Black Friday may be a great quick win, but what can brands and retailers learn in the long run? Using a bespoke study, ZenithOptimedia’s Richard Shotton finds out.
This year consumers took to the Black Friday sales with greater excitement than ever before. Over the weekend ZenithOptimedia surveyed 422 people and more than a third of them had taken part either online or offline.
Amongst 18-34s this figure rose to 47%. Furthermore, those who did participate were likely to spend heavily – almost a third of sales shoppers spent more than £100. Whilst Black Friday is obviously a great sales opportunity what are the longer term learnings for brands? What lessons can retailers learn beyond the power of price reductions?
Part of the success of Black Friday can be attributed to the psychological principle of scarcity. Scarcity is the idea that consumers want what they can’t have; that they are motivated by the fear of missing out.
The influence of this principle was demonstrated by Roy Baumeister, of Florida State University, who ran an ingenious experiment. Participants were asked to arrange a series of posters from 1-10 in order of attractiveness. They were told that after the task they could select a poster to keep. However, there was a twist.
Five minutes after ordering the posters they were told that the poster they had rated as third most attractive was no longer available to keep. The students were then asked to start from scratch and, as before, arrange the posters in order of attractiveness from 1-10. The results were intriguing.
For a significant proportion of people the poster which had been previously placed third was now deemed to be the most attractive, suggesting that the more unattainable something is, the more alluring it becomes.
This bias might be so powerful as it has evolutionary roots. Our ancestors who immediately capitalised on scarce resources, such as food, before they disappeared were likely to be more successful.
So how can brands and retailers apply this principle?
One way to apply this more regularly would be to run “scarce promotions”. These are promotions in which the number of items a consumer can buy is limited – for example a two for one offer for wine where no more than six bottles can be bought.
Brian Wansink, at Cornell University, has experimented with this approach and shown in controlled conditions that it can double sales. This significant boost in sales might be due to the body language of the brand – consumers are likely to think a deal must be a loss-leader if a brand needs to limit volumes.
Whilst “scarce promotions” are common in the US they have not yet caught on in the UK. Alternatively brands could learn from Amazon who create a sense of scarcity with its limited-time-to-act next day delivery option and their highlighting of the small volume of goods in stock.
Luckily for brands this principle can be applied without sacrificing hard earned margin. Whilst it might not lead to Black Friday style stampedes the additional sales made will at least be profitable
