The Psychological Impact of Black Friday and Cyber Monday Discounts: A Statistical Study

Kate Sukhanova

from Techreport on 2023-12-06 11:01 (#6GY62)

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If you've ever shopped during Cyber Week, you're likely familiar with the psychological impact of Black Friday and Cyber Monday discounts. The biggest shopping days of the year lead to a global commerce frenzy - both online and offline - and many times, customers do end up with things they don't really need.

But what drives our behavior during BFCM? Why do we go crazy for the Cyber Week bargains and often fall into the trap of overspending?

In fact, there are several psychological reasons for that. In this guide, we'll dive into the psychological impact of Black Friday and Cyber Monday deals and explore the possible ways people can manage them better.

Key Statistics of the Psychological Impact of Black Friday and Cyber Monday Discounts

In the US, consumers spent a record of$9.8 billion on Black Friday in 2023.
A shopping momentum study suggests that if people made the first purchase, they're 77% more likely to buy a second, unrelated item.
60% of Generation Z and 54% of millennialsregret their Black Friday purchases.
88% of Black Friday shoppers have previously overspent during the occasion, going over their budget by the average of 511.90 ($644.99).
At least 42% of consumers regretted at least one Black Friday purchase and less than 65% of consumers use their Black Friday purchases one year on.

Why We Go Crazy for Black Friday and Cyber Monday Discounts black-friday-revenue-2020-2023.jpg?_t=17

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In the US, consumers spent a record of $9.8 billion on this year's Black Friday, according to Adobe Analytics, and Cyber Monday's spending last year was $11.3 billion. We'll now take a look at the key psychological aspects and trends of BFCM shopping and why they make us go crazy for deals.

The phenomenon known asFOMO, or fear of missing out, is a type of loss aversion tied to a consumer's predisposition to want to avoid losing something.

In the case of Cyber Week discounts, many of which are set for a limited time, consumers often fall prey to the FOMO tactics used by various retailers as they're scared they'll miss out on cheaper prices until next Black Friday, if not forever.

Indeed, a study by C. Hodkinson on FOMO Marketing appeals suggests that most people have received commercial appeals motivated by the missing out" factor. And it's a factor that marketers capitalize on - both during Cyber Week and on other occasions - and it works.

Some of the FOMO strategies retailers use during Cyber Week are:

Limited time deals
Members-only discounts and loyalty program perks
Information about how many items were purchased (e.g., hurry! this item is in 24 people's carts!" or only 3 left in stock!")
User-generated content discounts.

Statistics tell us that 60% of people make a purchase as a result of FOMO. Among millennials, the number is even higher, particularly when it comes to event purchases: 69% of millennials experience FOMO, making them a huge target group for FOMO advertisers.

Deals

Source: Hedonic Motivations for Online Shoppin

People love bagging deals."Whenever we get some sort of a bargain when we shop, we feel a sense of achievement, according to a study by Pui-Lai To and E-Ping Sung. The study claims that this sense of achievement is one of the primary motivations for online shopping.

And since e-commerce is king when it comes to Cyber Week, it's no surprise deals are a key motivation one for consumers during this period.

Another study by MSU and the University of Florida confirms the power of deals". It confirms that omnichannel price promotions, especially during the holiday season, are effective and can sometimes override rational thinking, even if the bargain isn't really a bargain.

Momentum

This aspect of Black Friday and Cyber Monday psychology is related to how our brain responds to rewards-based stimuli. A rush of success, such as the one we get from scoring a 75% off deal, gives us a shot of dopamine, stimulating our brain's pleasure centers.

Often, our brains get caught up in the moment after one such experience, and we crave more and more, which triggers additional purchases that we might not necessarily need. That sort of shopping momentum is what turns consumers into impulse buyers and is something marketers relentlessly capitalize on.

Retailers leverage shopping momentum to influence people into making purchases.

A study by Ravi Dhar et. al. cites excellent examples of people who were 77% more likely to buy a second, unrelated item, if they had bought the first item,whereas only 36% of those who didn't buy the first item were likely to buy the second.

