Here's How Retailers Are Manipulating You on Black Friday

iStock.com/andesr
iStock.com/andesr

For many people, one of the best parts of Thanksgiving is grabbing a newspaper to check out the retail circulars for Black Friday deals. The internet has influenced this tradition to an extent—many of the Black Friday ads are leaked online days or weeks in advance—but there’s still an undeniable psychological pull behind this national shopping day. For some retailers, the holidays can make up roughly a third of their annual revenue, with consumers spending $720 billion on Black Friday. Clearly, they have mastered the art of prying open our wallets.

How do they do it? According to a recent piece by Chavie Lieber at Vox, Black Friday is an exercise in shopper manipulation. Retailers typically begin by blanketing their email lists with notices of early sales beginning in late October and November, squeezing in valuable extra weeks out of the shopping season. Known as “Christmas creep,” it promotes Black Friday less as a single day and more of a month-long atmosphere.

Retailers also depend on promoting a level of anxiety among shoppers by depicting deals as being singular or exclusive. Insisting a deal is only good on a certain day or window of time creates a sense of urgency—even if that deal might crop up elsewhere during the year. Special “deals” might actually be just a method of creative pricing. Buy One, Get One, or BOGO, infers two items for the price of one, for example, but buying one item at regular price might not be much different than buying two on sale another time. Still, consumers are primed to respond to “free” without stopping to think if they’d consider the list price for the single item a good deal without the bonus.

A 2017 Money.com report made mention of the fact that many BOGO deals and other promotions aren’t exactly novel. Stores often repeat the same deals from one year to the next, making sure the economics of their promotions are in line with their financial goals.

Despite the hyperbole and convenience of online shopping, consumers still seem to make a ritual out of going out on Black Friday. (A 2017 survey estimated 25 percent of shoppers will head out to fight the crowds.) It’s less about the desire for deals than the competitive nature of the day. Snagging a deal with perceived exclusivity is satisfying. So is heading back to your car with bags of stuff you may never have bought otherwise.

Shoppers that are task-oriented feel a sense of fulfillment when they get rung up for an advertised deal. Social shoppers actually enjoy the crowds and feel a sense of camaraderie with bargain-hunters.

How you feel about Black Friday depends on what you’re looking to get out of it. If you’re after once-in-a-lifetime deals, you might be disappointed to find that you can save money during other times of the year. But if you treat the phenomenon as a challenge or a social gathering, then you’re likely to walk out of a store happy. If you're upbeat about having overspent, then retailers—and all of their subtle psychological tricks—have done their job.

[h/t Vox]

Here's What Investments in the Early Stock Offerings of Major Companies Would Be Worth Today

iStock.com/pressureUA
iStock.com/pressureUA

If you’re curious about what might have been when it comes to hypothetical stock market investing, a new infographic from the financial website How Much will get your attention. The site looked at the initial public offering, or IPO, of some of the biggest companies in tech and consumer goods over the past decades and how much that investment is worth today. (IPOs signal when stock is released for purchase by the general public.) Here's what they found.

A chart demonstrates the increase in value of stocks for successful companies
How Much

Putting down $100 for shares of McDonald’s when the company went public in 1965 and forgetting about it would have netted you $569,800 today. Even more profitable than fast-service burgers would have been Coca-Cola, although that stock would have had a century to appreciate.

The biggest score—and surprise—is Nike, which manages to deliver the biggest haul since its IPO launched in 1980. Nike stocks traded at just 18 cents a share then but ballooned to over $85 in February 2019. Microsoft was far more valued at the time of its IPO, trading at $21 a share in 1986, but its value has only gone up—a share is now worth $108.22 in 2019.

The site accounted for stocks that were held through falling and rising stock prices, stock splits, and stocks with dividends taken out and not reinvested.

While it may seem like a bit of financial daydreaming, the chart is an intriguing illustration of the brands that have resonated with the public over the years. When Starbucks went public in 1992, some prospective investors believed that selling coffee for the then-outrageous price of $1 per cup with Italian names that many people couldn’t pronounce was ridiculous. For others, believing in the power of the latte paid off.

[h/t Digg]

Golden Years: Could Living Out Your Life in a Holiday Inn Be Cheaper Than a Nursing Home?

iStock.com/vgajic
iStock.com/vgajic

In a wry commentary on the financial and logistical issues that come with advancing age, a number of people have proposed a more economically sound alternative to assisted living. Rather than enter a nursing home, they're suggesting an extended stay at a Holiday Inn hotel—continental breakfast included.

Here's the theory: If you assume an average daily cost of $188 for a nursing home—although according to the U.S. Department of Health and Human Services, the national average is actually $253 for a private room—the $59.23 nightly rate for seniors at a Holiday Inn hotel compares pretty favorably. The rate includes housekeeping services, free continental breakfast, complimentary toiletries, exercise equipment, and laundry. Socializing is available via lobbies or bar happy hours.

Variations on this unique strategy date back to at least 2011, with some mentioning a brochure that's been disseminated making a case for hotel retirement. More recently, a Facebook post by Virginia man Terry Robison was picked up by Michigan CBS affiliate WWMT and has renewed interest in the idea. There are obviously some gaps in such logic, specifically the idea that a hotel is equipped to monitor and care for elderly occupants with the same qualifications as staff in a nursing home or assisted-living facility. A maid can change bedding but is highly unlikely to assist with bathroom needs or helping physically compromised patients get around. You're also not going to find a Holiday Inn hotel tackling the potential liabilities involved in dispensing medication.

Then again, for those without such needs, it's not as far-fetched as it sounds. People on a fixed income, such as Social Security, might find good reason to consolidate housing costs in an extended-stay environment.

The idea speaks more to the financial crunch experienced by the elderly. People who are no longer able to live on their own are often faced with funding their "golden years" out of pocket, as health insurance and Medicare or Medicaid only cover such facilities in limited circumstances. Many people wind up dipping into savings, annuities, or reverse mortgages; others find they don't have the means to pay at all. The fact that a hotel chain can provide some of these services at a more reasonable cost than locations dedicated to assisted living is a rather alarming indictment of health care options for an aging population.

[h/t WWMT]

SECTIONS

arrow
LIVE SMARTER