According to classical economics, the primary drive for consumption is the reduction of prices. The lever that pushes people to buy is the discount, maximizing utility. Behavioral finance has demonstrated, incontrovertibly, that logic is insufficient in understanding human decisions. Indeed, rationality alone does not explain the success of Black Friday. Activation on purchase is not associated with income. A recent market research published by Kantar shows that 70% of the population will buy during Black Friday, without substantial distinctions by income bracket. Why would someone without financial problems wait for a confusing moment to buy? What is rational about taking the risk of not finding the desired product or service when the impact of the discount is an infinitesimal percentage of one’s income or assets? Even an analysis of the product categories involved in Black Friday is not associated with the search for the best price. Technology, fashion, designer items and perfumes are luxuries, unnecessary goods. The success of this planetary phenomenon is rooted in one of the most studied psychological mechanisms by Richard H. Thaler and has its roots in affectivity, self-esteem and emotion.
The psychologist, Nobel prize winner for economics, has shown that, in addition to the pleasure of buying, there is an added pleasure linked to the idea of having made a deal. He imagines a customer who is evaluating the purchase of a new TV at a cost of 500 euros. Will he buy? According to classical economics, yes, if the pleasure associated with owning the asset exceeds the pain of paying. It is the maximization of utility in the cost/benefit ratio. But the human brain is not a rational calculator. If the customer knows that up to 2 weeks earlier that TV had a price of 600 euros, a further dynamic is activated linked to having found the deal. Logic would impose a decision determined by the relationship between costs incurred and benefits. The pleasure of owning the property should be rationally compared with the expense incurred. Thaler has demonstrated in many researches that knowing that you are buying at a more advantageous price generates an additional pleasure in the consumer, which is added to that associated with the purchase. Finding the deal increases self-esteem and makes you feel better. The customer feels smarter and more intelligent for having bought at the right time at a lower price. And it is precisely this added pleasure that is the definitive push to purchase. This “search for a bargain” explains why Black Friday also involves the wealthiest people and above all non-essential product categories.
There is a widespread online habit of writing down prices as early as early October to measure the reduction in prices. Behind this seemingly rational behavior is the search for a dose of additional pleasure, the pleasure of offering.
Black Friday is called Black for the color of the ink on the accounting books where the revenues were recorded. Today it is the ritual symbol of shopping. The discount is only the rational surface. Neurovendita studies show that the buying brain does not carry out a lucid evaluation between costs and benefits. Affective dynamics such as the growth of self-esteem connected to the search for a deal pushes the purchase decision. The mind is irrational when it buys, even when it appears not to be.
** Director of the Neurovendita Lab