As Black Friday approaches, retailers and consumers prepare for an annual shopping extravaganza that often leads shoppers to buy or consume more than they intended. In a 2022 survey across US and UK participants, only 38% of those Black Friday shopping will strictly buy what they plan in advance, leaving plenty of shoppers open for impulse buys. In fact, an estimated 1 in every 3 shoppers return what they buy on Black Friday. So, what is the consumer psychology behind the buys that go beyond enticing deals? To understand this, we look at how consumers think and make choices to identify key principles that contribute to consumer shopping habits on Black Friday.
System 1's Allure
System 1 thinking, the quick and intuitive part of our minds, plays a central and obvious role in Black Friday shopping. As YCCI’s Nathan Novemsky says, “System 1 reacts to perceived scarcity, perceptions of deals, and social proof.” It lures consumers with tempting deals and makes them gravitate towards items on sale. This explains a shopper walking into a department store on Black Friday with a singular goal of buying a new TV, however, they end up buying a bunch of other things as they wander other aisles. This unexpected transformation from a TV seeker into a multi-product buyer is a phenomenon known as “shopping momentum.”
System 1 reacts to perceived scarcity, perceptions of deals, and social proof.
Recognizing Shopping Momentum
The example above showcases the concept of shopping momentum, as explored by Professor Ravi Dhar and his colleagues, which explains how an initial purchase can trigger a sequence of buying decisions, even if unrelated to the initial choice. This highlights that shoppers are not just impulsive; they follow a pattern. It’s important to be aware of shopping momentum in order to minimize buyer's remorse and ensure additional purchases align with consumers intentions and needs.
Opportunity Costs Reminders
Consumers often neglect to consider the opportunity costs associated with their purchases, meaning weighing the value of a Black Friday purchase against what else they could do with that money spent. This oversight, extensively studied by Yale SOM Professors Shane Frederick, Nathan Novemsky, and Ravi Dhar underscores a critical point – thinking about opportunity costs often elude consumers, leading to impulsive acquisitions of items that may hold little genuine value beyond the initial allure of a deal. Black Friday offers an opportunity for retailers to remind price sensitive consumers of opportunity costs and differentiate from a more expensive competitor or a generic discount message. The study notes “Rather than advertising a brand’s low prices in some general way… firms may better promote low-price products by cueing consumers to think about the leftover cash and possible attractive uses for it.”
Embracing Long-Term Ownership Perspective
Another significant factor in consumer decisions is the expected duration of ownership – ‘how long will I use this?’ For example, a cheap pair of shoes that are a slight misfit bought during a Black Friday sale might initially seem like a steal, but the ensuing discomfort can lead to regret with every step, literally! Prompting the consideration of length of ownership or use, even if purchases have a slightly higher price tag, fosters a win-win scenario for both consumers and retailers. It's about offering products with lasting value.
Understanding these aspects of consumer behavior during Black Friday allows retailers to embrace and align to the motivations, expectations, and decision-making processes of shoppers. Recognition of these behaviors can offer guidance in creating strategies that resonate with consumer intentions and meet their needs. As Black Friday approaches, remember that it's not just about discounting and selling; it's about fostering a connection that leaves consumers fulfilled and content with their choices.