Black Friday and Cyber Monday are almost here.
The two biggest shopping days of the year are just around the corner. For consumers, it’s a great opportunity to save big—and for businesses, it’s a chance to drum up sales and finish the year on a high note.
And although inflation has led to higher prices among most goods and services in 2022, this year’s Black Friday and Cyber Monday are still poised to be huge revenue-generating opportunities for businesses. With 88 million consumers spending a cumulative total of $8.9 billion during Black Friday 2021 in the U.S. alone, it is once again expected that Black Friday and Cyber Monday will be big events—despite inflation and economic downturn.
To capitalize on consumers’ willingness to spend over the American Thanksgiving weekend, businesses need to be prepared. And leading the charge to help their organizations succeed are FP&A teams. So we’ve put together this blog to help finance teams like yours best prepare for Black Friday and Cyber Monday 2022. We’ve got tips, best practices, free Excel templates and more so let’s get started.
When Is Black Friday 2022?
This year, Black Friday will take place on Friday, November 25. As is tradition, Black Friday in 2022 will occur on the day after U.S. Thanksgiving, which is Thursday, November 24. For many, Black Friday marks the beginning of the holiday season—although you may have heard Mariah Carey’s “All I Want for Christmas is You” at least a dozen times by the time Black Friday rolls around.
Since retailers typically discount their products and services heavily on Black Friday, it can be a great opportunity for consumers to complete a lot of their holiday shopping ahead of time—and save money while doing so. Or you can wait until December 23 to do all your shopping and hope that Amazon Prime follows through on its “next-day delivery” guarantee (warning: this can cause a lot of stress). We recommend the former.
When Is Cyber Monday 2022?
Cyber Monday will take place on Monday, November 28 this year. Cyber Monday falls on the Monday following U.S. Thanksgiving and although its roots aren’t as old as Black Friday (the term Cyber Monday was first used in 2005), it has quickly become one of the biggest shopping days of the year. Similar to Black Friday, Cyber Monday is both a great opportunity for businesses to boost their bottom line and for consumers to save on products and services.
So what is the difference between Cyber Monday and Black Friday? About 72 hours, for one. But in reality, the events are quite similar in that businesses typically discount their products and services heavily on both days. Historically, the main difference between Black Friday and Cyber Monday has been that Cyber Monday sales were typically only available online, not at brick-and-mortar stores. But with most businesses giving consumers the option to purchase products online, there is very little difference between Black Friday and Cyber Monday in 2022.
Why Black Friday and Cyber Monday Are Vital for Your Business
Black Friday and Cyber Monday are important for businesses because they are golden opportunities to cash in on the buying frenzy. Consumers are eager to spend during Black Friday and Cyber Monday, the two biggest shopping days of the year. To illustrate just how big Black Friday and Cyber Monday are, check out the following stats:
- In the U.S. alone, consumers spent $10.7 billion during Cyber Monday in 2021
- In 2021, American consumers spent $8.9 billion on Black Friday
- In the U.K., consumers spent a total of 9.42 billion British pounds over the course of Black Friday weekend
- The average discount during Cyber Monday 2021 was 26%
So if you work in the finance department at a company that will be participating in Black Friday or Cyber Monday deals, it’s important to be able to plan for the potential impact that sales can have on your bottom line. To that extent, there are two important tools to have at your disposal:
1. Scenario Analysis
Performing scenario analysis (also referred to as what-if analysis) allows your finance team to model different scenarios so that you can understand the impact of these scenarios on things such as revenue, expenses and cash flow. For example, you could model 3 different scenarios:
Scenario 1: You discount your products by 25% on Black Friday and Cyber Monday and expect to see a 250% increase in sales.
Scenario 2: You discount your products by 40% on Black Friday and Cyber Monday and expect to see a 300% increase in sales.
Scenario 3: You discount your products by 60% on Black Friday and Cyber Monday and expect to see a 400% increase in sales.
Each of these scenarios will have a different impact on your bottom line and with scenario analysis tools, you’ll be able to project how each scenario will affect your business so that you can make the best possible decision.
2. Revenue Planning
Planning your revenue for the next month, quarter and year is a crucial part of just about every FP&A team’s job. After all, revenue is a key indicator of an organization's financial health—and understanding your revenue metrics in detail allows you to make decisions around product lines, marketing spend, hiring and much more.
And whether you’re in the sports industry, retail sector or any other business that expects to participate in Black Friday and Cyber Monday, it’s important to have revenue planning tools that can bring data from all your sources together to give you a complete picture of all your revenue sources.
Tip: To stay agile, be sure to implement rolling forecasts as opposed to the older, more traditional static forecast model.
FP&A Tips To Prepare Your Business for Black Friday and Cyber Monday
So how can your finance team help prepare your organization for Black Friday and Cyber Monday? We’ve put together a list of tips and best practices for FP&A teams—and included free Excel templates to help with your planning:
1. Project Your Revenue
As was mentioned earlier, it is important for FP&A teams to track, project and report on revenue. Missing revenue targets are not good for any business, especially those that are publicly traded where not hitting quarterly or yearly revenue targets likely means a decline in share value and increased scrutiny on the company’s leadership team. FP&A teams need to be able to project revenue with confidence, not just for events such as Black Friday or Cyber Monday, but for every month throughout the year.
To help you, we’ve created an Excel template for revenue projections that you can download today for free.
2. Create a Detailed Expenses Budget
From increased marketing spends to additional advertising dollars, your organization is likely planning to spend money on promoting your Black Friday and Cyber Monday deals. To keep track of everything, you’re going to want to create a detailed expense budget. Doing so will ensure that you know exactly how much money you’re spending and where the money is being allocated. This will help you calculate things such as ROAS (return on ad spend) and understand which marketing levers you pulled generated the most revenue and best ROI.
Download our free Marketing Campaign Report Template for Excel today to track the performance of all your ad campaigns.
3. Plan for Staffing Costs
While most companies focus on expenses for marketing and advertising for Black Friday and Cyber Monday, they sometimes forget about the increase in staffing costs during these busy shopping periods. Maybe you need to hire additional staff to work your retail stores or hire an additional developer to ensure your website is ready for Black Friday and Cyber Monday. Whatever the case may be, engaging in workforce planning allows you to understand how your labor expenses, among other costs, will affect your business’s bottom line.
If you’re looking to manage all your labor expenses in one place, download our free Workforce Planning Excel Template today.
4. Prepare for Multiple Outcomes
Hope for the best, prepare for the worst.
It’s a good mentality for FP&A teams who are in charge of helping guide the business into the future. While Black Friday and Cyber Monday can be a huge boom to an organization's revenue, it’s also important to prepare for a scenario in which your sales don’t quite hit expectations. As discussed earlier, this is where scenario analysis comes in handy. Modeling out best- and worst-case scenarios helps your business stay agile and prepared for whatever the outcome may be.
Get your free What-If Analysis Template for Excel so that you can forecast your financial future with confidence.
The Biggest Retail Event of the Year Is Nearly Here
In summary, Black Friday and Cyber Monday are the two biggest shopping events of the year and by incorporating these best practices and taking advantage of our free Excel templates, your FP&A team will be able to prepare your business to the best of your abilities. Whether it’s projecting revenue and marketing expenses or modeling different scenarios, finance teams should be at the heart of every business’s strategy for Black Friday and Cyber Monday.
See for yourself how Vena—the only native Excel Complete Planning platform built for Microsoft 365 with Power BI Embedded—can help you plan for Black Friday, Cyber Monday and beyond with confidence.