About Black Friday
Originating in the USA in 2003, Black Friday has become the most popular shopping day of the year when nearly all retailers in the country run sales. Now a global phenomenon, Black Friday is popular in other countries including Canada, Mexico, India and the UK. Most recently it has embraced Australia (2011), France, Germany and South Africa (2014) and the Netherlands (2015).
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 to entice traffic into stores to start their Christmas shopping. As competition increased so did the breadth and depth of discounting.
About Cyber Monday
Cyber Monday is a extra special offer online shopping day. It takes place the Monday after Thanksgiving and Black Friday.
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. Originating in the USA, it has also spread to Canada and France (2008), UK (2009), Germany (2010), Australia (2012) and others.
Black Friday goes Global
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. The figure for 2015 is believed to be even lower. In context, Cyber Monday sales were $2.7bn in 2014 and £3bn in 2015. This suggests that the ‘Black Friday’ bubble may be bursting in the USA (2).
In countries where the Black Friday and Cyber Monday concepts are new, sales have grown, and generated both positive and negative publicity.
In the UK, Black Friday promotions are now trailed well in advance of the day, and this year Amazon is running a Black Friday week and a half. In 2015, some such as Asda eschewed the event, claiming their prices will be permanently low. However, our sources suggest special offers will return this year, probably as a result of competitive pressure (look out for cut price TVs;-)).
Black Friday Backlash?
In contrast, #BlackFriday has prompted the rise of #buynothingday (3) an international day of protest against consumerism. Participants include 65 countries. A glance at BuyNothingDay UK’s Twitter feed suggests that like King Canute, Buy Nothing Day has failed to stem the tide of consumerism.
Insights on the US vs. UK from Russell Howard
In this short video, British comedian Russell Howard shares insights from both sides of the pond. Suggesting both frenzy and perhaps a little media hyperbole.
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 conventional wisdom suggests that price-led offers provide pure rational benefits, recent research using brain imaging (fMRI) shows that this is untrue. More strongly discounted offers do 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 (4). Thus significant emotional benefits, and suppressed pain, can be gained. This may well explain some consumer frenzy.
3. Special offers are most effective when designed to meet 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 users, enhance your reputation, or inspire loyalty.
5. And if you can’t beat them, join them! Starting with our own unashamed Black Friday special offer for marketers. The Marketing Director’s Handbook – the definitive guide to superior and successful marketing. Grab it while it lasts ;-).
4. Rick, Scott, Nutson, Brian and others. Neural Predictors of Purchase, Neuron (2007)