Opinion: How to avoid Black Friday turning into ‘out-of-stock Saturday’

From a logistics perspective, that can avoid Black Friday success negatively affecting a profitable festive season.

Prices plummet during Black Friday and Cyber Monday, making consumers more prone to impulsive buying.

This positively drives conversion rates but it also generates a significant spike in returns.

Online shopping in particular fosters a ‘buy now, regret later’ culture, with the buzz of securing a bargain diminishing by the time the item arrives.

This causes all kinds of logistical issues for retailers as stock typically arrives back in warehouses mid-December – right in the middle of the critical Christmas trading period.

Our data indicates that the cost of returns this year could reach £130m, and if items cannot be sold on at full price, or sold on at all, the profitability of Black Friday and Cyber Monday promotions begins to decline rapidly.

What’s more, the spike in returned goods mean stretched staff can find themselves being pushed further as shoppers bring back unwanted items to bricks-and-mortar stores; not to mention consumers expecting to process click-and-collect buys.

Once items are received by staff, they are often relocated away from store shelves, simply because the workforce is focused on getting Christmas orders out of the door.

This can result in a misalignment between demand and availability, where stock is stuck waiting to be processed and allocated to the appropriate channel where demand lies.

By the time stock is replenished on store shelves January Sales have begun, meaning that inventory is marked down and margins lost when it could have been resold at full price before Christmas.

Retailers must resist using Black Friday and Cyber Monday to shift problem products

To overcome this potential obstacle, retailers must prepare for the Black Friday returns rush and avoid an ‘out-of-stock Saturday’ in the lead up to Christmas.

By increasing staffing levels and ensuring as many staff are trained on processing returns as practically possible, it will allow for a more efficient turnaround and for profitable sales to continue.

Retailers must resist using Black Friday and Cyber Monday to shift problem products – for example, ‘toxic’ products represent just 7% of stock but are responsible for up to 40% of all returns.

In a bid to top last year’s performance, it is essential that retailers and their staff do not overlook the customer.

As stock is halted in the returns loop it can leave up to £160m worth of items unavailable for purchase and leave stressed gift-buyers empty handed.

To maintain customer loyalty and satisfaction, retailers must address this ‘returns pressure’ to enhance consumer experience where possible – be it through positive in-store customer service or well-stocked shelves with demand easily accessible.

A bad experience can lead to customers leaving damaging feedback in real time on social media or online reviews, which can go viral and will remain in the public domain for future shoppers to see.

Retailers need to analyse past data and insights to progressively learn from experiences and improve year on year

Retailers also need to understand that loyal consumers may alter their purchasing behaviour in the run-up to Christmas. The intensity of gift shopping for loved ones may lead consumers to explore alternative channels and stores.

Businesses must appreciate these changes in order to market and sell to their new target audience.

Perhaps, most importantly, retailers need to analyse past data and insights to progressively learn from experiences and improve year on year.

When it comes to returns, retailers need to understand why certain items become ‘toxic’ and create a strategy that ensures more purchases are kept by customers.

This will help to further drive profits, build on return on investment, and prevent returns from becoming this year’s Christmas Grinch.

• Vicky Brock is chief executive of returns intelligence company Clear Returns