How small businesses can make the most of Black Friday

For consumers, Black Friday means one thing: incredible discounts. From fashion and beauty to electronics and big box retailers, nearly every category seems to go all out for the occasion as holiday shopping gets into full swing.

According to one report, Americans tend to save 24% on average with Black Friday deals. In 2022, we spent $9.1 billion shopping online during the Thanksgiving weekend sales.

And this year, the numbers might even reach record highs, as inflation coupled with holiday gifting pressure drive customers in a frantic search for a good deal.

These days, most of us think a good deal is a discount of at least 30%, according to a report from Boston Consulting Group. And this year, retailers like Macy’s and JCPenney will be offering nearly 60% off.

That number may seem high, but it’s relatively easy for a big chain retailer to pull off, especially if it means higher consumer spending overall. But where does it leave smaller businesses, which have smaller profit margins at stake as they vie for customer attention?

According to Claire Tassin, retail and e-commerce analyst at Morning Consult, small and independent retailers can’t usually afford to offer steep discounts and free shipping.

“Inflation is hitting everyone, including large and small retailers,” Tassin told Retail Brew. “While large retailers can better afford to meet shoppers where they are with cheaper products and discounts, small retailers don’t necessarily have the same flexibility.”

Tassin told us that according to a recent Morning Consult survey, “shoppers still see Black Friday as a unique event, with deals that aren’t available any other time during the year.”

In fact, 41% of US adults “believe the discounts found during Black Friday sales are unique to the holiday.”

Still, all hope is not lost for smaller retailers who want to make the best of Black Friday. Tassin suggests they continue to offer sales and incentives regardless of the competition, and forgo steep discounts in favor of selective promotions to draw in new customers.

“Small retailers should promote exclusive items or limited stock freebies bundled with full price purchases as alternatives to store or site-wide discounts,” she said, adding that for retailers “with physical stores, teaming up with neighboring shops for festive events can lean into the spirit of the holidays and drive up foot traffic.”

Small Business Saturday is one such opportunity. A 2020 survey found that about 75% of American consumers planned on supporting smaller businesses in their community.

But beyond discounts and special offers, an important factor independent retailers can use to their advantage is promoting things like high-quality items and personalized customer service, which many larger retailers can’t offer.

“Leaning into what people love about shopping independent retailers is key,” Tassin said.