Years ago, consumers planned to get up early and find the best holiday deals at the mall. Today in 2023, consumer behavior is different, and shoppers go online for the best digital deals on the internet. Between Black Friday and Cyber Monday, holiday deals are emailed to prospective consumers and advertised on websites and social media apps.
Sandeep Patnaik, professor and director of the marketing program for University of Maryland Global Campus (UMGC) School of Business, shares advice for how consumers can take advantage of holiday deals and how these deals benefit the long-term success of companies. This semester, Patnaik is teaching a course on Integrated Marketing Communications at UMGC.
What can consumers expect this year—will retailers offer the same type of deals they offered last year?
As we know, prices increased significantly during and post COVID. Even though the supply-chain issues have since resolved, the prices of many items have remained high. However, the perception that this year’s Black Friday prices are significantly higher than last year’s is more anecdotal than based in fact.
Retailers are now offering discounted prices almost a month in advance, so there are fewer surprises on Black Friday. However, this is also the best time to buy toys, electronic items—especially large televisions—and home appliances as retailers introduce new models into the market.
A recent Wallethub.com survey identified the best and worst retailers for Black Friday and reviewed more than 3,500 deals.
With the oversupply, what tips do you have for consumers for the upcoming shopping season?
Earlier in the year, there were reports that thanks to the inflation and the economy slowing down, retailers may be left with excess inventory that typically results in steep price cuts. Yet consumer spending has remained consistently strong and so discounts have not been as large as they were expected to be.
Nevertheless, shopping online is by far the best option. Apart from the convenience, retailers offer more promotions online than they do at stores. For example, retailers like Macy’s or Kohl’s have digital wallets loaded with available coupons that get applied at checkout. Price matching with other stores is also easier online.
Researching and comparing prices is essential before clicking on the “Buy” button. Websites such as Google Shopping, PriceGrabber and Shopzilla enable customers to compare prices in product categories. In addition, there are smart phone apps including ShopKick, ShopSavvy and Shopular, where you can scan barcodes/QR codes to compare prices and discounts. Slickdeals is another good crowd-sourced site to find deals and promotions.
Always use credit cards in online collection. In case of dispute, there is a possibility of getting refunded. Avoid using debit cards as money is directly debited from your bank account and is less likely to be refunded.
Most credit cards also offer cash backs that at least cover the sales tax. Sites like Cashbackholic help you determine the best cash back options for a retailer.
If you are shopping on Amazon then CamelCamelCamel is useful to track historical prices for a product. Browser extensions such as Keepa and Honey will show price histories and price alerts for a specific product.
It is important to bear in mind that online shopping also has some downside. Always make sure that the website is securely encrypted with "https" rather than "http." The "s" in https stands for secure, which indicates the website is using a Secure Sockets Layer (SSL) certificate. Another secure sign is a lock icon symbol appearing before the website. When using the internet in public places, use a VPN if possible. Other recommendations involve having a controlled payment number, which is an alias for a credit card number and an anti-fraud measure. Also, try a search engine like DuckDuckGo to protect one’s privacy online and use pay services similar to Paypal to keep credit card numbers private and safe.
With AI technology constantly evolving, how has it gotten better or more sophisticated?
AI has now been deeply embedded in search engines and websites to suggest and make recommendations based on browsing and purchase history. Increasingly, manual customer service operations have been replaced by utilizing AI chat bots and virtual assistants. These typically provide 24-7 customer support and even guide users through the buying process.
AI powered shopping platforms have become excellent in utilizing predictive analytics to anticipate customer preferences and trends. This enables companies to make better decisions on stock inventory and pricing. AI has also helped in implementing dynamic pricing algorithms to facilitate real-time price adjustments. The marketplace of today is much more nimble and agile than before thanks to using AI to make marketing decisions.
A recent trend is AI assisted social media content. Using Natural Language Generation (NLG), a software process that produces natural language output, social media content is being generated and widely used on social media platforms. AI tools also provide content suggestions based on trending topics and user interests.
What benefits do companies gain from participating in Black Friday and Cyber Monday sales?
The volume of sales increases exponentially during this period. This is a great opportunity for retailers to clear old inventory in order to stock up for Christmas. This is especially true for electronic or fashion items that are regularly updated and refreshed.
Customer acquisition is usually very expensive. However Black Friday offers an excellent opportunity to acquire new customers at a key time of the year. New techniques in customer relationship management ensure that marketers can track and leverage consumer behavior through Christmas and beyond.
Data has also shown that there is greater propensity to buy during this time. The shopping cart abandonment rates for retailers are significantly lower during Black Friday weekend compared to other times.
What other perks do companies receive from post-holiday online sales?
All the advanced tracking tools allow companies to gain a relationship with the customer and predict future desires and purchases. For example, if a consumer loves jewelry or fashion, chances are they will receive updates on the newest diamonds or clothes. This helps the brand or company to cultivate a relationship with the customer.
Bio:
Sandeep Patnaik is professor and director of the marketing program in the Department of Business Management at UMGC School of Business. He previously served as the program director in the MBA Marketing Program and, later, as program chair of marketing specialization in the Graduate School. His advertising strategy research at the Wharton School of the University of Pennsylvania was published in the handbook “Persuasive Advertising.” Patnaik is a past research director at Gallup and Robinson, a leading market research firm affiliated with the Gallup organization.
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