Black Friday frenzy: Do the benefits for retailers really outweigh the negatives?
Business strategist Jon Cherry argues that the benefits of Black Friday season are tenuous, even for the big players.
Black Friday sales. Wikimedia Commons/Gridprop at English Wikipedia
John Maytham is joined by business strategist Jon Cherry on The Afternoon Drive.
South Africa's consumers are gearing up for the frenzy of Black Friday, although many retailers have been running specials ahead of the big day already.
Thanks to consumer interest in Black Friday sales, more than R88 billion in additional economic value is expected to be generated for November 2024, according to fintech Capital Connect (based on Bureau of Market Research insights).
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Figures for 2023 suggested that R26.6 billion was added to the retail industry as a result of Black Friday last year.
In conversation with John Maytham, business strategist Jon Cherry says it would be interesting to know how much of that actually translated into profit.
He argues in a piece for Daily Maverick that the benefits of this annual event are tenuous for retailers, even the big players.
For a retailer, Black Friday and running the actual sales mechanisms of the sale is expensive, Cherry points out.
"Most big retail systems are set up for a slow and steady sales process."
"It's not set up for massive jumps in demand at any time of the year, so when you have a large influx of shoppers coming in to look for bargains, that's going to be incredibly stressful for the systems, as well as for the people who are instore and at the warehouses."
Jon Cherry, Business Strategist
What is often not recognised in the stats, is the levels of returns, as people caught up in the frenzy perhaps buy things they don't necessarily want.
"That again puts an enormous amount of strain on a retailer who's meant to be gearing up for the Christmas trading period."
Jon Cherry, Business Strategist
In his opinion piece, Cherry asks whether it's not a more prudent approach looking to the future of Black Friday, to balance the opportunity of a short-term promotional window with longer-term brand-building aspirations.
Scroll up to listen to the conversation, and click here to read Cherry's article