Black Friday has firmly established itself as a significant shopping event in Australia, prompting small businesses to evaluate its impact on their operations. Recent research by Xero reveals that over half of small businesses, specifically 58 percent, acknowledge Black Friday as a key sales opportunity. Yet, the growing prominence of this sales day also raises questions about its implications for smaller enterprises.
Despite Black Friday’s allure, participation among small businesses has decreased this year, with only 39 percent planning to join the sales frenzy, down from 50 percent in 2022. Cost remains a major concern, as nearly 30 percent of small business owners cite financial constraints as a barrier to offering discounts during this period.
Opportunities for Growth
For some businesses, the potential benefits of Black Friday are too significant to ignore. Jared Brown, general manager of the boutique online wine store Sometimes Always, has embraced the event. He describes it as “a missed opportunity” for those who choose not to participate. The boutique views Black Friday as its largest sales event, capitalising on consumer anticipation for discounts.
Brown believes that Black Friday provides a unique chance to attract new customers while rewarding loyal ones. “There’s a bit of a frenzy around Black Friday, but we also see it as an amazing opportunity to reward our customers,” he explains. Sometimes Always has been preparing for this surge since July, focusing heavily on online advertising. According to Xero, 45 percent of small businesses find social media engagement to be their most effective customer acquisition strategy.
Using historical data to guide sales strategies is crucial, Brown notes. This approach helps predict order quantities and informs stock levels, ensuring that businesses can meet increased demand. “We work with a lot of small, artisan producers, so it’s a cool opportunity for us to place bigger orders with them,” he adds.
Challenges of Participation
Conversely, some small business owners are opting out of Black Friday, citing various challenges. Jasmine Gescheit, founder of the active leisurewear brand Jasmine Alexa, has decided not to participate this year. She took to social media to explain her decision, highlighting the financial strain that discounts impose on small businesses. “When we discount, it eats into [our profits]—to the point where there’s not much left,” she states.
Gescheit is particularly mindful of the impact on her wholesale partners. By refraining from Black Friday discounts, she aims to protect the interests of small boutiques that stock her products. “If we discount one of our bestsellers, then all our stockists that have this item feel the pressure to discount, too,” she explains.
Instead of participating in Black Friday, Jasmine Alexa will host its first in-person pop-up event in Melbourne this November. Gescheit hopes this initiative will reconnect consumers with the value of quality products and the craft behind them. “There’s a disconnect at the moment with understanding the value of a product and what goes into it,” she remarks.
Both Brown and Gescheit underscore the importance of maintaining brand integrity while navigating the complexities of Black Friday. They suggest that small businesses can leverage the excitement surrounding the event in ways that align with their values, whether through participation or alternative strategies.
As the landscape of consumer spending evolves, it is clear that small businesses face both opportunities and challenges with Black Friday. The decision to engage in this sales extravaganza requires careful consideration of financial implications and brand identity. Tools like Xero provide vital support for cash flow forecasting and inventory management, helping small businesses effectively navigate this critical retail season.
