A visit to your favourite e-commerce sites like Jumia and Kikuu and you will see the electronic banner and ads of “Black Friday” on your screen. Also, a walk into your favourite retail shops such as Melcom and Shoprite will reveal banners and fliers with heavy price discounts on their products under the headline of Black Friday.
So what is Black Friday?
Black Friday is a term used to describe the one day which typically falls on the last Friday of November, where several offline and online stores offer their products at heavily discounted prices for customers. However, in recent times the single day designated on a Friday in November has now shifted to the entire month of November with each Friday offering higher discounts to customers.
What is Black Friday – History
The term Black Friday was first coined in American society and used to describe a financial crisis. To be more specific, the US gold market crash on September 2, 1869. According to History, two (2) ruthless wall street financiers named Jay Gould and Jim Fisk, worked together to purchase as much as American gold with the intention to drive up the price and sell it for abnormal profits.
On Friday the 24th of September 1869, their conspiracy was revealed which led to stock prices plummeting and general bankruptcy.
A second version of the history of “Black Friday” is more distasteful. According to this particular version, Southern plantation owners in the United States dating to the 1800s could buy slaves at a discount on the day after Thanksgiving. Given the colour of the slaves, the term “Black Friday” was coined. This has led some few sections of individuals calling for the boycott of the holiday shopping period.
But many historians believe, this version has no basis.
What is Black Friday – The Philadelphia story
The true history of the shopping period was said to have occurred in the 1960s when police officers in the American city of Philadelphia used the term to describe chaotic scenes that characterise the day after Thanksgiving. On that day, hoards of shoppers and tourists will flood the city of Philadelphia ahead of the big Army-Navy football game held on that Saturday every year.
The Philadelphia police-community during that period worked extra-long shifts to ensure sanity and traffic flow.
By 1961, the term “Black Friday” had taken over the city of Philadelphia and later spread to other regions of the United States. Shops during this time will supposedly earn profits (“went into the black”) after an entire year of operating at a loss(“in the red”).
Today, “Black Friday” has been embraced by retailers across the world including Ghana.
What is Black Friday – How retailers make profits
Most retail shops rely on two strategies to ensure they make profits at the end of the Black Friday period. These strategies are:
Large sales volume: Retail shops offer attractive discounts on some selected items to get buyers’ interest. In this situation, retail stores are counting on high volume purchases not only on the discounted products but other products on offer to make up for the slash in prices.
Price discrimination: This is a selling strategy by businesses and retailers based on the belief that certain customers can be asked to pay more for a certain product or less based on such factors as demography and the perceived value of the product.
In price discrimination, sellers will offer the same product to customers at different prices based on the sellers’ notion of what they think they can get their customers to agree to. Price discrimination takes various forms. They include retail incentives such as bulk and quantity pricing and seasonal discounts, premium pricing, coupons, among others.
In the case of premium pricing, for instance, premium products are priced at a level beyond the marginal cost. For example, a breakfast shop may offer a regular cup of tea at GH¢10.00 while it offers premium tea at GH¢25.00.