Green/Black/Cyber Day/Week/Month?

Last Friday was “Black Friday” the day that supposedly marks the beginning of the Christmas shopping “season”. Over the last few years this event has grown in scale, with stores opening ridiculously early and, according to popular culture, offering huge bargains on everything. This year local stores extended this idea to include Thursday (“Green Thursday” would you believe?) This madness continues across the weekend to “Cyber Monday” and many stores now refer to “Black Friday Week.” This leads to a form of consumer insanity that is encouraged by retailers everywhere, despite the often negative effects.

Black Friday shopping is known for attracting aggressive crowds, with annual reports of assaults, shootings, and throngs of people trampling on other shoppers in an attempt to get the best deal on a product before supplies run out. – Wikipedia

There are a number of explanations of the origin of the name. Some say it is the day when retailers finally start to make a profit (move out of the red and in to the black), others think it refers to the masses of people and vehicles crowding the streets to bursting point. Whatever the real derivation it doesn’t change the fact that Black Friday is pure and simple marketing aimed at the brainwashed shopper. If you think you’re going to go out there and get a “deal”, think again.

Seriously. are the stores really going to lower all their prices dramatically at the one time when they know the vast majority are going to be (literally) fighting to buy? If that were the case it would be known as “Insane Friday” (actually that would probably be a good name for it anyway). No doubt people everywhere will point their collective fingers to the colored discount price labels as evidence of these “bargains”, but that doesn’t hold water either.

The stores tell you that they are reducing prices, the stores produce the money-off labels etc. and the stores are the ones selling to you. That’s hardly what you would call “objective,” is it? The very people who have the most to gain from you buying are the ones telling you how much you will save.  Hmmm…

Every week I get emails from retailers telling me what is on offer that week. In some cases it’s daily. Wow, they must be so generous as to give away all this merchandise at hugely discounted prices. The love of humanity must drip endlessly from the retailers’ hearts, bless them, to suffer such deep cuts into their profits. What else could possibly explain such constant munificent altruism?

The real answer to that question is simple. None of it is true. Black Friday, and all of the related extended “bargain” days, are just marketing hype aimed at convincing gullible people to go out and spend money (that often they don’t have) on the lie that they are getting a bargain.

Here’s how it works. Imagine that a retailer sells “Thingybobs” and the cost price (to the store) of a Thingybob is ten bucks. The retailer needs to make a profit and works out that they can do that by selling a Thingybob at $200. So they put them on the shelves at $200, right?

Wrong! What they do is list them at $400, the “regular pricing” or whatever you want to call it. They’ll list them at that for a couple of weeks. Then they’ll put them on special with ten percent off, this week only folks. So now you pay $360. The retailer is still making $160 over and above what they need to make a profit. But now you’re thinking you got a bargain that week.

The retailers will bounce the product around from regular to special pricing for a while to mop up the “early adopters” (read most gullible). Then they’ll start being more aggressive and offer 20% off. Now you pay $320 for the Thingybob, only $120 more than the store needs to make a decent profit.

Along comes Black Friday. Now they offer them at a huge “40% off our regular pricing”. You can buy a Thingybob for only $240! Wow, that’s like almost half-price man. And the retailer still makes forty bucks over and above their profit margin.

Some deal, huh? For the retailer at least.

Often times when you think you’ve found a bargain the item is being replaced by a newer model, the retailer is simply getting rid of old stock that will be virtually unsellable once the new version comes out. This may work for you, but you need to be careful. Frequently once a new version comes out (especially in electronics) the support for the old version is pulled, making that “deal” an electronic albatross hanging around your neck.

Here’s an idea for a retailer that wants to stand out. How about just offering things at a regular low price and spare us the hype (and the killings!)? Probably not much chance of that. In the mean-time my advice is to never pay full price for anything. I consider the main stores off-limits from November to January and avoid them like the veritable plague, I’m sure I’m not alone.


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