The Psychology of Black Friday

Default Profile ImageBen O'Connell
The Psychology of Black Friday

Black Friday and post-Christmas sales have become integral to the retail landscape in New Zealand. These events, which occur the day after Thanksgiving and following the Christmas holiday respectively, are marked by significant discounts and special offers. But what drives these shopping frenzies?

According to data from PriceSpy, Black Friday sales in New Zealand have been sluggish in 2023, with initial reports showing a decrease in consumer spending. However, the perspective changes when we look at the Boxing Day sales. Boxing Day, traditionally the go-to sales event for Kiwis, has seen a significant increase in participation and spending.

PriceSpy reported a 20% increase in sales on Boxing Day compared to the same period in the previous year. This indicates a shift in consumer behaviour, with Kiwis showing a greater preference for post-Christmas sales over Black Friday.

Scarcity

Black Friday, occurring the day after Thanksgiving in the United States, has become a global shopping event. In New Zealand, it’s celebrated on the same day as in the United States, marking the start of the holiday shopping season. Its psychology applies to the entire silly season, though.

The psychology behind holiday shopping lies in the concept of ‘scarcity’, a principle in psychology that suggests that people value things more when they are limited. Retailers create a sense of urgency by offering limited-time deals, which can motivate consumers to make impulse purchases. Techniques such as limited-time offers, flash sales, and “only a few left” notifications can create a sense of urgency in consumers. This manipulation can lead to impulse buying as consumers fear missing out on a product they want or need.

Emotions

Emotions play a significant role in the psychology of Black Friday and post-Christmas sales. The anticipation of the holiday season can evoke feelings of joy, excitement, and nostalgia, which can influence purchasing decisions. Retailers capitalise on these emotions by creating festive atmospheres, playing holiday music, and using emotional marketing strategies. This can lead to increased spending and impulse purchases. However, the pressure to make quick decisions can also lead to stress and anxiety. There’s a real need for sellers to strike a balance between creating excitement and managing customer expectations to ensure a positive shopping experience.

Social factors

Social influence is another key factor in the psychology of Black Friday and post-Christmas sales. People are more likely to make purchases when they see others doing the same. This is known as ‘social proof’, a psychological phenomenon where people look to others for guidance on appropriate behaviour. Ever ordered a meal based on what the guy two tables over requested, or looked up to the sky in search of whatever a crowd of pedestrians saw up there? Retailers often leverage social proof by sharing customer reviews and testimonials to encourage purchases. Peer pressure, family traditions, and societal expectations can all shape purchasing decisions as well. For instance, if friends or family members have praised a particular product, consumers may feel pressured to buy it too.

Value

Value is a crucial factor in the psychology of Black Friday and post-Christmas sales. Consumers are more likely to make purchases when they perceive that they are getting a good deal. Retailers often use these events to clear out old stock or launch new products, offering significant discounts or bundle offers to attract customers. Just because it’s new to you come December, doesn’t mean it hasn’t been sitting in a back storeroom since before the coronavirus pandemic. That isn’t to say those products aren’t worthwhile; instead, be mindful that retailers are doing everything they can to make you think their stock is valuable, and making you think it’s brand-spanking new tech, for example, is one way they do so.

Routine

Doesn’t it feel like Christmas arrives a little earlier every year? Well, businesses increasingly want the jump on each other. Habit and routine play a huge role in holiday expenditure. Many consumers have come to expect these events as part of the holiday shopping tradition, and retailers leverage this by promoting their sales well in advance and aligning their marketing messages with these established routines. For instance, a study by the Journal of Consumer Psychology found that 40% of purchases are made on autopilot, driven by habits and routines. Another study revealed that 92% of consumers’ decisions are based on subconscious habits. These statistics highlight the importance of habit and routine in retail psychology. Don’t get swept up in the habitual cycle of Christmas sales, as easy as it might be. Do you really need a third kettle, that new pair of boots, or a power drill? I can’t recall the last time you resumed that DIY project anyway…

Gone digital

In the digital age, online shopping has become a significant aspect of Black Friday and post-Christmas sales. The convenience and ease of online shopping can attract a wider audience, including those who may not typically participate in these events. However, it also introduces new challenges for retailers, such as managing website traffic and ensuring a seamless shopping experience.

Online retailers employ a variety of tactics to encourage consumers to purchase more and do so quickly. These strategies, often referred to as “dark patterns,” are designed to guide consumers’ behaviour and are not always transparent. For instance, countdown timers and low stock counters are used to create a sense of urgency and scarcity, encouraging immediate purchases. These tools can display real or fabricated numbers to ignite a fear of missing out, pushing consumers to act. Similarly, showing ratings and reviews, marking an item as a top seller, or indicating that others in your network have bought the

same item can influence purchasing decisions. Sometimes, what’s displayed is genuine, but often, it’s not, and it’s challenging for consumers to discern the truth.

Consumers may end up making impulsive decisions influenced by these tactics. The psychology of online shopping is complex, with most purchasing decisions being subconscious. Marketers take advantage of this by employing cognitive biases and nudges that play into our tendencies and biases, often without our awareness. For example, people tend to trust and mimic the actions of others. In online shopping, this translates to wanting to buy products with high ratings and reviews, and products that appear popular on social media. The quantity of reviews often matters more than their quality, as people are drawn to popular items. The belief in getting a good deal and the fear of missing out on a limited-time offer can drive purchases. Over time, e-commerce companies have become adept at encouraging spending, reducing friction in the buying process, and making consumers feel like they’ll miss out if they don’t act quickly.

A Word from Consumer NZ

Consumer NZ wishes to remind Kiwis to do some research before splurging this silly season.

“We know many shoppers wait for the Black Friday or Boxing Day sales to make a big-ticket purchase,” said Paul Smith, Consumer NZ head of test.

“Just because a product has a high retail price, don’t assume it’s the best product on the shelf.”

We test hundreds of products each year. If a product excels during the independent testing and analysis, it earns a ‘Consumer Recommends’ tick.

“If we recommend a product, it means we are confident it works better than its peers.”

Consumer NZ says customers should take particular care when buying big ticket items like water blasters, refrigerators, televisions, and espresso machines.

“At this time of year there is a lot of promotional pricing and persuasive marketing flying around which can make people feel pressured to make a purchase. With that in mind we want people to learn from our product test findings – top price doesn’t always mean top quality,” said Smith.