Since the 1960s in the United States and for a decade in many other countries in the world, the black friday It is a day when everyone seems to go crazy about shopping. This consumer ritual is celebrated on the Friday following Thanksgiving (the fourth Thursday in November), so this year it will be November 26.
This article does not seek to explain the origin or history of this day of sales that, according to the study The logistics of e-commerce of the Spanish Logistics Center (THE), has become the most important before the Christmas campaign. Rather, we intend to expose the reasons that lead consumers to buy massively during the black friday.
Price and discounts
The use of price as a promotional tool (through discounts or rebates) is nothing new: its origins are almost at the beginning of the promotional and marketing activity of companies.
One of the first aspects to take into account is that, from a marketing point of view, although price management is a very common strategy, its effect on the income statement is not always clear.
Price reductions have an almost immediate impact on the seller’s profit margin, reducing it (margin effect). For this effect to lead to positive results, the price reduction must be offset by a greater number of units sold (volume effect).
It is quite common to use designated days or dates to offer discounts and rebates but the black friday, or its close cyber monday, have become a global phenomenon of great significance since they are not limited to a specific chain or a specific place. A large number of establishments in many countries of the world join the same proposal.
From the field of psychology and consumer behavior, there are several reasons that justify the success of these days or periods of sales.
First, from the point of view of price perception, when a consumer is offered a discount in his mind, two opposing forces converge:
The attraction that involves a lower economic sacrifice (lower price to pay).
The suspicion that buying something cheaper can generate when price is normally used as a signal of quality. The consumer may think: “they sell it cheaper because they cannot sell it at its normal price or because it is worth less than what it cost at its non-discounted price”.
Second, factors related to the perceived risk of missing an opportunity, economic analysis in terms of cost-perceived benefit, or the individual propensity of each consumer (their sensitivity to price) have been commonly identified as Key aspects to explain the different response of consumers to this possible conflict.
Value and price
The conflict between discount and value is resolved when the consumer attributes the drop in price to another reason. If the discount is related to a special circumstance, such as the company’s anniversary, the consumer may consider it justified: the company is celebrating and shares with its customers through discounts on its products.
The use and consequences of this reasoning are explained through the attribution theory, which analyzes the way in which individuals explain the events that they observe or that happen to them according to how they perceive them and to what they attribute their causes.
In the field of price perceptions, various studies have shown that the attributions that a consumer makes to explain a price drop or a discount can be key to their response to them, since they influence courage and justice received from the offer.
Thus, while the consumer can make negative attributions to an unexplained discount (which will undermine their purchase intention), linking the sales to a special event paves the way for the purchase by giving the consumer a rational justification for that discount, without undermine the reputation of the company.
On the other hand, discounts on technological products (of great relevance on days like the black friday and the cyber monday) often have a reason for being. Normally the prices of these products are reduced since their launch in a staggered way. Experts call this sequential price skimming and it is due to the loss of momentum in sales as the novelty (both technological and commercial) of the product passes.
In this sense, as stated by the 2002 Nobel Prize in Economics Daniel Kahneman, individuals magnify losses and undervalue gains. If the price is lowered gradually and gradually, each of these small reductions can go unnoticed. On the contrary, if the reduction in the price is shown only once, accumulating the reduction in a single moment, the feeling of profit for that discount is magnified.
The also Nobel Prize in Economics (2017) Richard Thaler adds to the accumulation effect that of transaction profit, or the utility that the consumer obtains when comparing the discounted price (paid price) with the original price (which would act as a reference price) on the label.
So on days like black friday numerous factors converge that can make your offers irresistible:
One reason justified.
A potential gain effect for many of the products on offer that day.
A high perceived profit in the transaction if the client is anchored to the previous price of the offer as a reference.
And not in vain many readers will have heard (or said) phrases like: “I bought these shoes because I saved 30 euros” or “is that at that price I had to buy them.” But it would be necessary to ask some questions in this regard: Did I really need them? Is the reduced price really a good price or has the consumer been carried away by the euphoria of the discount? A week after buying them, would you buy them again for the same price without knowing that they were on sale?
In this regard, and to reflect, a good Colombian friend commented to the co-author of this article that, when she came to live in Spain, she was very surprised by the existence and importance of storage rooms in Spanish houses.
A final clarification
Given the feeling of some that during the black friday the discounts are not that extraordinary, there is factual information that seems to support that feeling.
According to data from the study prepared by Minor and 2019 on a very wide sample of shops online, during the black friday In 2019, 83.37% of prices did not change, 9.36% fell an average of 12.38% and 7.27% rose 11.75%.
In this sense, it must be shown how, in a discreet but continuous way, the large electronic commerce operators have long opted for prices that change not daily, but several times a day. With this strategy they try to respond almost immediately to fluctuations in supply (from competitors) and demand from their customers.
Finally, it should not be forgotten that the customer is increasingly informed and it is increasingly difficult to “piggyback”. Consumers who are increasingly informed and more aware of global sustainability issues are expected to make increasingly rational purchasing decisions in the future. black fridays.
Pedro Jesus Cuestas Diaz, Full Professor of Marketing and Market Research (Marketing), University of Murcia and María Isabel Pascual del Riquelme Martínez, PhD Assistant Professor in the Department of Market Research, University of Murcia