Ensuring Black Friday doesn’t accidentally put your business in the ‘red’
Opinion piece: by Tennille Bell, General Manager: Sales at Programmed Process Outsourcing (PPO)
Black Friday has become a global shopping phenomenon, characterised by an annual spending spree by shoppers on the fourth Friday of November, with some retailers extending to Cyber Monday, and others even running month-long special deals. While physical brick-and-mortar and eCommerce stores are considered ‘front-end’ for shoppers, there’s a frenzy of back-end activities that need to take place in order to meet the surge in consumer demand accurately, timeously and efficiently.
For South African businesses to truly take advantage of the shopping frenzy and make a success of the event, they need to ensure that their entire supply chain is geared to handle the seasonal spike. Business Process Outsourcing (BPO) can be the answer. A BPO model is accessible to businesses large and small. It is a cost-effective and scalable means of guaranteeing the necessary behind-the-scenes service and productivity to ensure an experience that meets customer expectations while increasing loyalty and keeping businesses in the black.
From the US to SA – Taking place the day after Thanksgiving in the USA, Black Friday was conceptualised to give businesses the chance to move “out of the red” and “into the black” – to turn a profit. Many other countries followed America’s example, launching their own Black Friday sales. According to a GeoPoll survey, 76% of South Africans reported participating in Black Friday shopping in 2019, which jumped from 64% the year before. 2019 also saw a number of SA retailers promoting not just Black Friday, but a week or even a full month of “Black November” specials.
In 2020, the pandemic interrupted every aspect of life as we knew it, and Black Friday spending was, accordingly, very lowkey. However, in 2021, Black Friday sales showed promising signs of recovery. Despite a lockdown still being in effect, there was a 120% increase in spend on electronics, with banking giant FNB reporting that its cardholders spent a whopping R2.5 billion on the day, and payment gateway PayFast reporting a 34% increase in transactions.
South African reality – Practically speaking, Black Friday is the start of the year-end festive buying, as many consumers start shopping for holiday gifts in November. As much as businesses want to jump on the Black Friday/Cyber Monday bandwagon, a fine balancing act needs to be achieved. While it might be great to sell out in November, it’s important for businesses to have stock that can carry them through the Christmas rush and Back to School periods. No use selling out at discounted prices in November and not being able to turn a profit for the rest of the year.
Underprepared and overwhelmed – Many South African businesses that choose to participate in the Black Friday/Cyber Monday period underestimate the massive shift in buying behaviour that takes place. It requires a massive increase in productivity and performance, which entails additional resources to cope with the extra load. All of which is a massive ask for the management team of any business, who then has to ready an additional staffing complement and train them up to the required standard. Needing more hands-on deck then puts additional strain on other aspects of the business – from HR to finance. Every department or business function of the organisation is impacted.
Think carefully and be realistic – The decision to partake in Black Friday/Cyber Monday is not one that should be taken lightly. Businesses need to ask themselves “What’s the worst that can happen?” and then take those scenarios seriously. The worst that can happen is that staff cannot cope with meeting the additional demand. From there, it’s all a ripple effect. If customers experience any delay in their orders, there is the risk of reputational harm. An increase in pressure and stress for staff leads to an increase in absenteeism, which further negatively affects operations.
It’s also important for businesses to be realistic in what they can expect from their own staff, and what is achievable given their own infrastructure. For example, in a warehouse with only 20 confirmation tables – the physical space where orders go to be checked before they’re sent out to customers, it is only physically possible to confirm 20 orders at any given time, which can lead to a backlog in tasks, which then affects the remainder of the productivity chain and then compounds as tomorrow’s problem.
Outsourcing for success – This is where a BPO partner can make the difference between a business being in the black or plummeting into the red. Wherever the business requires additional resources, a BPO provider has access to a wide pool of fully trained workers across the entire value chain, that can step in and augment any given business process in the commerce space. These can be allocated and deployed into the business as needed, and because they’re paid on a per-unit basis, their productivity is guaranteed for the period that they are required. There is no productivity lost in training, nor is there any additional strain on any other business function, as the BPO provider handles payroll, human resources, industrial relations and all aspects of employment relating to the workers required to meet fluctuating customer demands.
It’s not just about increasing headcount to handle the extra load. It’s about having properly trained resources available to boost productivity and meet customer demands. This contributes to a consistent customer experience that fosters brand credibility and customer loyalty. BPO assists in improving efficiencies and effectiveness through reducing and eliminating waste, decreasing operational costs and most importantly increasing profits. For this to happen, businesses must choose their partner carefully – only a compliant, results-driven BPO partner whose focus is on boosting productivity and streamlining operations can give retail and ecommerce businesses the flexibility and performance they need to come out tops this Black Friday.