The Black Friday and Cyber Monday bombardment of emails and adverts has begun.
This American phenomenon, which made its way over to the UK a few years ago, has become an annual frenzy of consumer meltdown. For some, it’s a chance to grab genuine bargains but for others, it triggers a perfect storm of behavioural biases that can leave household budgets shattered with Christmas related debt.
Black Friday for 2020 is 27th November, with Cyber Monday on 30th November. The latter is the biggest day of the year for online sales and with Covid restrictions making it harder to visit real shops, online activity will be heading for an explosion.
In fact, Black Friday seems to be more than just a one-day bonanza now, with retailers offering discounts for the whole week or even longer. Cyber Monday is tipped to trigger sales of over £3bn this year. That’s £3,000,000,000 on one day!
It’s worth taking a few moments to consider how all of this affects our thinking. Advertisers and marketeers are experts in behavioural psychology and they know what makes us part with our cash. Let’s look at three common behavioural biases that you may recognise in yourself.
This is the psychological effect of viewing a bargain based on the price reduction, rather than the price itself. We become ‘anchored’ to the original price and so we base our buying decision on a ‘saving’, rather than upon whether the actual price offers value for money.
As humans, we don’t like the idea of losing out – whether that’s losing money on an investment, or paying over the odds for a purchase. The ‘urgency’ of a Black Friday or Cyber Monday ‘flash sale’ can stir up a fear of losing out on a bargain. This behavioural bias can be very strong and cause us to react quickly to the perception of a great deal – even if we don’t need or want what’s on offer.
This is the heightened feeling of immediate gratification when comparing short term gain against long term benefits – when having something now feels much more attractive than it might by waiting until some point in the future
The more immediate the offer, the more dramatic the effect, so with limited time offers of a bargain, our brains can be tricked into making short term decisions without properly considering the long-term implications.
Beware of your ‘happiness chemicals’
In addition to these behavioural biases, we also need to contend with our own biology. At times, the brain can release natural ‘drugs’ that make us feel different. Here are three shopping-related chemicals that can give a boost of happiness, which could influence our decisions to buy:
Studies have shown that online purchases can create a sense of anticipation, more so than using physical shops, and this can cause our brains to release dopamine.
Psychology Today has an article that explains this in more detail, but with dopamine being one of the brain chemicals that create a temporary feeling of happiness, you can see how our own biology can push us towards irrational spending behaviour.
Another biological influence on how we feel is the neurotransmitter, serotonin – also known as he ‘happiness drug’. This can be produced by exercise, sunshine, thinking of happy experiences, giving to others and winning, among others.
It can also be a great antidote to boredom, so you can see why quick and easy online shopping could give a short term boost of happiness during lockdown. Buying Christmas gifts for others, ‘winning’ a time-limited discount on price and relieving boredom all rolled into one, big shopping spree.
This chemical is quite well known for the feelings of euphoria you might enjoy after exercise, but it can also be associated with addictions. ‘Retail Therapy’ is a familiar phrase and it stems from the idea that shopping can help overcome feelings of sadness, boredom, stress or depression – at least temporarily.
Try to be self-aware of your own feelings and biases when the bombardment of offers hit your inbox and social media this week. Before clicking the ‘buy’ button, just check-in with yourself to ask if you really want to spend that money, or is it your subconscious biases that are driving your actions?
The science of behavioural biases and the biology of our brains plays nicely into the hands of advertisers and marketeers. Black Friday and Cyber Monday will create a sense of urgency and scarcity, which for some people, will trigger all kinds of feelings and behaviours.
The long-term effects of over-spending and getting into debt can far outweigh the short-term positives For many households, it happens around this time every year, but it is possible to behave more rationally, with a bit of planning and self-awareness.