Black Friday Madness Part 2: Failure lies in execution

This is Part 2 of a 3 part series about the retail tradition known as Black Friday.

Anyone who understands retail knows why we have Black Friday sales. Aside from actually getting traffic in the door, we also want customers to purchase more merchandise while in the store. It is at this point that merchandise execution is critical if the merchant is to realize any benefit from having a Black Friday sale. Unfortunately, a changing customer has made current merchandising concepts irrelevant contributing to the decline and failure of Black Friday.

The worst customer you can get during a sale is the ‘cherry picker’. The ‘cherry picker’ is a determined customer who only purchases items that are advertised at lower than normal prices. An even more dangerous version of the ‘cherry picker’ is one understands retail pricing and goes from store to store purchasing only loss leaders. The current economic situation has turned ‘browsers’ into ‘cherry pickers’ as more customers scrutinize the use of their shopping dollars. This shift in customer behavior can wreak havoc for retailers especially when it comes to Black Friday and other sale execution.

Being used to high volumes of foot traffic can really spoil a merchant. So much so, that we’ve gone from wanting our customer to stay in our store as long as possible to getting them out the door in the quickest possible way. Last season I was working on a project for a major club chain. To remain competitive, they were advertising 42” Sony LCD TV’s at an unbelievably low price. On the day of the sale, I noticed the club manager placing the 12 units he had in stock on flatbed carts and parked them right up at the cash registers. I asked him about that and his response was “We want to make it convenient for the member”. So I decided to track the 12 units to see what would happen. Here is a summary:

 -         At 9 am there were 55 customers waiting for the 12 units

-         At 9:05 am the club was sold out of the 12 units

-         All 12 units went out on their flatbeds at a loss of $400 each

-         Not one of the 12 members purchased anything else

-         Of the 43 that did not get TV’s, 29 of them lodged complaints to the club   manager

-         40 of the customers that did not get a TV immediately walked out with no further interactions

-         The 3 remaining customers browsed the club and walked out with nothing

So to summarize, this club (which is no longer in business) lost $4800 in the first 5 minutes of opening. No attempt at additional sales. No merchandising strategy. No way to capitalize on foot traffic in the club. Something as simple as HDMI cables were nowhere to be found. Unfortunately, this scenario echoes many Black Friday attempts at getting people in the door.

We are dealing with a brand new type of customer. One that only buys what they need and only when they convince themselves they need it. They are looking for price, convenience and shopping experience to make that decision. Constant exposure to negative media has made the consumer disgruntled and unhappy. The usual low Black Friday allocation and strict limitations and conditions will only add to customer frustrations. I can easily see the majority of customers walking out of major chains empty handed when the Black Friday deals run out. And as an added bonus, the merchant has created friction between them and the customer.

If you are partaking in Black Friday, it is important to have a merchandise and customer strategy to capitalize on the additional foot traffic. Many managers are merely interested in getting the crowds out of the store as soon as possible and that does not make for good retailing.

Tomorrow: Part 3 of Black Friday Madness: Your online store is not the same as your physical store. Are you treating them the same way?