Monday, 30 November 2015

The fallacies of Black Friday                        

Black Friday is held on the fourth Friday of November. Since at least the 1930s, it has been regarded as the beginning of the Christmas shopping season.  Most major retailers open very early (and more recently during overnight hours) and offer promotional sales. Black Friday is not an official holiday but many people will treat it that way so that they won't miss out on the goodies that are for sale. Many stores extend the sales to the weekend but by then, it is possible that many of the items you are searching for are already gone. 

Incidentally, "Black Friday" didn't become a national term until the 1990s.

For many years, it was common for retailers to open at 6:00 a.m., but in the late 2000s many had crept to 5:00 or 4:00. This was taken to a new extreme in 2011, when several retailers that included stores such asTarget, Kohl's, Macy's, Best Buy, and Bealls opened at midnight for the first time. In 2012,Walmart and several other retailers announced that they would open most of their stores at 8:00 p.m. on the day before prompting calls for a walkout  among some workers. In 2014, stores such as   JCPenney, Best Buy, and Radio Shack  opened at 5:00 PM on the previous day while stores such as Target, Walmart, Belk, and Sears opened at 6:00 PM on that same day.

In 2014, spending volume on Black Friday fell for the first time since the 2008 recession. $50.9 billion in the US was spent during the 4-day Black Friday weekend, down 11% from the previous year.                                           

There have been reports of violence occurring between shoppers on Black Friday. Since 2006, there have been 7 reported deaths and 98 injuries throughout the United States.

The large population centers on Lake Ontario and the Lower Mainland in Canada have always attracted cross-border shopping into the US states, and as Black Friday became more popular in the US, Canadians often flocked to the US because of their lower prices and a stronger Canadian dollar. That all stopped when the Canadian dollar sank far below of the American dollar. Now the Americans flock to Canadian stores on Black Friday.                 

Since the start of the 21st century there have been attempts by retailers such as Amazon to introduce Black Friday in the United Kingdom. In  2014, more UK-based retailers adopted the Black Friday marketing scheme than ever. Among them were, John Lewis and Argos, who all offered massively discounted prices to entice Christmas shoppers. During Black Friday sales in 2014, police forces were called to stores across Britain to deal with crowd control issues, assaults, threatening customers and traffic issues.

Both Canada and the United States have those same problems.  In 2015, in Canada, a woman in one of the stores was seen pulling a new toy from a small child’s arms. That is really sinking to the depths of depravity.

I remember years ago reading about a crowd of shoppers that had barged through an opened door and in their rush to get inside the store, they trampled to death the young employee who had just opened the door for them.

In Mexico, Black Friday was the inspiration for the government and retailing industry to create an annual weekend of discounts and extended credit terms. El Buen Fin means "the good weekend" in Spanish..             

The popularity of Black Friday is also increasing in India. The reason for this is the growing number of e-commerce websites. The big e-commerce retailers in India are trying to emulate the concept of shopping festivals from the United States like Black Friday.

There are many, many reasons not to participate in Black Friday. Maybe you like sleeping in and spending time with your family more than lining up in a mall parking lot at 2 a.m. Maybe you object on humanitarian grounds to the ever-opening times which forces employees of big-box retailers yo cut their free time short by reporting to work in the middle of the night. 

The big problem with Black Friday, from a behavioral economist's perspective, is that every incentive a consumer could possibly have to participate — the promise of "doorbuster" deals on big-ticket items like TVs and computers, the opportunity to get all your holiday shopping done at once. 

The doorbuster is a big-ticket item (typically, a TV or other consumer electronics item) that retailers advertise at an extremely low cost. 

More often, items are sold at par slightly above their cost to get you into their store where you will then buy more of their items that are priced at normal high-margin levels.  

That's the retailer's Black Friday secret: You never just buy the TV. You buy the gold-plated HDMI cables, the fancy wall-mount kit (with the installation fee), the expensive power strip, and the Xbox game that catches your eye across the aisle. And by the time you're checking out, any gains you might have made on the TV itself have vanished after buying the other products. Once you have been stung, you have learned a valuable lesson. Not every item is reduced in price. If there was no Black Friday, you may not have otherwise bought those items.  

When a store attempts to drum up interest in an item by claiming "limited quantity" or "maximum two per customer," which makes us think we're getting something valuable when we may not be. It's a staple of deceptive marketing, and at no time in the calendar year is it in wider use than on Black Friday. This technique is as phony as a store that claims a smoke damage sale when the building that was on fire was miles away.

Many shoppers neglect to factor in the non-cash costs of their Black Friday trip — gas, parking, warranties, and rebates and the loss of income when not reporting to work.        

People are bad at knowing when to give up on unprofitable endeavors. This happens a lot on Black Friday. If you've already made the initial, bad investment of getting up at 2 a.m., driving to the mall, finding parking, and waiting in line for a store to open, you'll be inclined to buy more than you initially came for. Since, after all, you're already there, and what's another few hundred dollars?

On Black Friday, the investment is more than just financial. We've emotionally invested in the post-holiday ritual of standing in line with friends or family and enduring cold, dark misery for the shot at cheap electronics. That excess investment leads to excess rationalization, and coupled with a return/refund process that is a nightmare at many big-box retailers, it leads to people buying a lot of things they're not very happy with anyway.

There is a suspiciously high level of sickness on Black Fridays. Black Friday is the disease second only to the bubonic plague in its effects. At least that's the feeling of those who manage companies when Black Friday comes along. The office or shop is half empty, but every absentee claims that he or she was sick. That day certainly is black for those companies. This event should be Black Saturday.

Growing numbers of online retailers will push holiday delivery deadlines to the last minute possible, even after shipping companies failed last year to keep pace with record demand and left thousands of angry customers without presents under their Christmas trees. It is better to order your goods online long before Good Friday so that they will arrive before Christmas. 

. data found that the best day to buy toys is the day before Black Friday, while your best bet for electronics is the very beginning of November.

I hope this article tells you what you didn’t know.

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