Economics Of Black Friday

Black Friday is the Friday after Thanksgiving when retailers offer promotional sales. Some would say it’s the official start of the Christmas shopping season but does it help or hurt us economically? In the following paragraphs, I will summarize three articles I found relating Black Friday and its role in our economics to help answer that question.

“What Are The Economics Behind The Black Friday Sales?” (Mayefsky, 2013) In short, the retailer can lose money on items being put on sale (either in the sense of a price below the cost of the item or in comparison to the price they might be able to get you to pay if they did not put the item on sale) and come out ahead if they increase the probability of getting you to buy other things that day

The biggest mistake that people make on Black Friday is that they assume that the most popular day of the year to shop is the best day of the year to buy anything. "Black Friday is about cheap stuff at cheap prices, and I mean cheap in every connotation of the word," Dan de Grandpre, a veteran deal expert, told the New York Times. As experts in "retail ergonomics" (it 's a thing) have shown, counterclockwise traffic flows result in more spending; putting high-margin items at eye-level to the customers ' right is most likely to motivate a purchase; and forcing you to walk around a display is an easy way to draw our attention to items the store wants us to throw in the cart. To appreciate the net cost of your shopping trip, remember to include the gas you use commuting from mega-sale to mega-sale, the shipping and handling costs, and the warranties and rebates (much more on those later).We tend to ignore net cost when we shop because we 're focused on the bargain story. If you drive 40 minutes to a super-sale and sit in a parking-lot line for another 20 minutes, that 's an hour of your time and gasoline. If you 're buying a $400 item, for the overwhelming number of consumers that level of spending is not a risk you need to insure under any circumstances. Don 't fall for what looks like a "good deal" just because you can justify it to yourself on the basis of "it was 40% cheaper than the other model. That means the recipient of a $100 shirt would value it between $70 and $90. Maybe the absurd inconvenience of the wait is a part of the story you want to remember and tell friends later.