The huge US phenomenon, Black Friday has hit the shelves! Last year, although it caused consumer chaos, it became a huge hit for suppliers and retailers that had prepared for the event.
Black Friday, usually occurring in the US, is the Friday after Thanksgiving and marks the beginning of the Christmas shopping season with a day of huge retail discounts and many retailers extending their opening hours to take full advantage of the huge floods of consumers looking to grab a bargain.
Last year was the first time the event had run in the UK with such enthusiasm, with US retailers such as Walmart and Amazon taking full advantage of unsuspecting UK customers. The day proved to be a great success, with Asda claiming to have sold a month’s worth of televisions in 45 minutes, whilst Amazon experienced record breaking sales with over 4 million products ordered that day. With such obvious success, it is no wonder that this year other retailers across the UK are following suit.
Is the event merely a gimmick? Many retailers would disagree, with the event’s gaining popularity explained by the growing online retail market and retail success stories, whilst at the same time taking pressure off the Christmas season. Indeed, it is becoming increasingly clear that by not taking part you will be missing out, with sales likely to go elsewhere.
The switch away from the traditional last minute Christmas rush to Black Friday raises questions for sales and operations planning across the festive period. Anticipating the changes to demand with events such as Black Friday is a key prerequisite to effective demand planning. A simple shift in demand to earlier on in the Christmas season can help suppliers and retailers to pace supply, handle Christmas more effectively and increase profits throughout.
Those who fail to prepare adequately are likely to be left with excess stock, increased waste and lower profits as a consequence. However, those who forecast and execute their plans effectively will benefit from increased sales, reduced waste and potentially higher margins. Carrying out such an event for the first time may be considered a risk, but the benefits are clear. The winners will be those companies which use the knowledge and experience within their supply chain team and collaborate effectively. Will you be one of the winners on the day?