Showing posts with label consumers. Show all posts
Showing posts with label consumers. Show all posts

Thursday, November 23, 2017

Guest Post: Why Black Friday leads shoppers to behave badly

Jaeha Lee, North Dakota State University

The manic nature of Black Friday has at times led shoppers to engage in fistfights and other misbehavior in their desperation to snatch up the last ultra-discounted television, computer or pair of pants.

What is it about the day after Thanksgiving – a day meant to celebrate togetherness and shared feasting – that inspires consumers to misbehave?

Fellow researchers Sharron Lennon, Minjeong Kim, Kim Johnson and I have in recent years been exploring the causes of consumer misbehavior on Black Friday, historically one of the busiest shopping days of the year. Our latest research shows how our emotions affect our likelihood to misbehave, as well as a significant difference between men and women.






A fight breaks out in a Walmart in 2016.



Black Friday mayhem


The term “Black Friday” first appeared in the journal Factory Management and Maintenance in 1951. It signals the beginning of the Christmas shopping season, when many retailers finally go “in the black” – that is, they become profitable for the year.

More recently, Black Friday has become a setting for consumer misbehavior as shoppers compete for deeply discounted products. Fighting, pepper-spraying, dumping merchandise, ransacking stores, robberies and shootings have all been reported on Black Friday. The Occupational Safety and Health Administration has even issued guidelines to retailers about how to avoid injuries and deaths.

In the U.S., the most shocking example of misbehavior occurred in 2008 when a Walmart worker was trampled and killed as shoppers rushed to enter the store.

So what causes some consumers to behave so badly?

It starts with the unique characteristics of Black Friday sales promotions and the frantic retail environment they create. Retailers heavily promote their most desirable items at deeply discounted prices in order to encourage more foot traffic. Demand for those precious few items naturally exceeds supply. That imbalance can lead to aggressive consumer behavior.

But another key ingredient is sleep deprivation, which results from the very timing of the sales, which may begin at midnight or early in the morning and require eager customers to camp outside a store all night. That means many Black Friday shoppers aren’t functioning at their best, resulting in grumpy moods and bad decisions.


Impact of crowded stores


Research my colleagues and I conducted in 2014 examined how two situational variables – large crowds and the rude, argumentative behavior of fellow shopper – affected the likelihood that otherwise jovial consumers would become Black Friday miscreants.

We created a questionnaire based on past research of the topic and asked several hundred students at four universities located in different regions of the country to fill them out. We analyzed only results from the 260 participants who reported to have shopped on Black Friday in the past and completed the survey.

On the whole, we found the large crowds that congregate on Black Friday actually had positive effects on consumer behavior, reducing dissatisfaction and aggression and thus errant activity as well. That is, as long as the shoppers were expecting to have to navigate very crowded stores.

All it takes is one bad seed, however, to ruin the experience for others. Being unable to purchase the advertised product seems unfair, leading to misbehavior and in turn making others more likely to follow suit.

Since an expectation of crowds seemed to make it less likely that shoppers would perceive inequities, posting signs at entrances or in advertisements reminding shoppers to bear with Black Friday’s crowded conditions may help keep customers civil.


Emotional shoppers


In our latest study, published in June, we examined how our emotions and personality traits influence consumers and whether there are differences between women and men.

Black Friday, Northern Virginia, 2013 (c) Rick Sincere
Black Friday, Northern Virginia, 2013 (c) Rick Sincere
We designed an online survey in which participants – 411 students who indicated they had previously shopped on Black Friday – were randomly assigned to read one of three scenarios involving a customer trying to buy a discounted item the day after Thanksgiving.

In two of the scenarios, the customer went home empty-handed after not being able to make a desired purchase, either because the retailer ran out of the product or because the promotion had ended. In the third one, the participant read about a customer who managed to successfully snare the desired product – either a smartphone or clothing – at the greatly reduced price.

After reading the assigned scenario, participants completed a series of scales that assessed their emotions such as anger and thrill, their personality traits and their likelihood to misbehave on Black Friday.

Our findings showed that participants – both men and women – who had an emotional response to the scenarios, whether negative or positive, were more likely to be willing to engage in consumer misbehavior.

As for differences between the sexes, we found that men’s capacity for self-control was the primary trait that determined whether they were likely to behave badly on Black Friday.

In other words, possessing more self-control mitigated any anger that might lead to misbehavior. For women, self-control was irrelevant. What mattered for them was public self-consciousness – that is, how others viewed them. And surprisingly, women deemed to have a high degree of public self-consciousness were more likely to misbehave if they got angry.



Battle of the fittest


Black Friday creates a competitive environment since not all shoppers can get what they want. Thus, this competitive environment causes both positive and negative emotions. Consumers are thrilled when they get what they want and frustrated when they do not.

For retailers, Black Friday is meant explicitly to attract these large crowds in hopes of ringing in more sales. But besides leading to minor misbehavior, more people jostling over a small number of deeply discounted items can also lead to injuries or even wrongful death lawsuits. Retailers need to balance making more money and the safety of their customers and workers.

In general, reducing the number of unpleasant customers would improve the shopping experience for other shoppers as well as for store employees. Rather than ignoring or accommodating such shoppers, retailers should be proactive by clearly communicating store policies and quickly reacting to signs of aggression by removing the bad actors. Other steps retailers could take include adding checkout lanes to speed up traffic and putting more employees on the sales floor to improve responsiveness to shopper concerns.

