BLACK FRIDAY PARANIOA
I remember back in 2014, during the annual Black Friday shopping ceremony (yes, it's a ceremonious event like Sallah and Christmas... Hold on, I'll come back to that), one of the top online shopping malls publicized their returns and the figure they announced was edging close to hundreds of millions of dollars. I remember getting just one item - a watch.
One particular scenario I'd like to forget though, was the crash of a long friendship. Friend A, a shopaholic had "access" to Friend B's bank card. Friend A had tried convincing Friend B of the gains and thrills of Black Friday, but she had made it clear that all she wanted was a handbag.
She got the handbag alright, but the Black Friday thrill seeker friend ensure she got more than just a handbag. She ran purchases of over N50k, after a discounted handbag purchase of N7k from Alibaba e-commerce store. It was a nasty scenario; one which would only leave you wondering why some people are just discount zombies.
"Black Friday" or "Shopping holiday" if you like, started in the United States as a post-Thanksgiving ceremony. The shopping holiday sees retail stores offer a significant discount to customers and it has for really long time, been the busiest day retail day of the year. Some customers camp outside their favourite stores, just to be among the first to be attended to.
Now, if you like conspiracy theories, stay with me. If you run a retail store, how would you orchestrate your store's black Friday sales? Would you run at a loss every November because of Black Friday or would be clever about the whole process? If you think retail stores both online and offline make no profit, or run at a loss because of Black, Yellow or White Friday, then think again.
Market research shows November as the happiest month of retailers, and their profits peak highest on the same month than any other month. Now, shouldn't all the discounts they've offered drop their profit margin? Think about "Trade Secrets". Trade secrets are an important, but invisible component of a company's intellectual property (IP).
A company's trade secret's contribution to its value, measured as its market capitalization, can be major. Call me paranoid, but I know that a lot of strategic pricing technicalities are involved in Black Friday sales, and even in coming months after the consumed Black Friday. Believe me, "Somebody's gotta pay!"
A quick Black Friday conspiracy theory.
Pay attention now; will you? I sell handmade shoes and I make 13% profit on each sale. Black Friday comes and I reduce my profit percentage to 6.5%, leaving you my customer jumping for joy. And for some items, I make a meagre 1.5 to 2% profit but they're flash sale items. The amount of customers who rush the items, mean I make more profit than I would on a normal day. Even though in coming months, I'll be putting an almost unnoticeable hike in item prices.
I don't only make my profit, I make more. The only difference? Returns are spread over a longer period of time - We're talking months here.
So don't call me a non-believer in discounts when I say Black Friday is simply customer bait. In the words of a mentor, “Keep your credit/debit cards out of sight. Don’t disrespect your budget because of seductive deals. Be steadfast. The scam will soon be over”.
Happy Black Friday.
Mature Minds Talk
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