With less than four weeks to go, it’s that time again – Black Friday is just around the corner. In a four-part series, we’ll have a closer look at what it’s all about and why these days are crucial for e-commerce merchants. Let’s start with a little review.
How it all began
When you think of Black Friday, the first images that pop into your head are those of American department stores that trigger a real buying mania among their customers with mega-special offers. Massive queues, tumultuous conditions and the big fight for the best deals. And that’s precisely how it all started.
Thanksgiving is one of the few holidays in the USA and is always celebrated on the last Thursday in November. Black Friday follows directly after and is used as a bridge day by almost every American. This extended family weekend is traditionally the first day of Christmas shopping, and merchants offer more and more special deals for this strong sales day to set themselves apart from other sellers. Black Friday was born. Black initially resulted from “black figures”, retailers wrote on this day.
„Black Friday is said to have got its name as the day that retailers in the US finally start to make a profit. It’s also the traditional kick-off to the Christmas shopping season. It has become so popular that customers regularly die yearly as shoppers rush to buy the best deal.“
Black Friday in Germany
Gradually, the Black Friday wave spills over into other industrialised nations. It has been popular in Germany since 2013. Large American companies such as Apple made it known in this country. However, it is used more as an online shopping promotion and has developed rapidly recently. According to payment provider Klarna, 64% more sales are made on Black Friday than on a usual Friday. But do these supposed bargains deliver what they promise? The Consumer Protection Association has been watching them for a long time and criticises, above all, the “recommended retail price”, which is often used as a basis but does not correspond to the final market price of the products. A 50-60% super discount is then quickly relativised to 10-20%. In addition, merchants frequently use dynamic pricing, a vital pricing instrument.
Dynamic Pricing
With so-called Dynamic Pricing, online merchants have their adjusted prices calculated using automatic algorithms. Special software solutions automatically read the price data of competitors from databases, and price bots collect the data from marketplaces and price comparison sites. The algorithms calculate the optimal price for the merchant based on parameters such as prices of certain competitors, profiles, click numbers, taxes or own costs. The advantages that result for online merchants are an automated adjustment to the market situation in real time, automatically optimised prices, higher turnover due to more customers, since most customers buy online “price-driven”, and higher margins when setting prices. Originally, this model was used in the travel and tourism industry, where during peak periods such as holidays or public holidays, prices are raised for a short time due to increased demand. Today it is also used for seasonal products. For example, swimwear is cheaper in winter and skiing equipment is pricier than in summer. On special sales days, such as Black Friday, online merchants use dynamic pricing accordingly. In addition, there are many other important promotion days worldwide.
Other shopping days in the world
Black Friday is not the only shopping day in the e-commerce world – and by far not the strongest in sales. The two strongest promotion days are celebrated in China. Single’s Day, for example, beats Black Friday many times over in terms of sales. Chinese students created it and has been celebrated on 11 November since 1993. Today, it is mainly the Chinese e-commerce giant Alibaba that runs this special sales day. The Chinese New Year, which lasts seven days, is only slightly below the sales level of Single’s Day.
Internet giants like Amazon created Cyber Monday to push customers out of department stores and more into the online shopping world. It always takes place directly after Black Friday and, apart from the USA, is particularly popular in Latin American countries such as Brazil or Argentina and the United Kingdom.
Boxing Day is also popular in the UK. It is celebrated on the day after Christmas, 26 December. Since this day is not a holiday, it is used to exchange gifts or redeem vouchers in brick-and-mortar stores. Merchants offer massive discounts on this day to be able to sell surplus Christmas goods.
Less well-known in Europe, but still significant, are the festival of lights Divali in India, El Buen Fin in Mexico and White Day in Japan and South Korea. Here, too, massive discounts are granted, resulting in a veritable shopping frenzy.
Last but not least, Amazon Prime Day. With this, the US shopping giant has finally created its own consumer festival. For two days, Prime members receive exclusive discounts. The annual Prime Day took place in 2021 on 21 and 22 June. According to Statista.de, Amazon turned over around 11.2 billion US dollars in the 48 hours.
The Trademark Black Friday
The German Federal Court of Justice (BGH) dismissed the appeal against the “Black Friday” trademark on 29 June 2023, making the cancellation ruling legally binding. After a six-year legal battle, the German Patent and Trademark Office must cancel the trademark. BlackFriday.de, which took action against the trademark, welcomes the decision. The fight against the trademark has ended, although the legal dispute continues elsewhere. Since 2016, the trademark owner has been issuing warnings to companies that used the term “Black Friday” in their advertising and demanding payment of licence fees.
