact, we as a nation spent R2 897 897 379. These numbers show a 15.92% increase compared with 2017 BFCM figures of R2 499 876 432 according to BankserveAfrica.
After looking at these staggering numbers, it is safe to say that BFCM is a very important day, not only for retailers but for all businesses in South Africa. Especially small businesses, because it is a day to get your products out there, capture some new long term customers and increase your bottom line for the year.
Here are a few tips to ensure that your small business capitalizes on the Black Friday madness
1. Sufficient stock levels
Having enough supply to meet the demand is obviously of the utmost importance. During the period from Black Friday Cyber Monday until Christmas time, people want to spend the hard-earned cash that they have accumulated during the year. There is going to be an increase in demand and therefore, small business owners must ensure that they have sufficient stock levels to meet the demand.
There is an obvious fear that you will end up buying more stock than you can sell, resulting in an oversupply and sitting with a surplus of stock that can not be sold will put pressure on the business’s cash flow.
We suggest analysing last year’s sales data, try and get an understanding of what the numbers looked like, and what percentage increase the business will do on Black Friday. Also take into consideration that your sales will probably be higher than normal after Black Friday, leading up to Christmas and you can always run other sales leading up into December.
In conclusion you don’t want to miss out on Black Friday sales which will affect your bottom line, but you also don’t want to have an oversupply which will result in tied up stock that will put pressure on your cashflow.
Look at your data (annual sales report) and take this into account when purchasing extra stock to meet the black Friday sales demand.
2. Ensuring your website can handle increased traffic volumes
Black Friday has a reputation for crashing websites. Even websites as big as Takealot.com.
increased traffic on your website could very well cause your website to crash or delay in response time, this will have a very negative effect on your website uses and could result in unsatisfied customers who would potentially abandon their carts, resulting in lost sales.
You can check your server’s up and download capacity here: www.loadimpact.com
3. Ensure your store can handle increased walk-in customers
Even though South Africa is slowly adopting online retail, we all know (brick and mortar) is strong and prominent. Preparing for a day like Black Friday you need to make sure your store is in good condition, organized and neatly laid out with signage, marketing material, and promotional pricing.
It might be worthwhile having a few extra staff for merchandising on the floor as well as working the tills, packing the bags, etc.
Increase security, having an extra security guard or two is also a good idea because it is going to be chaos and may lead to confusion and essentially, theft.
Having an extra manager on the floor to assist customers and ensure satisfaction amongst the madness may also be something to consider.
4. Marketing Strategy
Leading up to Black Friday it is very important to communicate with your customers, what they can expect from your business on the day.
Here are a few strategies that you can use to communicate with your customer, Depending on the nature of your business and marketing budget some of these strategies may or may not work for you.
– Word of mouth and in-store promotions, Leading up to the day. Have posters put up in-store to show your customers what will be for sale as well as train your staff to speak to each customer leading up to the day.
This strategy is very cost-effective, but be aware that if you do this too far in advance your company might experience a drop in sales leading up to BFCM as your customers will be waiting for the discounted prices.
– If you are not doing it already, we suggest that you collect emails from your customers and create a database that you can promote your offerings to. Make use of a tool called (mail chimp) to reach your customers and let them know about your Black Friday sales.
– Being a small business, most of the time there is not enough budgets for radio, TV, Billboard advertising, etc.
We suggest putting some money aside to use your various social media channels (Facebook, Instagram pages, etc) to boost content to your specific audience about the specials that you are running on Black Friday.
5. Be strategic with your discounts.
No one knows your business better than you do, but a common mistake that is made by small business owners is they tend to purchase an oversupply of their best sellers, mark them down and sell out. This cuts into their margins and hurt their bottom line.
Now, we are not saying this strategy is all bad but days like Black Friday should also be used to clear deadstock, the stock that your business has struggled to sell this year should be discounted to move and get rid of.
“Cash is King” right, No Cashflow is king – if you are sitting with stock that you have struggled to sell, get rid of it, free up some cash to purchase other stock that you know will do better.
6. Make use of short term finance
If you have less stock than you know you can move on Black Friday and over the festive season but you don’t have enough free cash flow to purchase more stock. Looking to take out a short term loan might be a viable option.
At Fundrr we provide small businesses with short term loans to assist business growth. We pride ourselves on transparency and charge a fixed monthly cost. There are no hidden fees, no orientation fees, what you see is what you get.
Our loans are between R20 000 to R500 000 in size, and range from 3 to 12 months in duration. Meaning, you can settle after 3 months and get the remainder interest charges as a discount.
For example, If a business takes an R80 000 loan over 12 months, they would pay R362,67 per day 25 days a month for 12 months but if they want to settle the remainder of the loan after 3 months they will only pay for the duration that the money was out, therefore only paying a total of R87200.
If your business has been around for more than a year, and is doing more than R1 000 000 in annual turnover or has an asset value of more than R1 million, and you are looking for capital to take advantage of Black Friday Cyber Monday (BFCM).
Please click apply here and follow the easy steps to get the capital to grow your business within 24 hours and take advantage of Black Friday.