Traditionally known to be the start of the Christmas shopping season in the US, Black Friday occurs on the fourth Friday of November following Thanksgiving Thursday, and with only one more day to go, the day has gotten hundreds of South Africans in a spending frenzy, waiting on the best deals.
According to PwC’s strategy and behavioural economists, rational decision-making abilities are at their weakest on Black Friday, as marketers can easily leverage consumers’ cognitive make-up to get them to spend more.
PWC outlined seven behavioural traps that consumers should be wary of:
- Framing: Globally, retailers have generated a hype around the Black Friday phenomenon. Although Black Friday is relatively new in South Africa, local interest is at all-time highs. Framed as a once-a-year sale, we view it as an extraordinary event and associate it with extreme price cuts. However, Black Friday is arguably just another seasonal sale and its status as an exceptional event should not compel us to make purchasing decisions that we would otherwise not have made.
- Scarcity and loss aversion: Panic spreads when shoppers fear they may miss out on the best sales deals. Retailers commonly spark consumers’ interest by highlighting limited stocks available for a limited time only, which raises the perceived value of these goods — after all, rarity and value are deeply intertwined. While the sense of scarcity can further trigger the need to act, we should look out whether we would truly miss out, or are captured by the rush of the chase.
- Herding: Marketers welcome the crowds on Black Friday, since crowds attract more crowds. Few shoppers feel guilty buying a 50 per cent off toaster when the customers next to them have flat screen TVs in their carts. When our peers are doing it, the painful experience of parting with money becomes an act of social cohesion.
- The halo effect: One exceptionally good sales deal can create the perception that all of the retailer’s deals are also steals by association. This phenomenon — termed the ‘halo effect’ — means consumers will have difficulty viewing the deals on Black Friday in a nuanced way, where some may be highly discounted, but others may not.
- Confirmation bias: As consumers, we are likely to factor out any additional costs associated with our shopping trip on Black Friday, including transport and parking costs, time and effort. As we buy into the idea of Black Friday, we want to believe we are truly making savvy money decisions. Thus, we are likely to count only the per-item savings to confirm this belief, rather than considering whether going out of our way for the shopping excursion is truly worth our while.
- Initial pain: The amount of pain we experience decreases with every extra rand after the initial payment, paving the way for excessive spending on things we would otherwise not purchase on Black Friday.
- The sunk cost fallacy: Once we have started to invest, we tend to struggle to close out investments that prove unprofitable. On Black Friday, if we have already made the initial upfront investment of getting up before sunrise, driving to the mall, finding parking and waiting in line for the store to open, we will be inclined to buy more than we initially came for.
Also, read:
6 not so shocking truths about Black Friday in South Africa
6 Black Friday online shopping tips
Black Friday. A potential trap for shopaholics
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