Should your business run a Black Friday Sale? Science says no, according to behavioural scientist Dan Thwaites.

Black Friday and Cyber Monday coincide with a challenging time on the high street, both the physical and cyber varieties. As stockpiled inventory and sale volume targets weigh heavily on marketers’ minds, the temptation to discount looms large. 

But is this the right call?

Discounting, by definition, reduces revenue and devalues the brands and offers that businesses have spent the rest of the year building. Experts have already warned that Black Friday will have a negative impact as shoppers simply buy Christmas presents early and at a greater discount.

“A bad experience will cost a brand or retailer significantly over time. Even a ‘good’ experience might simply cement the idea that the brand is a discounter”

There’s also rising concern among consumer groups such as Which? that there are few genuine discounts on offer, in any case, potentially leading to greater cynicism and disillusion among shoppers.

Psychologically speaking, there are some scientific reasons why brands should think twice before jumping on the Black Friday bandwagon. That’s because people – all of us – are ‘cognitive misers’, meaning we have limited brainpower for making decisions, including what to buy.

Instead of effortful thought, we rely on subconscious mental shortcuts to easily make decisions. Retailers can use these shortcuts – such as making a product more visible or easier to reach, or implying lots of people are buying the product, or selling via smartphone to encourage swiping the products, inducing feelings of ownership – to nudge us into buying.

So, as Black Friday and the Christmas season approach, and the urge for marketers to follow the crowd appears irresistible, it might be worth a little thought on what is actually going on in customers’ minds and whether there might be alternatives that avoid wiping off millions of pounds of value off branded products.

So what might be happening in customers’ minds?

  • First off, it’s worth understanding the importance of the ‘flashbulb’ memory (and peak-end rule – where we remember the emotional part of an experience). Black Friday is an intense emotional experience, which is remembered as a sort of ‘flashbulb’ in people’s minds, colouring their perception of the brand/retailer for the rest of the year and beyond (for better or for worse). A bad or underwhelming experience will cost a brand or retailer significantly over time. Even a ‘good’ experience might simply cement the idea that the brand is a discounter.
  • Second, brands should consider the notion of internal reference prices. We all build internal gut feels for what a reasonable price is. These are usually vague impressions rather than exact numbers and something has to be discounted usually by more than 20% for us to really ’feel’ it. Also, a significant discount will shift our internal reference price, meaning our perception of its monetary value decreases, so when we see the product at recommended retail price, it then feels expensive and poor value.
  • Third, they should take into account the price-quality heuristic. A subconscious rule-of-thumb is ‘the more expensive it is, the better it is’. Hence, a large discount on Black Friday could cause us to devalue a brand or product in the long run.

Can brands use psychology rather than discounting to boost sales?

There is much evidence to suggest that people are primed to buy more when offered an emotional experience.

Research shows that when people are primed to think emotionally (at least in terms of positive emotion), they are more likely to spend. For example, the stock market goes up when the sun is out. In a similar vein, smart retailers and brands use the feel-good factor around Christmas to encourage people to spend more.

It’s also worth considering the state of our caveman brains. Our wiring is such that we consume more when it’s dark and cold (especially when it comes to food and drink).

After all, Christmas dates right back to Saturnalia – an orgiastic/hedonistic festival celebrating Saturn and Father Time (today we have Santa and Father Christmas). It provided a period of celebration and misrule at a time when people needed it most.

  • Dan Thwaites is co-founder and chief strategy officer at behaviour science– consultancy Capuchin