Black Friday made its way into the UK with a dramatic debut in 2010. Originally a purely American tradition tied to Thanksgiving, Black Friday drew large crowds, attracted by heavy discounts. In its first few years in the UK, the event was marked by chaotic scenes, with news footage showing shoppers physically clashing in stores, all in an effort to claim limited-stock bargains. Security guards often struggled to maintain order, underscoring the intense demand and feverish anticipation surrounding the day.
This pattern of consumer mania typically kicked off on the Friday following Thanksgiving and ended by Friday. However, as Black Friday evolved, so did its reach and format. Online retailers eagerly joined in, adding convenience for consumers and extending the event’s shopping hours well beyond the physical limitations of store hours.
It may be my perception, but the early discounts offered were genuinely substantial, often 40-50%. However, it also felt as though a lot of these offers were for “special” items - limited stock, headline-grabbing deals. To get one, you had to act fast and be committed!
Now Black Friday feels different. Discounts are smaller and often on items available all year round, and frequently at a similar level of discount.
The journey of Black Friday illustrates the challenges faced by negotiators everywhere. How do I prevent “once-in-a-lifetime” discounts from becoming everyday expectations that hurt my profit margin?
The problem with selling a TV at a 50% discount is that it is effectively a simple and passive ‘haggle’. We have only one variable to negotiate around – price. The customer is required to do nothing to secure this other than choose and pay.
Sometimes offers are more complex - like “buy two, get one free.” Volume is now in play. If it’s a frequently used item and buyers have cash, it’s a low-cost concession for retailers, who wait three times as long to sell again. Consumers learn they rarely need to pay full price.
The alternative strategy for retailers is EDLP – Every Day Low Prices. No deep discounts, just solid dependable prices week in and week out. The phenomenal success of Aldi and Lidl attests to the popularity of this. The consumer and retailer build trust. You don’t ask me to buy more as prices stay steady, making it easy - and earning loyalty in return.
Sounds perfect – but what about the undeniable thrill of finding a bargain? The answer we have all settled upon is ‘middle of Lidl, Aldi’s middle aisle or as it is also known ‘the aisle of shame’! A procession of items that none of us knew we needed at prices we think are pretty good, but as we hadn’t come up with a plan to buy a USB rechargeable illuminated fondue set, we don’t really know!
What do these concepts and strategies tell us? If you repeatedly offer the same thing, at the same discount, the other side will very rapidly consider this the norm. Precedent is the enemy of the negotiator.
Instead, can you create bundles? Products that must be purchased together, push the other side to experience broader elements of your offer. This has the advantage of changing the perception of the buyer that they weren’t given the discount for nothing which subsequently means that they place a higher value on this.
Consider EDLP or at least set a realistic, consistent price. If you change it, do so only for something valuable to both sides. Think more broadly, could it be for an introduction to a new prospect or for agreement to a published case study?
It’s challenging, but be creative, focus on value, and build trust.
