Bleak Friday?
Let’s start by taking a look at just how different this year is likely to be. In England, lockdown restrictions mean that only essential retail stores will be able to open their doors on Friday 27 November, while others are able to offer a click and collect service only.
With such restrictions in place, it should come as no surprise that fewer people are planning to take part in Black Friday and Cyber Monday 2020 compared to 2019. A study by UK consumer comparison site Finder found that 39 per cent of adults plan to make a purchase this year, compared to 42 per cent last year.
However, the same survey also found that whereas the average person spent £251.20 on Black Friday in 2019, that figure is set to increase to £295.67 in 2020. That 18 per cent rise will send the total Black Friday and Cyber Monday spend to £6 billion in the UK, up from £5.6 billion in 2019. So, despite continuing economic uncertainty as a result of the ongoing pandemic, there’s still plenty for finance teams to prepare for.
Of course, we should remember it won’t just be retail finance teams bracing themselves for a bumper Black Friday, with supply chain firms, logistics companies and manufacturers all set to benefit.
It goes without saying that finance teams need to be at the top of their game throughout the entire year, but Black Friday marks a particularly busy period for retail finance pros and suppliers to retail, that tends to run right the way through until the January sales. It can be a period that makes predicting profit and loss challenging. Here’s our roundup of the top three things for finance teams to consider:
Inventory & stock management
Stock levels can increase significantly at this time of year, and with so much unpredictability in the retail sector, there’s arguably never been a more important time to closely monitor your inventory and stock management processes.
For finance teams to be able to make smarter sales and purchasing decisions in the buildup to Black Friday and Christmas trading, they need to know exactly what inventory the business holds at any given point, have access to up-to-the-minute valuations and be able to check on how quickly it’s moving.
Having inventory management software in place that integrates with the company’s nominal ledger and sales and purchase ordering can provide the visibility that’s needed for finance teams to make informed choices.
Automation
There are numerous benefits to the automation of processes, allowing businesses to work more effectively, produce better quality data and save time. Tasks like the management of payroll, expenses and other processes that require inter-departmental working can be handled much more efficiently.
For retail, particularly ecommerce firms, swift responses during the online sales process and less delays overall, including the faster processing of payments, will help improve the customer experience. In turn this will help increase brand loyalty and drive up sales – music to any finance teams’ ears.
To put this into perspective figures from The Institute of Customer Service in the UK show those receiving ‘excellent’ customer service can spend up to £53 more with a brand, with nine out of ten citing ‘excellent’ service on Black Friday means they would shop with a particular retailer again.
Reporting
Black Friday is largely considered the starting line for the main Christmas shopping season. In 2020, it’s set to be a largely online affair, with the Finder survey finding that two thirds of shoppers (66 per cent) intend to make their purchases online, compared to 56 per cent in 2019. Regardless of where the sales are coming from, it’s vital that regular and retail-time reports are provided to ascertain the financial health of the business.
Finance professionals need to be able to quickly and easily monitor and analyse business performance, with access to live dashboards to facilitate real-time reporting. Visibility will lead to informed decision making by helping you find the answers you need quickly and accurately.
This is obviously important for up-to-the-minute decision making but also helps greatly with forward planning too. It will allow for more precise forecasting and identifying areas of the business that need greater investment. For example, if a business sees the vast majority of its sales online this year, there’s an argument for more of a focus on the digital experience.
Black Friday 2021
It’s no secret that the retail sector starts planning for Black Friday and the Christmas sales period months in advance. As we approach Black Friday 2020 in what has been the most unpredictable of years, it may be the time for reflection and forward planning to make the 2021 event the most successful and financially controlled Black Friday to date.
Find out more about The Access Group’s financial management software