E-Commerce | 2. November 2021

What is Black Friday?

Black Friday was invented in the USA and is becoming increasingly popular in this country. We look at its history and meaning. by

Image Black Friday

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 take a closer look at what it’s all about and why these days are especially important 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 usually those of American department stores that trigger a real buying mania among their customers with mega special offers. Huge queues, tumultuous conditions and the big fight for the best deals. And that’s exactly how it all started.

Thanksgiving is one of the few holidays in the USA and is always celebrated on the last Thursday in the month of November. Black Friday follows directly after and is used as a bridge day by almost every American. This long family weekend is traditionally the first day of Christmas shopping and merchants offered more and more special deals for this strong sales day to set themselves apart from other sellers. Black Friday was born. Black originally resulted from “black figures” that retailers wrote on this day.

„The Black Friday is said to have gotten its name as the day that retailers in the US finally start to make a profit. Its also the traditional kickoff to the Christmas shopping season. Its become so popular that customers regularly die each year as hoards of shoppers rush to buy the best deal.“

Niall Conn, Product Marketing Manager at eClear – He is born and raised in California, USA and summarises on Black Friday

Black Friday in Germany

Gradually, the Black Friday wave spilled 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 in recent years. According to payment provider Klarna, 64% more sales are made on Black Friday than on a usual Friday. But do these supposed bargains really deliver what they promise? The consumer protection association has been keeping an eye on 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 super discount of 50-60% is then quickly relativised to 10-20%. In addition, merchants often make use of dynamic pricing, which is an important pricing instrument for them.

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 more expensive 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 terms of 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. It was created by Chinese students 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 a total of seven days, is only slightly below the sales level of Single’s Day.

Cyber Monday was created by internet giants like Amazon 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 also in 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 there, it is used to exchange gifts or redeem vouchers in bricks and mortar stores. Merchants offer massive discounts on this day in order to be able to sell surplus Christmas goods.

Less well-known in Europe, but still important, are the festival of lights Divali in India, El Buen Fin in Mexico and White Day in Japan and South Korea. Here, too, very large 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 word mark Black Friday

In the past, there were repeated disputes in Germany about the use of the term. It has been registered as a word mark at the German Patent and Trademark Office (DPMA) since 2013, which resulted in numerous reminders to online merchants who repeatedly used this term, who then applied for cancellation of the word mark several times. In order to end this ping-pong once and for all, the Federal Supreme Court in Karlsruhe ruled in 2021 that Black Friday is a discount promotion and thus a service provided by the merchant and therefore cannot be protected as a word mark.

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