Finance

Black Friday dilemma for retailers: ‘Not participating is often not an option’

It is especially noticeable because so many other stores have screaming posters in the shop windows: at IKEA no promotion posters or sharp discounts. BringBackFriday, that’s what the Swedish furniture chain called this day.

“We believe that Black Friday can be more sustainable. Bring your old IKEA furniture back to us, and you will receive part of the value of this furniture in the form of a voucher. You can buy a sustainable product from this again,” reads the explanation. The old furniture is sold at a discount by the store.

no competition

“Ikea can do this. It has furniture from its own brand and is therefore sufficiently distinctive. The chain does not compete with other stores that can offer identical products for a sharper price,” says marketing professor Kitty Koelemeijer.

This also applies to Sofa Company, for example, with three stores in the Netherlands. No ads here either. The Danish company launched Green Friday instead of Black Friday. Trees are planted for every item sold. “A handmade furniture company can ignore Black Friday, they have no competition like IKEA.”

consume

Stores are of course not obliged to participate in the promotions. “But then you lose customers if they can also buy the same elsewhere,” says Koelemeijer.

There is, however, a group of principled buyers who want to reduce consumption and choose a store that does not participate in Black Friday, she says. “But that’s only a small group. Consumers simply don’t have a stretchable wallet.”

In addition to idealistic companies, according to the retail expert, stores with a strong brand do not have to participate. “Apple, for example. That’s such a strong brand, the retailer margins are already small there. They are participating this year, but they don’t throw as big discounts as other electronics companies.”

No choice

Because although Black Friday has spread to fashion stores, it started with electronics. Koelemeijer: “In principle, as an electronics store you just have to participate, or you have to have super good service, as local electronics stores often have.”

Those local shops often do not have the purchasing power to buy at low prices, as Mediamarkt can do for example. “Unless they go below the purchase price. Then you can do it if you want to attract new customers, but those are often not the customers who come back.”

Low price factored in

Distinctiveness is therefore essential if you want to avoid Black Friday as a store. But how can those other stores, especially in corona time, stunt like this? “Some products are simply made together with the manufacturer for Black Friday. The low price has already been factored in. Often there are just different parts in it and they also earn something on the heavily discounted items. And it often concerns old collections. .”

Anyone who now sells a TV for 500 euros will not sell one of 700 euros to that customer in a week. Koelemeijer speaks of a ‘catch 22’, a situation in which you never get the desired outcome.

bargain hunters

“If you don’t participate, the customer goes to someone else and you miss their money. But if you do participate, you teach a customer to wait for bargains. Especially with electronics. With fashion it’s something else, you have sales in fashion buyers and collection buyers, these are separate groups.”

Various retail chains have gone bankrupt in the past decade, from V&D to Shoe Giant. Isn’t it waiting for the next bankruptcy if we all wait for the bargains?

stock

“Not necessarily”, says Cor Molenaar, economist and professor by special appointment of eMarketing and Distance Selling. “With Black Friday, stores can make money very quickly and boost turnover. Almost all the money is in the stock, if you don’t stay with that, there is a risk of bankruptcy.”

In other words: better to sell below cost than not at all. “Then you can at least pay the tax authorities and your staff. Although it is not good in the long term, to always participate in promotions. You also have to sell products with a significant profit margin.”

Bankruptcies

Continuously the lowest price will be bankrupt tomorrow, he believes. “Consumers should also allow retailers a little profit. Or do we want even more shops to disappear? It is almost impossible to compete with internet shops, especially not with the Chinese shops. But don’t forget that a store in the city also offers service that you often use online. doesn’t get.”

According to Molenaar, there is certainly a target group that is willing to pay more to get good service. “It can often be a small gesture, for example a cup of coffee that you get in the store, or a small gift at the checkout. There are people who appreciate that so much that they are happy to pay a little more.”

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