Royal Mail: SMEs are failing to prepare for Black Friday

Friday 11 September 2015

As a relatively new American import, many small to medium-sized enterprises (SMEs) are still getting to grips with the concept of Black Friday, and the ways in which they can benefit from the increased levels of consumer spending that surround it.

It is a phenomenon that occurs the day after the US holiday of Thanksgiving, when shops offer heavily discounted items. This often attracts hordes of buyers keen to bag a bargain or stock up on Christmas presents, and it is their unrestrained or desperate behaviour that tends to make headlines.

However, it doesn’t have to be that chaotic, and can in fact be very profitable for some businesses, even those that do not deal in physical goods. In fact, UK shoppers spent £810 million during Black Friday in 2014.

New research released by Royal Mail as part of Small Business Advice Week has suggested that the majority of SMEs are not adequately prepared for Black Friday, even though 60 per cent of shoppers have already started planning what they hope to buy.

The biggest challenges when it comes to dealing with Black Friday are often related to online operations. For example, during the event last year, 48 per cent of SMEs had technical problems connected to high levels of traffic on their website. In addition to this, 44 per cent struggled to manage their stock, 33 per cent had trouble with delivering orders and 31 per cent had problems with distributing goods from warehouses.

Despite the event attracting a lot of media attention last year, 60 per cent of SMEs say they are not making any special preparations for Black Friday. This figure is surprising, given the 95 per cent reported increased demand for their products and services throughout the day last year.

Roger Morris, head of Royal Mail Parcels, said: “Black Friday has established itself in the UK shopping calendar and now marks the start of the Christmas retail season. SMEs are joining the big brands to claim their share of the retail spend, but our research shows that they may be risking their reputation by not preparing in all areas of their business.”

“My advice to SMEs about Black Friday is really to start thinking about the planning today, and the planning in particular for the logistics and the delivery needs.

"You need to plan to have the item in stock, of course, and your website needs to work; but you need to be able to get it delivered. It’s really about planning and trying to share the information with us so we can make sure we have the capacity in place to make sure that we can deliver your orders for your customers on time.”

Increasingly, Black Friday seems to mark the beginning of an intense period of consumer activity in the run-up to Christmas, even though many businesses begin their seasonal promotions as early as September. While it may not be of interest to all SMEs, its potential impact on profits should not be underestimated.

Black Friday 2015 will fall on November 27th.

By Victoria McDonnell

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