Ultimately, customers are responsible for their own behavior. When shoppers behave responsibly, the Black Friday experience isn’t spoiled for their fellow customers and everyone is able to buy their digital goods and clothes in a safe and relatively stress-free environment.

The ConversationThis article incorporates elements of a piece written by the same author and published on Nov. 28, 2014.

Jaeha Lee, Associate Professor of Apparel, Design and Hospitality Management, North Dakota State University

This article was originally published on The Conversation. Read the original article.




Saturday, November 18, 2017

Guest Post: Why does the price of turkeys fall just before Thanksgiving?

Jay L. Zagorsky, The Ohio State University

Thanksgiving is a great U.S. holiday during which people consume huge quantities of turkey, stuffing, cranberry sauce and pie.

One of the stranger things about this holiday, however, is that a few days before everyone starts cooking, whole turkeys are suddenly discounted by supermarkets and grocery stores.

And this happens every holiday season: The price falls just before Thanksgiving and stays low until Christmas. For example, in the average year, November’s price per pound for turkey is about 10 percent lower than the price in September.

Why does the price come down at the one time of the year when demand for the product spikes the most – before a holiday that’s literally dubbed “Turkey Day”?



The turkey demand curve


Most people expect turkey prices to rise because many more people are buying the birds. My family is an example of this buying phenomenon, since we almost never eat turkey except at Thanksgiving.

In general, when there is a fixed quantity of something to sell and demand for the product spikes, prices rise. This is why a dozen long-stem red roses typically cost a lot more on Valentine’s Day than at other times of the year.

In more formal economic language, the demand curve for turkeys shifts outward at Thanksgiving, which means people at this time of year are interested in buying more of these birds regardless of the price. Even the most casual shopper in food stores this week can observe this increase or shift in demand as more people are buying turkeys to cook.




turkey economics demand supply price

This graph shows what economic theory on supply and demand says is supposed to happen, and what actually does when it comes to turkeys.
Jay Zagorsky, Author provided




However, each Thanksgiving the price of turkeys doesn’t rise. Instead, it falls during the holiday period as many stores advertise special low turkey prices, and over time turkey prices have generally fallen.

Not only do supermarkets that sell turkeys year-round make the bird a featured item, but some food stores and warehouse stores that don’t typically sell whole turkeys offer them for a limited period of time to customers. This means not only does demand for turkeys increase, but the supply of turkey increases too. This boost in supply drives prices downward.



Food stores are not upset that the price of turkey falls at this time of the year because they are interested in maximizing profits – not in maximizing the revenue they get from selling each bird.

Turkeys are not very profitable items, even at full price. The wholesale price of a whole frozen turkey in 2016 was US$1.17 per pound, while the average retail price was $1.55. This means at full price stores made less than 40 cents per pound. To give you a comparison, the USDA reports the difference between the wholesale and retail price in 2016 was $2.79 per pound for beef and $2.25 per pound for pork.

Stores, however, know that people coming in to buy turkeys are likely to purchase other items, too, such as seasonings, disposable roasting pans and soda. The other items are where stores make their money, since the profit margins on these items are much higher than on frozen turkeys.


Why does the turkey supply skyrocket?


Because of the desire to attract people to stores, the supply of turkeys needs to skyrocket just before the holiday so that freezer cases overflow with the birds.

How does this dramatic increase in supply happen? It occurs because turkeys are slaughtered continuously throughout the year and then put into cold storage.

The Department of Agriculture has tracked the amount of turkey in wholesale freezers for the past century. The past few years of data show turkey stocks slowly build up each year until they reach a peak in September, when the U.S. has over half a billion pounds on reserve. Between September and December, turkey stocks plummet as stores purchase over 300 million pounds’ worth and put them on sale. Then farmers, processors and wholesalers slowly rebuild their stocks for the next year’s holiday season.



The 500 to 600 million pounds of turkey in cold storage by the end of each summer means there are almost two pounds of turkey for every man, woman and child in the U.S. waiting to be released each holiday season. That figure doesn’t include live turkeys, which some people prefer, and also doesn’t take into account vegetarians (about 3 percent of the population), newborns who are not eating solid food (about 1 percent) and people like my brother-in-law and me who don’t like eating turkey at any time of the year.




Thanksgiving dinner turkey trimmings

This good-looking bird won’t be on the author’s end of the table.
Shutterstock.com




What does this mean for the typical consumer?


The National Turkey Federation, the organization whose goal is to get the country to eat more turkey, estimates that 88 percent of Americans will eat turkey on Thanksgiving. If buying turkey is on your holiday or regular shopping list, then from now to Christmas it is the time to stock up, when prices are cheap. Otherwise, eating turkey at other times of the year means your wallet will get plucked for more money.

The ConversationFor those of you eating turkey during this holiday, enjoy. My brother-in-law and I will be happily ensconced at the end of the table feasting on lamb and, while not eating turkey, appreciating and giving thanks for a day to be with friends and family.

Jay L. Zagorsky, Economist and Research Scientist, The Ohio State University

This article was originally published on The Conversation. Read the original article.