Black Friday: when rationality takes a back seat
(Reprint of an original post written with my Anthrolytics co-author Elise Horent)
On hearing that Black Friday is once again upon us (along with Cyber Monday and all the other sales and discounts in the weeks leading up to it), one cannot help thinking about ‘what do I need?’ or even ‘what do I want?’; after all, isn’t it the perfect time to give in to that impulse purchase and grab a great deal? So I was intrigued to see a recent report that just one in seven deals on Black Friday offer a genuine discount, according to new research from Which?
However, there are two different kinds of thinking processes we might engage in going into Black Friday:
Firstly, it’s a great opportunity to fulfil a rational need: for example, replace a worn-out kitchen appliance that we’ve been muddling along with until we could get a good deal on a new one.
Secondly, and unfortunately, it is also a great opportunity to fall prey to irrational and emotional shopping behaviours: for example – not needing to buy a new 70 inch TV, but purchasing one anyway, as discussed in this BBC Article: “let’s see what deals are happening and what I want to get”
Some behavioural biases we should reflect on before giving into Black Friday
At Anthrolytics, we are aware that there are lots of economic and emotional processes behind our obsession with Black Friday (check out our whitepaper on Customer Behaviours and Motivations), but here are some examples of where our shopping instincts can let us down;
‘Fear Of Missing Out’ (FOMO) or of Urgency: am I really missing out if I don’t buy this now? Is the discount worth spending the money today, or is there something else I should be spending it on or saving for?
Sunk cost fallacy: keeping shopping and continuing to expend energy doing so, even though it may not be worth it anymore. We are tired, we don’t necessarily need it, but we’ve spent so much time looking so far, we may as well keep bargain hunting.
Decision fatigue: We want to get a great deal so badly, and spend so much energy seeking it out, we eventually become exhausted and grab whatever seems ‘good enough’ without really thinking it through.
There are lots more, but it easy to see why Black Friday should perhaps refer to the shopping decisions we make, and not just the deep discounting made by retailers.
How is Black Friday perceived now, and has behaviour changed with a rising cost of living?
In the face of rising costs, some consumers are using Black Friday as an opportunity to stock up on expected future purchases, hedging against likely price rises over the coming months.
In addition, people are now looking for a combination of high quality and low price to make sure their purchases are affordable and can last for a long time. Also, in a recent survey, half of the respondents are not compromising their sustainability values for cheaper options.
There has also been a rise in google searches for the ‘best of’ an item, instead of specific products, and an increase in Google’s shopping tab search tool for searches like ‘best coat’ or ‘best hair product’, see: https://internetretailing.net/customer/online-shoppers-conducting-more-research-before-they-buy-google-data-shows/
This shows a shift in attitude; we are more aware that we cannot afford to just give in to emotional temptation brought on by Black Friday, but instead are taking a careful and more thought-through rational approach to our purchases.
And from a retailer’s point of view?
It comes as no surprise that retailers are also aware of these cognitive biases, and that they take full advantage of them; after all, it is from understanding consumer behaviour that ‘Cyber Monday’ follows right after Black Friday; an extra opportunity for them to keep that ‘urgent sale’ rush going and increase their revenues. (Some retailers are even going the extra step of offering a whole month’s ‘runner up to Christmas’ sale).
While retailers are increasingly aware of the importance of consumer experience, and are genuinely trying to improve the shopping experience, it is also the perfect opportunity for them to clear out old stock and make space for a new season in the New Year.
So, what should we do?
Firstly, before ‘checking out’, take a few seconds to ask ourselves ‘is this really a good deal, and do I need it or just want it?’
Secondly, shop around – not every Black Friday discount is the bargain it may seem.
Finally, if you are not sure you are making a wise decision, hold off – the January sales are just around the corner!
Peter is the inventor of Predictive Behavioural Analytics and a thought leader in the area of Customer and Employee Experience Management. Peter has spent many years as an expert in the field of analytics related to customer and employee experience and is also a renowned speaker on the topic of CX/EX and the experience economy.
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