Promotion days, such as Singles Day, Cyber Monday or Black Friday, put pressure on consumers, the environment and retailers. Here’s why they continue to thrive despite their questionable effects.
Maximilian Jacobi / ch media
Whether you snort a line of cocaine or shop the sales, it makes no difference. At least, according to German neuroscientist Christian Elger. He compared the effect of discounts to that of drugs and his research shows that Discounted purchases trigger a release of dopamine in the brain, the happiness hormone.
This euphoria explains why consumers go shopping en masse during events like Black Friday, and why these sales days persist despite their questionable consequences:
“Discount Signals Work Like Cocaine”
Christian Elger
A zero-sum game
This explains, on a neural level, why consumers will once again rush for good deals during Black Friday, November 29. It is equally interesting to understand why consumer days like Black Friday and Cyber Monday have persisted, even though their usefulness is questionable in many respects.
- For customers: Christian Elger discovered that discounts short-circuit our rationality. Before buying a bargain, we rarely think about whether the product is really necessary.
- For the environment: Because these days encourage the waste of resources.
- And even for retailers: Because consumers wait for these days to buy, for example, their Christmas gifts, which can reduce merchants’ income outside of these discount periods.
“It’s a game that no one can get out of,” says economic psychologist Christian Fichter. He adds:
“Retail probably wouldn’t object to banning days like Black Friday”
He explains this situation using the prisoner’s dilemma, a concept from game theory:
Two accomplices are sentenced to five years in prison. The guards isolate them and make them an offer: they can reduce their sentence by denouncing the other. If one speaks, his sentence is reduced to three years, but that of his accomplice increases to ten years. If both keep quiet, they will serve five years. If they denounce each other, their sentence is increased to seven years. But since they cannot communicate, they often choose to betray each other to avoid the worst scenario.
Manor created the monster
This principle also applies to discount battles. It would be beneficial for a company to sell a product, such as a television, at its normal price. But she doesn’t know what the competition is planning. And it’s better to sell at a discount than to stay with unsold inventory.
Manor director Roland Armbruster confirmed that merchants are being caught in the trap of these promotions.
“Not offering discounts is no longer possible today”
Ironically, it was Manor who introduced Black Friday in Switzerland in 2015. You could say that the brand has created a monster.
Previously, sales had to be approved
But this monster was not left alone. “We are trapped in more and more promotional actions from which it is difficult to escape,” says Bernhard Egger, director of the .Swiss Traders Association. And this, even if these campaigns often only serve to stimulate consumption. In addition to traditional holiday promotions like Christmas or Easter, new events are now being added:
- Le Black Fridayfrom the United States, was introduced because many Americans used the Friday after Thanksgiving to do their Christmas shopping. The origin of its name is uncertain. Among popular explanations: traders enter the green (or black) of their accounts; their hands turn black from counting money; or again, black crowds of consumers invade the streets.
- Cyber Monday, also American, was created by online commerce in response to Black Friday. It always falls on the Monday following Black Friday.
- Le Singles Dayfrom China, is held on November 11 (11/11, the four “1”s symbolizing singles). Created in the 1990s as a day where single students gave each other gifts, it is today exploited by platforms like Shein or Temu to make it a day of massive promotions, exported as far as Switzerland.
In Switzerland, if these days did not emerge earlier, it is because of restrictive laws. It was only in 1994 that the Federal Council modified the law against unfair competition, by liberalizing the sales system. Before that, the balances had to be approved by the authorities.
Each year, the Blackfridaydeals.ch platform estimates the revenue generated by Black Friday in Switzerland. After an increase to 490 million Swiss francs last year, it forecasts a slight decline of 20 million this year. “Competition is calming down,” observes Julian Zrotz, director of Blackfridaydeals.ch. This is partly explained by the numerous bankruptcies of retailers such as M-Electronics, Sportx, Steg, Esprit and Microspot.
For critics of massive sales, this remains the only glimmer of hope: that days like Black Friday are gradually running out of steam. In 2020, a national advisor requested, in a motion, that the Confederation put an end to these practices. His request was rejected.
Translated from German by Tim Boekholt