These examples show the significant impact of the dopamine rush. Of course, dopamine makes us feel amazing, and a moderate amount of it is necessary for our survival. However, too much dopamine can do more harm than good and has been linked to addiction and substance abuse.

Being addicted to compulsive buying is a real issue, which is estimated to affect 1 0-15% of the population. Therefore, Black Friday shoppers should be mindful and stay safe. We'll go over some methods of managing the dopamine rush during Cyber Week in this guide.

Negative Consequences of Psychological BFCM Impact

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Source: Statista

Black Friday and Cyber Monday shopping might be the biggest retail events of the year, but it doesn't mean that they don't have negative consequences. In fact, 60% of Generation Z and 54% of millennials regret their Black Friday purchases.

Such regrets are one of the negative aspects of BFCM. In this section, we'll go over the negative psychological and other BFCM consequences for consumers.

Overspending Black-Friday-overspending.jpg?_t=1701207

Starling statistics tell us that 88% of Black Friday shoppers have previously overspent during the occasion, going over their budget by the average of 511.90.

Overspending of any kind inevitably leads to consumers having less disposable income. That leads to increased stress and anxiety and can make people turn to unhealthy coping mechanisms.

On top of that, Cyber Week overspending may mean that you have less money during the Christmas season, and your FOMO may, as a result, spiral out of control.

For those reasons, consumers should pay attention and be mindful of the psychological impacts and consequences of BFCM overspending.

Buyer's Remorse BLACK-FRIDAY-BUYER-REMORSE-STATISTICS.jp

A significant psychological impact of Black Friday shopping is buyer's remorse. That means the consumers rushed to buy things during Black Friday that they later regretted. And that's quite a widespread phenomenon.

For example, research by which.co.uk, done in 2021, tells us that 76% of British consumers that bought DIY products on Black Friday have later regretted doing so. For home appliance Black Friday purchases, the figure was 66%, and for fashion 49%.

The picture isn't too different across the pond. A study by Self tells us that at least 42% of consumers regretted at least one Black Friday purchase and less than 65% of consumers use their Black Friday purchases one year on. Two in five consumers even said they didn't need what they bought in the first place, according to a 2023 report by Starling.

Black Friday buyer's remorse can have a negative impact on not only consumers, but also retailers themselves. The negative emotions experienced by the customer discourages them from returning to specific retailers, resulting in the latter missing out on revenue.

How to Manage the Psychological Impacts of BFCM?

As we've shown, Black Friday and Cyber Monday can be emotional roller coasters with unintended consequences for your finances and mental health.

The FOMO, the sense of achievement from getting a deal, and the rush of dopamine after a bargain buy can lead to stress, anxiety, and even regret.

Here's how you can mitigate the negative consequences of Cyber Week:

Set realistic expectations which prioritize your needs
Set a budget and stick to it
Create a shopping plan, focusing on things you really need
Take breaks from shopping and try taking the time to make a thoughtful decision rather than shop impulsively
Avoid comparing yourself to others and how they shop - both in real life and on social media.

Is the Psychological Impact of BFCM Here to Stay?

Cyber Week is a symbol of shopping frenzy, discounts, and splurges. But is its psychological impact a long-lasting and inevitable aspect of today's consumer culture that'll be around for a long time?

Retailers will likely continue to use human psychology until they're incentivized or deterred to do otherwise.

There's no way to say for sure. But our emotions are biologically triggered by certain types of information, and we can't bypass our biology just yet. We believe that, as long as retailers continue to prioritize profits, they'll continue pushing Black Friday shopping, regardless of the impact.

We've gone over the psychological and other impacts of Black Friday and Cyber Monday shopping for consumers, highlighting the potential negative consequences of the worst aspects of Cyber Week.

We saw that FOMO, sense of achievement, and shopping momentum can be a shopper's worst enemy when it comes to BFCM shopping, and we addressed how these aspects can affect the shopper.

In conclusion, we'd like to remind everyone to be mindful of the BFCM (or any type of) discounts and to budget accordingly. Sometimes, you don't need another tiny vacuum cleaner with Turbo" in the name, as it's just like the one you got at the last year's Black Friday sale!

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