With Black Friday and Cyber Monday coming soon we ask what’s what and whether you should beat them or join them?
What is Black Friday?
Black Friday is a super special offer retail shopping day. It originated in the USA, and since 2003 has become the most popular shopping day of the year when nearly all retailers in the country run sales. Black Friday is now a popular event in other countries including Canada, Mexico, India and the UK. Most recently it has been embraced in Australia (2011) and France, Germany and South Africa (2014).
Origins of Black Friday
Black Friday marks the unofficial beginning of the Christmas season. It’s a day when retailers’ profits are said to turn ‘black’ from ‘red’. Though the term ‘black’ may also be borrowed from the financial markets to describe days when share prices fall dramatically (1). Being the Friday after Thanksgiving, many US employers give their employees the day off as part of the holiday weekend. Discounting emerged as a means to entice traffic into stores to start their Christmas shopping. As competition increased so did the breadth and depth of discounting.
What is Cyber Monday
Cyber Monday is a super special offer online shopping day. It takes place the Monday after Thanksgiving and Black Friday.
Origins of Cyber Monday
As Black Friday has grown so Cyber Monday has emerged to further extend the US holiday shopping weekend and provide a sales window for online and smaller suppliers. It also originated in the USA though has now spread to Canada and France (2008), UK (2009), Germany (2010), Australia (2012) and others.
In the USA where Black Friday first emerged as a concept, sales peaked at $59bn in 2012 and have since fallen steadily to $51bn in 2014. For context, Cyber Monday sales were approximately $3bn in 2014. This suggests that the ‘Black Friday’ bubble may be bursting.
In countries where the Black Friday and Cyber Monday concepts are new, sales have been frenzied, and generated both positive and negative publicity.
In the UK, Black Friday promotions have been trailed well in advance of the day, and some participants have extended the offer period to a week or longer. Asda for example, has eschewed Black Friday, claiming their prices will be permanently low. Others such as Jigsaw refuse to participate claiming to be ‘above’ offers.
In turn this has prompted the rise of #buynothingday (3) an international day of protest against consumerism. Participation now includes 65 countries.
1. Beware of the pitfalls in using price-led special offers. Risks are simply to drive down prices, commoditise markets, bring forward sales and reduce future income.
2. While there is an argument that a simple price-led offer is a rational offer relying on simply logical thinking, recent research using brain imaging (fMRI) shows that this is untrue. More strongly discounted offers do actually cause pleasure seeking parts of the brain (the nucleus accumbens), and the decision making parts of the brain (medial prefrontal cortex) to light-up while the pain sensing area (insula) remains inactive (2). Thus it is reasonable to conclude that there are significant emotional benefits, and suppressed pain, to be gained from special offers.
3. Special offers are most effective when designed to meet very clear and specific customer objectives. So think clearly what those objectives are and design the mechanic so it works for you. Use creativity and the power of your brand to enhance the emotional benefits!
4. Use promotion events to gain a strategic advantage rather than bring forward sales. For example, by benefiting from the extra attention gifted by the event to attract new triallists or users, standing out from the crowd and reinforcing reputation, or improving loyalty. Here’s our own unashamed special offer for marketers who want to gain an edge on The Marketing Director’s Handbook – the only book that covers the marketing and management aspects of the role (available until midnight Cyber Monday!). But don’t tell everyone that you have a copy!
2. Rick, Scott, Nutson, Brian and others. Neural Predictors of Purchase, Neuron (2007)