With Black Friday approaching, many shoppers are gearing up for what has become one of the biggest shopping events of the year. To shed light on the psychology behind Black Friday sales and provide valuable tips for shoppers, Jo spoke with financial expert Elson Goh.
What Is Black Friday?
Black Friday, traditionally the day after Thanksgiving in the United States, has grown into a global phenomenon. Originally, retailers used this day to entice shoppers with special prices before the December holiday rush.
But now, Black Friday sales in November often surpass all of December’s sales combined. This shift has effectively trained consumers to expect and seek out deals in November, creating a self-perpetuating cycle of anticipation and spending.
Psychological Tricks to Watch Out For
Elson explains some of the psychological tricks retailers use to encourage us to buy:
1. The Decoy Effect
Retailers sometimes introduce a “decoy” option to make a higher-priced product look like a better deal. Elson gave an example: at a movie theater, if there’s only a small and large popcorn, most people pick the small. But if a medium is added at nearly the same price as the large, suddenly the large seems like a bargain!
2. Feature Loading
Ever noticed how there’s always a “deluxe” version of a product with tons of extra features? Retailers know that even if we won’t use all these features, we’re often tempted to pay for them because they seem like a better value.
3. The Call to Action
Elson pointed out that retailers know we’ve been eyeing certain items all year. When they finally offer a huge discount, like 70% off, it creates a powerful urge to buy. Black Friday adds to this pressure by framing the discounts as “limited-time only” offers.
4. The Urgency of Black Friday
While sales occur year-round, Black Friday’s limited-time nature, amplifies the pressure to buy. “Manufacturers would have to find an excuse to sell you something” Elson explained “if there’s no sales, why would you be prompted to take action?” Black Friday’s one-day timeframe, despite extensions like Cyber Monday, creates a unique sense of urgency.
Tips for Smart Black Friday Shopping
Elson offered several strategies to help consumers navigate Black Friday more mindfully:
- Make a pre-sale list: Write down what you need before looking at any deals.
- Prioritise your list: Rank items by importance, distinguishing between needs and wants.
- Include planned gifts: Factor in your holiday shopping to avoid impulse buys.
- Question the ‘deluxe’ option: Ask yourself if you truly need all those extra features.
- Focus on the ‘why’: Consider why you want an item, not just what it is.
- Set a budget: Create a separate savings account for holiday purchases to limit overspending.
- Avoid ‘buy now, pay later’ schemes: These can obscure the true cost of your purchases.
The Bottom Line
This Black Friday, keep an eye out for marketing tactics and your own spending habits. Elson’s advice can help you make more thoughtful purchases, avoid regret, and save money. Remember, the goal is to get real value—not just to snag the biggest “bargain.”