Black Friday And How It All Started
If you work in retail, you are probably doing a Black Friday special just like everyone else. Everyone is pretty desperate this year to try to get customers to spend the little money they have left at their shop. In a last-ditch effort to try make up for lost income during lockdown. For many who are looking for a good bargain to help lift the mood of the entire Covid-19 filled year, Black Friday seems more important in 2020 than ever before. What are its origins, and why has it spread
THE FIRST BLACK FRIDAY WASN’T ABOUT SHOPPING
Interestingly, the term ‘Black Friday’ was first used in 1869, when two greedy stock market gold traders colluded to drive up the gold price by creating a false spike in the price. They bought up every share they could get their hands on, with the intention of selling their shares to other traders following suit, at a huge profit for themselves.
Unfortunately their plan brutally backfired. The stock market went into free fall, leaving countless stock market investors and listed companies destitute. This is why Black Friday was known as a very dark or “black” day for the markets, and all the people who lost their life savings and investments as it collapsed. Sadly, over 150 years later we still see similar attempts at market manipulation.
SO, WHERE DID THE MODERN BLACK FRIDAY COME FROM?
Stores create a themed shopping experience to take advantage of the annual festivals and holidays. You have probably noticed that most shops are already playing Christmas songs, even though it is still weeks and weeks away. Soon every holiday began to get their own decorations, signage and even theme music.
Shoppers get bored and changing things up within your shop from time to time, has shown to improve sales. It also sometimes feels like the shop owners and their staff are bored, and also need a change.
Shoplifters in particular used to be a big problem on the day, since the shops were so crowded with people. The cops didn’t like it and so gave it this negative name. By the 60’s most Philadelphia shops began to use the term to refer to this challenging retail day.
WHAT IF YOU HAD A SORT OF HOLIDAY ALL ABOUT SHOPPING?
By the 1980’s many local Philadelphia shops had decided that having lots of people in the store on that particular day was actually a great earning opportunity. Many shops ran at breakeven (or a loss) all year until this big day in November, when they finally began to see some profit for the year. They would finally go from being “in the red” (and accounting term for making a loss) to being “in the black” (or making a profit). This was, for retailers, something to celebrate – a type of shopping holiday.
Soon stores began to compete in offering sales items to attract the most customers. The idea was have some really cheap items on sale, and then hopefully the shoppers would buy other normal priced items as well (a classic marketing idea).
Over the next few decades, Black Friday slowly spread worldwide as other countries and shops desperately wanted to cash in on the phenomenon. The trick was trying to create a feeling of excitement and anticipation and attract people into the stores. This is where FOMO comes in.
WHAT IS FOMO?
The Fear of Missing Out, also known as FOMO, is a basic human condition. We hate being the last to know, not being invited somewhere or missing out on the latest gossip. This is what drives, among other things, our love of news and social media.
In modern times it was the Americans who first realized how important it is to not only take advantage of FOMO, but also how to generate a feeling of hysteria when shopping and how this spikes sale figures. Marketing agencies worldwide learnt from them, and now make use of advertising to generate hype leading up to the event. They now create countdowns; get people to sign up to ‘early access’ daily mailing lists or emails to get people excited. The message is, if you don’t buy now, you are going to miss out!
BUYING ON CREDIT
The questions of how to push sales even higher on these new shopping holidays was quickly answered with the wide availability of credit from the banks and then later the retailers themselves.
The stores purchase heavily discounted mass stock from desperate suppliers and sold these items cheap. Which led to consumers to make use of credit in order to not miss out. Of course, the consumers often ignore the fact that buying anything on credit, eventually costs you much more than the advertised price. But FOMO combined with wanting instant gratification continues to drive credit use among shoppers. So, consumers end up paying more by using credit in order to save. Oh, the bitter irony!
DON’T GET SWEPT UP IN THE HYSTERIA
We all love a good bargain. Finding something cheaper at one shop than somewhere else is smart. Shopping around for deals, on items you need, is actually a really good idea. The trick is to not fall for the obvious marketing ploys of clever advertising people and shop when you don’t need to, or can’t afford to.
The fear of missing out is a real marketing strategy. It drives people to make bad snap decisions based on a false sense of urgency. It is much better to budget, save, and only buy what you need when you need it. This doesn’t mean that you should avoid Black Friday, after all there may be a deal on a specific item you are looking for. What it does mean, is that you need to be careful of not getting swept up in the hysteria of the day.
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