European retailers already had plenty to concern themselves with in the final quarter of each year before Black Friday became an annual event that required marking on their calendar.
The post-Thanksgiving deals-driven day in the US has now established itself in the UK and across Europe – and it’s causing headaches for some retailers in terms of meeting customer expectations and ensuring operational efficiency at their busiest time of year.
But bringing forward some Christmas shopping revenues to late November can have positive effects on any retailer’s supply chain, as long as the process is carefully managed and strategies are set in line with their wider commercial goals.
What does success look like?
Black Friday best practice is when a retailer delivers on its customer promises, offers accurate stock information online and in-store, and achieves all of this without too much disruption internally – while generating healthy sales and margins.
All of this must be done at what is typically a make or break time of year for businesses in the sector, with Christmas just around the corner.
A number of retailers had their fingers burnt a couple of years ago, when they were unable to meet unprecedented demand for their services on Black Friday, and that has resulted in deals and promotions being extended to a week-long period – and, in some cases, even longer. Although this is a sensible approach, retailers shouldn’t let their supply chain constraints dictate how they serve customers.
It’s all about accurate forecasting
Instead, by scientifically factoring in these limitations, understanding which products will perform particularly well at this time of year, and being excellent in reaction to demand, retailers can successfully navigate their way through this tricky but potentially lucrative period. This is where machine learning can truly have a powerful impact.
Artificial Intelligence (AI) can play a key role in helping retailers prepare for peak season, adding to the many areas of the industry where this technology is having a transformational impact. Embedding AI into a retailer’s processes can bring retailers all-important efficiency around the Black Friday period.
Using historical sales and other real-time influencing factors in the demand planning process, retailers can be confident the right stock will be available at the right time – at the right price – and that will set retailers apart from the crowd and help meet customer demand.
Embrace the halo effect
Black Friday is an emotional time for shoppers, with people in offices, pubs and homes all keen to share their purchasing tactics and bargain-hunting strategies. It’s a real talking point, so delight them during this period and they could become long-term customers.
And as some retailers showed last year, including Argos and Dixons Carphone, investing time and effort in Black Friday generates additional marketing, which can create a halo effect that encourages purchases of full-priced goods or more considered Christmas shopping.
Blue Yonder has worked successfully alongside retailers to help them prepare for and manage Black Friday. Using solutions that provide an accurate view of what success entails, based on data-driven insights, retailers can understand which products sell well and the price-points that best boost conversions.
At such an important and busy time on the calendar, retailers should be recruiting more people to serve the inevitable increase in customers – and complementing that resource with AI to maximize that investment in manpower and make Black Friday pay all-year round.