The hype around Black Friday creates the impression that every offer is worth trampling over fellow shoppers to get to, with retailers slashing prices to historically low levels for one day only. However, financial analysts warn that’s rarely the case.
Many consumers rush into impulse-buying on that day and this is something retailers are very aware of. At the same time, retailers have the opportunity to sell at low prices products which are in stock and simply ‘sitting’ in a warehouse – making a profit on them as well.
But are prices really low on that day? The British Observatory disagrees with that view. A survey carried out in 2017 by “Which.uk” shows that real bargains on products marked down on Black Friday are minimal. Specifically, 87% of products were at the same price or even cheaper throughout the year, the survey showed.
That’s why authorities urge consumers to be particularly careful with products they want to buy and to research prices days before Black Friday if they want to avoid feeling cheated.
Financial analysts agree that most retail strategies take it for granted that all consumers are of equal value. Retailers on Black Friday tend to invest heavily in low-value consumers – that is, on those who are not on their ‘loyal’ customer list – in the hope that they will get to keep them as such in the long run.
Also, profits made by retailers who invest heavily on Black Friday are not significantly higher than those of more conservative ones. That’s also the reason behind a tendency by small retailers over the recent past years to abstain from Black Friday.
Analysts also believe that retailers looking to win over new customers on Black Friday and retain them will fail. Because these sort of consumers know exactly what they want and at what price, all year round. Therefore, the right approach is to have discounts but not excessive ones.