Dare we say it: November…. Somehow, we find ourselves in the eighth month of the year. Now that we are fast approaching Spring, it is time for those SMEs whose trade picks up during the warmer months to start planning for The Season, which is historically marked by Black November, now less than three months away.
While Black Friday only happens on 29 November, the entire month has become a ‘sales’ period with merchants selling their wares at lower prices and discounts, possibly to move old stock, but also to give their revenue a boost even if it’s close to cost.
In 2023, Black Friday weekend failed to live up to its annual expectations, falling by as much as 12%, according to Ecentric’s payment dashboard. It monitors sales of South Africa’s largest retailers and processed more than R1.1bn in deals, although y-o-y there was a 5.06% decline in transaction volume.
Miguel da Silva, Managing Executive for Retail Capital, a division of TymeBank, expounds on what this means for South Africa’s SMEs and how best they can use the opportunity:
Understanding Consumer Behavior
Consumers are cash-strapped and are searching for not good, but great deals. Their disposable income is not as much as it used to be thanks to the ongoing cost-of-living crisis. SMEs need to note that their customers or prospects are searching far and wide for the best price. What this means for SMEs is that they can cut their prices to meet the market’s demands, but this could very well just cover costs. However, if an SME is in financial trouble, getting any money in to help cover overheads is a bonus – they just must not undervalue their products too much as it’s hard to hike prices again when the time comes.
Cutting Wholesale Costs
Finding a way to cut wholesale costs now can pay off come November. This may be a good time to look around to see if there are other suppliers who can match the price the SME was accustomed to. To make Black November work for you, renegotiating now with suppliers or finding new ones is key.
Driving Ecommerce Traffic
SMEs with ecommerce sites need to drive as much traffic to their sites as possible – and then convert. This requires investment and an understanding of what is holding their site back from performing at its best. With competitors like Temu and Amazon having bullishly entered the retail market, it’s even more critical for local SMEs to ensure that their websites work properly, that there is no friction in the user and payment process, and that – outside of the site – the delivery is quick and seamless.
Moving Old Stock Strategically in Black November
Among the positives of Black November is the opportunity to move old stock. If it didn’t sell at full price after it launched, and is now taking up space at a factory, warehouse or rented garage facility, at a cost, Black November allows business owners to put these items on sale to recoup their money and even forego the need for the storage.
As said above however, SMEs must avoid devaluing their brand and should not go below cost even if tempted to because it could have negative consequences down the line as customers will continue to want deep discounts for non-sale goods.
“Black November has become fully entrenched in the South African shopper’s psyche. They want and hunt for deals. Use the opportunity wisely and don’t sell out due to desperation. Get your house in order now and ensure that whatever you can do to improve your on- and/or offline service is attended to now, and not left too late in the year,” da Silva concludes.
