Do discounts really drive purchase?
We have survived the biggest retail events of the year, a period that traditionally is only focused on discounting physical goods – apparel, products, hardware and more.
This year we learned that it was the best-ever Black Friday in Amazon’s history, boasting that it sold “hundreds of millions” of products. Worldwide, more than four million beauty products were purchased via Amazon, best sellers including L’Oreal Paris Mascara.
This year also witnessed a rise in companies taking a stance against consumerism and reactive, temptation buying. The Make Friday Green Again collective led by French fashion designer Nicolas Rohr was a fantastic example of more than 300 clothing retailers agreeing to opt out of Black Friday in a move to protect the environment by encouraging people to look in their wardrobe at what they could recycle and repurpose.
My pick on beauty product brands that chose to boycott Black Friday was Deciem, “the abnormal beauty company”. In Deciem’s own words, “Hyper-consumerism poses one of the biggest threats to the planet, and flash sales can often lead to rushed purchasing decisions, driven by the fear of a sell-out. We no longer feel that Black Friday is an earth or consumer-friendly event, and have therefore decided to close our website and stores for a moment of nothingness”.
Shutting down their online and physical stores globally last Friday was a bold move. It did spark criticism when they then offered a 24 per cent discount for the entire month of November across all products.
Their response was they wanted to encourage people to not get caught up in the hype of sales and instead take time to consider what they actually need to buy versus want to buy. The company strongly believes “that skincare decisions should be based on education rather than impulse,” its new approach aims to “provide the time for research, reflection, and consideration”.
The behaviour of customers booking hair or beauty appointments through our own platform, Flossie, challenges the idea that people will only buy when there’s a sale tag attached.
Sales via Flossie peaked last Friday, with a 10 per cent increase in revenue for salons compared to 2018, with the average customer spending $78 upfront to book a hair or beauty appointment. The appeal of an offer did draw in the crowds, yet when it came to completing a booking, more people paid for appointments offering $5-10 off than those offering $15-20 off.
Diving further into this number, we can see a spike from customers who bought services that weren’t even on sale. The discount may have been the invitation to enter the store, yet the purchase was based on a decision on what suited the customer more. In this instance, it’s about the availability of the service – does the time suit your schedule?
In terms of what people were searching for over Black Friday, there was a significant spike in searches for “women’s haircut and blow wave”. Considering this isn’t a luxury item to buy, it could be said that people were only buying what they needed compared to what they desired. Haircuts were closely followed by hair removal, manicures, lash tinting and lash extensions.
Compared to last year, bookings for lash extensions increased 20 per cent, demonstrating the growing popularity of this “accessory service”. Although spray tans ranked high in searches, they didn’t result in the same volume of bookings. We can assume – especially at this time of year – that people are booking spray tans around events, and if the availability doesn’t suit their needs, then they won’t book it even if it is discounted.
What can we learn from how people paid for services on Black Friday? Twenty per cent of customers used buy now pay later (BNPL), while the majority made one-time payments.
Twenty-four-hour shopping was appealing for customers booking appointments through Flossie over Black Friday. Sales occurred throughout the entire day and night, including at midnight and 5am. Forty per cent of bookings were made over the lunchtime period, signalling a desire to get things done on-the-go.
So what can we take away from all this data? Certainly Black Friday is an opportunity to increase revenue, but customers aren’t buying services because of the discount according to Flossie data. Bigger discounts don’t persuade purchases either.
Sure, it’s a great reason to get people to enter the store, but as the data shows people will buy based on what suits them.
Cath Carlsen is chief marketing and operating officer at Powered by Flossie, a New Zealand marketplace used by more than 70,000 people to book hair and beauty services online.
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