Five cognitive biases that explain the popularity and psychology of Black Friday
For November we have been focusing on biases within the workplace. In short, a bias is our brain making shortcuts, we all have them and they are prevalent in most things we do. We believe that there is a huge benefit of becoming aware and building an understanding of biases which affect us all daily. Once we can recognise our personal biases and act, we can avoid being limited by them.
As learning providers, it helps to understand human decision making and to better comprehend these behaviours we need to understand cognitive biases. Cognitive biases describe the irrational errors of human decision making. So, with that in mind, and as it’s Black Friday the mass consumerism holiday that benefits from errors of human decision making, we are going to run through the cognitive bias that is prevalent within the holiday. Our ambition from this post is that once you acknowledge these biases your behaviour around Black Friday will change, this is a similar approach we use in our unconscious bias module.
Here are five cognitive biases that explain the popularity and psychology of Black Friday from which you can understand, acknowledge and avoid the bias. Courtesy of – https://www.convertize.com/psychology-black-friday/
1. FOMO (Fear of missing out)
In the lead up to Black Friday, stores flood social media with bargain deals. They also receive substantial attention from news channels. This media saturation exerts a powerful influence over consumers, creating the impression of a major social occasion and establishing a Fear of Missing Out.
Worried about overlooking a potential bargain? You might be experiencing FOMO…
2. Scarcity effect
Retailers are experts at communicating product scarcity. For example, how many times have you heard the phrase “buy whilst stocks last” and “selling out fast,” only to be told the same thing the following week? The ‘Scarcity Effect’ causes individuals to place a higher value on scarce objects and a lower value on those readily available.
3. Social proof
Why do some people spend all night queuing outside a shop? Because other people do, too. ‘Social Proof’ describes how, when individuals are unsure how to behave, they will often look to others for reassurance. Have you ever joined a queue without knowing exactly what it was for?
4. Commitment and consistency
So, you’ve driven to the store, jostled with the crowds, and searched the shelves for bargains. That was a significant commitment to make, both in terms of time and in effort. So how do you justify it? Well, you make a purchase (or two, or three…). This is referred to as ‘Commitment and Consistency.’ Retailers make use of this effect throughout the year, by hiding prices so that shoppers are forced to demonstrate their interest in a product.
Have you ever left the supermarket empty handed…?
5. Anchoring effect
Black Friday prices are already cheap, but how do the stores make them look even cheaper? Stores often display the original price of the product ($59.99) struck through above the new reduced price ($39.99). The Anchoring Effect describes the way individuals use the first piece of information they are presented with as a point of reference when making judgements about subsequent pieces of information
Now you understand the cognitive biases behind Black Friday, we urge you to be more conscious of your spending.