In America, the day after Thanksgiving has been referred to as ‘Black Friday’ since as far back as the 1950s.
It began as a way for department stores to mark the beginning of the Christmas shopping season with a big advertising push. This can still be seen by the sponsorships shown during Thanksgiving Day parades.
Fast forward to today and Black Friday has become synonymous with sales and rock bottom prices from nearly every retailer on the high street. You will struggle to walk down Princes Street, Buchanan Street or any other major retail area without being bombarded with sale signs and shops doing their best to encourage you inside.
But do we really need all these sales?
Of course, in today’s current financial climate, it may well be necessary to look out for sales and more affordable items. But does that mean we need to buy as much as the shops are encouraging us to? In recent years, with the introduction of online as well as high street sales, there has been an increase in the consumption of ‘stuff’. By ‘stuff’ we mean things that we buy that we don’t necessarily need but we buy because we’ve been lured in by the assurance that we’re getting a good deal.
Whilst we might take advantage of Black Friday sales to purchase items in advance for Christmas, or wait until Black Friday to purchase high value items we have been saving up to purchase, it is also likely that we use sales to purchase items we would otherwise not have considered purchasing, just because they are on sale. Retailers are experts at exploiting behavioural biases to encourage us to act in particular ways.
Sometimes we perceive an item as being ‘cheap’ without necessarily knowing whether or not it is indeed cheaper than it would usually be. Over the years various retailers have come under fire for putting up prices in advance of sales in order to make items appear cheaper, when in fact you are paying more than you would have been just a few months ago. Whilst there are rules about how long the price must have been higher for before it can be put on sale doesn’t mean that retailers don’t plan ahead with their pricing to take advantage of seasonal sales!
Sales also encourage us to spend because we are hard-wired to satisfy our present wants before the needs of our future selves. Whilst this might have been beneficial for prehistoric hunter-gatherers or medieval peasants sleeping through much of the winter, our brains need constantly reminding that getting what we want now isn’t necessarily going to bring us the greatest happiness in the long run. Sometimes it’s better to put that extra £500 into our ISA or our pension rather than spending it on something new we might not need.
Notwithstanding the ethical implications of retailers persuading us to spend money, we understand that sometimes it’s a good idea to make the most of some sales in the lead up to Christmas. To help you think differently about this we’ve had a look for alternatives to Black Friday that might help you avoid the overconsumption of ‘stuff’:
Small Business Saturday (https://smallbusinesssaturdayuk.com/about-us)
- Held on the 3rd of December this year, Small Business Saturday aims to highlight and promote small businesses across the UK. You can use their site to search for small businesses in your area. Some of them may be hosting sales or events so you might find yourself a bargain!
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This is an American movement and there’s no official counterpart in the UK. But why not have a look for local craft fairs. Take a look at local community pages on Facebook or notice boards in your local area. You might be able to find some truly unique Christmas presents.
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Why not consider doing your Christmas shopping at your local charity shop? You will be amazed by the things that people will donate. You can find some really great bargains amongst the things that people no longer want. You might even find things that are new with tags.
So, although Black Friday may seem like a good idea at the time, it’s really important to consider the impact it can have on your finances. Before you make a purchase ask yourself:
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Do I need it or do I just want it because it’s on sale?
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Would I have bought it full price?
And most importantly, is it actually a good deal or is it just good marketing?
It is important to take professional advice before making any decision relating to your personal finances. Information within this article does not provide individual tailored investment advice and is for guidance only. We cannot assume legal liability for any errors or omissions it might contain. Ethical Futures llp is authorised and regulated by the Financial Conduct Authority.