- Luxury brands steer clear of deep discounts during Black Friday, instead, paying close attention to customer service and in-store experiences for consumers.
- Black Friday offers small brands a unique opportunity to get consumers used to shopping full price without the expectation of markdowns on excess inventory.
- Disruptors such as Everlane highlight charitable causes aligned with their company ethos rather than slash prices, thereby increasing brand loyalty.
With the holiday season fast approaching, retailers around the country (and now, increasingly around the world) are preparing themselves for Black Friday sales. The inaccurate origins of this shopping holiday which takes place the day after Thanksgiving in the United States, have reached mythical proportions. In the 1950s, police in Philadelphia began to use the term to describe the mobs of suburban shoppers that would burst into stores after feasting on turkey. These crowds set out to find discounts bringing with them an influx of shoplifters, according to the History Channel.
Although the term originally had a cynical connotation, it became popular and was reclaimed as a positive marketing event by retailers around the country by the 1980s. Today it’s practically synonymous with sales and has become an annual tradition for customers hoping to purchase the latest tech gadgets or clothing at a fraction of their original cost. Once relegated to the local mall or department store, luxury retailers have had to incorporate this occasion to remain competitive in an already crowded marketplace. Independent brands must make airtight decisions about how to operate during this sales period taking a page from luxury brands since their identities are similarly aligned. Yet small brands must forge their own path given their proportionately smaller access to resources, overall brand recognition, and inventory.
Luxury retailers have had to adapt to savvy consumers on the hunt for a deal, despite the notion that steep markdowns are antithetical to luxury fashion. A 2017 report by Bloomberg stated that the luxury sector saw the highest volume of price reductions over the Black Friday weekend. These discounts are often found at department stores or online retailers rather than at the flagship stores, according to Forbes. Unlike mid-tier and contemporary labels, the discounts are “rare and modest with 25% off in one corner; an extra 10% off in the next,” says Business of Fashion. Instead of inciting large crowds, high-end labels seek to reward their loyal customers but keep the integrity of their brand. For this reason, instead of slashing prices, you might see luxury labels keep their stores open for longer hours during this period. Another example of how these brands galvanize consumers is by producing a full price item exclusive to Black Friday. This generates excitement for consumers without tarnishing the reputation of the brand.
The average Black Friday consumer sees this time as an opportunity to save on coveted items they may not be able to justify purchasing the rest of the year, while the affluent consumer views this sales period entirely differently. This event “is more so about saving on high-end goods and services that are valuable to one’s quality of life—items and experiences that truly embody the notion of ‘Happy Holidays’” according to a report by Mascola Group. Yet the pandemic has shifted buyer behavior, with even wealthy shoppers becoming more vigilant with how they spend their money. Many customers are interested in purchasing items that build memories or evoke emotions, rather than merely denote status like in the past. Luxe retailers must appeal to the sensibilities of their loyal patrons while taking into account that their priorities have shifted. Convincing consumers to spend as much money online as they once did in-store or how to get orders to their doors before the upcoming mail service backlog has been the key focus of the 2020 retailer holiday strategy.
Brands must use clear messaging with shoppers, to emphasize that Black Friday prices are the final markdown on items and that they will not be reduced further. Customers have been inundated with sales due to the fashion market’s shrinkage as the recession continues, so it’s vital to grab their attention through effective communication.
In recent years, some brands have deviated from the standard Black Friday business model, eschewing marketing that deliberately promotes panic buying and inevitable mass returns as well as overconsumption. By offering in-store engraving or customization Hermes is able to bring in customers to Neiman Marcus, without offering a discount. Purchases feel more special and memorable this way, according to Vic Drabiky, founder of January Digital. Other brands such as Everlane, the direct-to-consumer company founded in 2011, have donated a percentage of sales to various charity causes rather than offering their customers discounted wares. The company founder points out, “if you’re discounting at one point, that just means that you’re raising prices at another point, throughout the year,” in an interview with The Financial Times. Similarly, Patagonia and REI also do not offer sales during Black Friday instead, urging customers to spend the day with their families. By aligning Black Friday marketing with a brand’s core values customers are able to emotionally connect with companies that they feel reflect their own beliefs. Consumers that are invested in eco-sustainability will appreciate the charitable efforts made by brands such as Everlane and Patagonia, potentially turning them into devoted customers after the sales season. Small brands should not co opt Black Friday archaic marketing tactics such as slashed prices as these were developed for Big Box retailers. For brands that often already produce limited batches of inventory and are usually high-margin companies, devoting significant business resources to Black Friday can be detrimental.
Despite the pressure for small labels to incite shopping urgency in customers during Black Friday, labels must remain cognizant of how to best promote their products without devaluing their identity. Recognizing both the limitations and advantages of a small line, creators can make apt decisions for how to operate during this frenzied period. Much like the luxury sector, independent brands can offer a minimal discount as an incentive, or offer distinctive experiences such as personalization of their products. Brands may better utilize this time to strengthen customer relationships by taking stands for social causes. By making charitable donations in lieu of discounts for shoppers, brands can get a boost in publicity while remaining profitable. The ongoing recession and global pandemic have changed consumer behavior for the foreseeable future with many more people shopping online. It’s crucial for brands to come up with solutions for multi-item online orders that may ship from different remote warehouses. Informing customers of potential extended delays in shipping during this holiday season, and offering alternatives like in-store pickup is a must. Clear communication and exceptional customer service are essential for any small brand to succeed during this year’s Black Friday events and beyond.