De Econometrist neemt een statistische kijk op de wereld.
It is almost that time of the year again: Black Friday. The day were most of us spend a lot of money (almost 90% more than usual) on presents for ourselves, friends, and relatives. A day which is well-known for its raging hordes of Black Friday shoppers. We have all seen the extreme videos were usually well-behaved individuals act like animals. The men and woman who run down the escalators at full speed and try to grab whatever they can on their way to the checkout desk. Interestingly, due to COVID-19, this year’s Black Friday shopping spree will be primarily held online. Online sales are expected to reach 9.7 billion euros in the Netherlands alone. Since, the day is almost here, what follows is a detailed account of the history of Black Friday and sales techniques that are used by business to drive revenue growth this special day.
First, you might be wondering where Black Friday got its name from. The explanation is fairly simple. In the not-too-distant past, the Friday after thanksgiving would be characterized by a surge in shoppers (in the USA), who would buy presents for the holiday season. Since accountants used black ink to show the incurred profits on a given business day, the day became known as Black Friday. Many retailers within the USA formally adopted the name Black Friday to signify the day of huge sales. This concept slowly spread throughout the world and in recent years saw a rapid increase in the Netherlands, with the rise of online retailers.
Furthermore, we’re interested in how stores actually make a profit, albeit small, during Black Friday. The average economics course teaches the principles of demand and supply, whereby prices increase as the demand of a product increases, whilst the supply decreases. Doing this during Black Friday would be counterintuitive to the sole purpose of the day itself. That is why retailers use other techniques to increase their profits whilst still keeping their prices low.
In recent years, several reports have shown that manufacturers produce products of slightly lower quality than usual for Black Friday sales. These products are of similar quality of what you would buy in outlet stores. The observations in these reports indicate that even globally renowned brands employ these techniques to drive profits during Black Friday.
Additionally, companies sell peripherals that are often needed to get discounted products to work. Such as toners for printers, cables for computers, and televisions for discounted home cinema systems.
Another technique is by lowering the prices weeks before the actual Black Friday sales. By doing this, the retailers create the illusion that the products can be bought for huge discounts, while the price is the same as weeks ago. But this time, since the price is compared to the latest price, it looks like the products have been discounted. Even sneakier: dropping the prices slightly (read: by less than ten euros) to label them as ‘Black Friday Deals’ in order to deceive unknowing customers into buying the products.
In the end it is best to not worry about all this stuff. Just enjoy Black Friday and try to get the best deals possible. It only happens once a year, so score some deals!
Disclaimer: this article is an example of disinformation, although this may not be visible at first. In my next article I will go more in depth about the disinformation in this article and we will also perform an experiment to monitor the spread of disinformation and its effects.
This article is written by Berke Aslan