money Why most Black Friday deals are a myth
The one item deal-hungry shoppers need more than the Apple AirPods they’re battling over is a dose of retail reality.
Black Friday deals are largely a fallacy and the day is nothing more than a grand illusion engineered by retailers to lure shoppers in with deceptively discounted merchandise and doorbusters, according to experts and recent studies on Black Friday pricing.
Still, the marketing scheme works, convincing many Americans to spend unnecessarily and allowing retailers to reap the rewards.
“Consumers are expecting deals,” said Michelle Skupin, senior director of marketing and communications at RetailMeNot, with two-thirds of shoppers expecting the best prices of the year. “They often won't make the purchase without a deal,” she said.
Why it’s all a hoax
While Black Friday remains the biggest foot traffic day of the year, it may be best to window-shop instead, said Jan Rogers Kniffen, retail expert and CEO of J Rogers Kniffen WWE.
“Except for doorbusters,” he said, “there are no longer deals available on Black Friday that can’t be had before or after Black Friday.”
Many of the eye-watering deals are nothing more than sleight of hand tricks crafted by retailers to tap into our collective subconscious love of deals. Shoppers often rationalize that it’s irresponsible to walk away from the $1,000 laptop that’s now selling for $500, when they’re just wasting $500 on a laptop they didn’t plan to buy.
Derivatives and price manipulation
It’s also likely that the laptop was never worth $1,000 and is instead a so-called derivative, another well-worn tactic for retailers.
Derivatives are products similar to popular items but are made with cheaper materials than its full-priced equivalent. Brands often manufacture certain consumer goods and products to specifically appeal to the lower Black Friday price point.
Retailers also quietly raise the prices of coveted Black Friday items in the weeks leading up to Thanksgiving.
Take the price-monitoring experiment the Wall Street Journal and Market Track LLC performed on 1,743 products sold online in November 2012.
During the weeks before Thanksgiving, prices climbed an average of 8% for about a fifth of the products; the items were then discounted on Black Friday. Specifically, toys and tools saw a 23% increase pre-Black Friday.
“Strategic use of discounts matters more than the depth of discounts,” Skupin said. “Half of Americans say they are more likely to spend more with a brand or retailer during the holidays if they provide the best deals and discount offers throughout the season.”
Getting you in the store
Retailers also use doorbuster deals – those limited, quality items rewarded to the dedicated shopper who has left Thanksgiving dinner early or camped overnight outside – as bait to get other shoppers in the stores.
“Doorbusters are advertising,” Kniffen said, “like any other form of advertising, like coupons, or discount offers, or anything else.”
Once the doorbuster items are gone, stores rely on your weakened spirit and tempt you to buy other items, many of which aren’t on sale. Instead of chalking up the outing as a waste of time and effort, many shoppers feel determined to buy something— and likely something they don’t need— just so they don’t walk away defeated and empty-handed.
How to shop Black Friday
Shopping a Black Friday sale without a plan is like food shopping when you’re hungry. Your cart will be full, but its contents won’t resemble a complete meal. Instead, you’re buying disjointed items on impulse.
Compromising your budget because you got swept up in the consumerist buying frenzy that is Black Friday also isn’t worth it.
Spend time researching the items on your shopping list and compare prices. Many stores begin sales before Black Friday and honor in-store pricing for online shoppers.
“Would I advise anyone to go out to the stores on Black Friday?” Kniffen said. Sure, if it’s a family tradition, a fun outing with friends, or an exhilarating hunt for a bargain.
“But to get the best deal, unless you are pursuing a doorbuster?” he said. “No.”
Stephanie is a reporter for Yahoo Finance. Follow her on Twitter @SJAsymkos.
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