4 Reasons Black Friday is Bad for Business

We have all heard the stories of those terrible customer experiences on Black Friday – where droves of customers line up the night before only for someone to possibly get injured in stampede.

 

So why is it so appealing for companies to throw away all their customer-centric values for this one day of madness? It turns out, many organizations are discovering that the benefits might not outweigh the costs, and are looking towards improving the relationship with their customers instead.

 

Courting the Low Conscious Not Loyal

You won’t be finding your most loyal customers shopping your stores or offerings on Black Friday. The red carpet is gone and instead, bargain hunters are knocking on your door.

 

Loyal customers are usually the ones that buy without discounts, but on Black Friday, companies will have to deal with the customers who are only there to purchase your “loss leader” products, and nothing else. The overall customer experience on Black Friday is surely thrown out the window, and it might even give your loyal customers a bad taste in their mouths.

 

Someone Gets Hurt

Crowd control is actually become a serious issue on Black Friday, as droves of customers camp out and race to get limited time offers like discounted flat screen TVs. Companies spend extra effort and money to support these large crowds and chaos, and when something bad happens, we are sure to hear about it.

 

Is all of this worth the bad press or possible law suit? Even if there isn’t a stampede, there are sure to be those that are disappointed by Black Friday deals and turn to social media to blast about it.

 

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Damaged Brand

Speaking about things getting hurt, your brand might get damaged in the process. Survey results by Blue Yonder, has shown that Black Friday shoppers are having poor experiences, and aren’t returning next year.

 

Specifically, 75% of those shoppers who engaged in Black Friday recalled having a less than positive experience. Bad experiences are two words the industry doesn’t want to hear, because customers can get put off easily.

 

More and more business are choosing to intentionally opt out of Black Friday completely, displaying an upward trend in spending time at home with your loved ones instead. Last year’s most famous example is REI, who intentionally plugged out of the Black Friday madness and closed its stores, encouraging their customers to get outside and enjoy nature – super authentic!

 

Another interesting view is that by pushing blockbuster sales so much on Black Friday, it devalues your brand, as customers will only be looking to spend during the small window of Black Friday. Band loyalty isn’t being developed either, as customers are just looking to purchase the product with the highest discount with no further intentions of coming back for more.

 

It looks like bad PR is is on the rise the day after Thanksgiving, and the stakes are high.

 

Low Margins

Many companies are forced into creating Black Friday deals because of consumer expectations, not by the company’s ability or offering. The competition to have the lowest prices forces business to reduce their bottom line, which means low margins.

All the extra money that goes into advertising and adding extra employees costs for this special days doesn’t always come out on top.

 

All this being said, Black Friday is surely not a total wash, if done right it can bring profits, but it may seem that the trend is slowly moving in the opposite direction.

 

It seems, in our opinion, that maybe the best piece of advice for organizations looking to join in on all the Black Friday hoopla is to possibly opt out, focus on developing the relationship with your best and most loyal customers and continuing to offer them the ultimate customer service possible year-round.

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Amy Clark is the Lead Author & Editor of IWantItNow Blog. Amy established the Customer Engagement blog to create a source for news and discussion about some of the issues, challenges, news, and ideas relating to customer service, support and engagement.
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