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|Image Source: CNN|
If you’ve headed over to Amazon’s website recently, you may well have noticed considerable excitement about ‘Black Friday’. In retail, November 23 is an opportunity to release stock at a discounted price – and it will be met with some trepidation. But why do retailers do it?
The term ‘Black Friday’ comes from a number of different sources. Chief among these is the fact that, traditionally, it refers to the day after Thanksgiving – the official opening to the annual Christmas shopping frenzy. Even at the time, retailers backed away from using the phrase ‘Black Friday’ overtly – it had previously been used in connection with disastrous Wall Street events – preferring to label the day ‘Big Friday’.
Despite the negative connotations, the term ‘Black Friday’ caught on instead and it grew in popularity: retailers noticed a gradual increase in the number of customers on this particular day, so they started launching on-the-day deals to encourage higher levels of conversion. In retail, conversion is the process of transforming a ‘prospect’ (or prospective shopper) into an ‘owner’ of products – and lower prices convert more prospects.
During the 1980s, an accepted alternative use for the term ‘Black Friday’ cropped up. The theory ran thus: the majority of retailers have narrow margins (excluding certain outfits like Apple or GAP) and up until Black Friday retailers ran ‘in the red’ – Black Friday, therefore marks the transition between running at a loss and running profitably. In practice, this is, of course, not really the case. However, since Black Friday beckons on the Christmas shopping season – over which retailers typically report higher profits – it is indeed the starting point at which many small businesses move from ‘the red’ to ‘the black’.
The term Cyber Monday originates from much later. In 2005, the National Retail Federation invented the idea to encourage retailers to discount electronic goods like computers, laptops, and mp3 players on the Monday following the Black Friday weekend. Why? Shoppers who were too busy to visit retail outlets on Black Friday or the Thanksgiving weekend (those with work or family commitments etc.) hit the stores hard on the Monday after. It made for better conversion rates.
The terms Black Friday and Cyber Monday, and on-the-day promotions are clever marketing tactics. Discounts are often more than enough of a cut under regular retail prices to persuade you to indulge whilst visiting stores. And, of course, there’s also the possibility that Black Friday laptop deals won’t exist the following day. So, if you’re in the position to buy a new laptop, you might as well pick it up on Black Friday. See?! You’re already making the move from prospect to owner by considering the value of buying on a particular day. It’s marketing magic that actually benefits everyone!
Author’s Bio: Joanna Stevenson studied mechanical engineering in London, and currently works for an energy research and consulting firm. She enjoys writing tech articles in her free time. She aspires to be an intrepid tech and gaming enthusiast with the exploratory spirit and witty prose of her favorite author of Robert Louis Stevenson. Treasure Island for the tech world.