According to Shopify, in 2018 merchants on the Shopify platform alone processed over $1.5 Billion dollars in total sales during the BFCM (Black Friday, Cyber Monday) four-day holiday. Peaking at 10,978 orders per minute and $37 million in sales per hour. With a 60.9% more hourly sales than 2017.
Well, the numbers feel a little bit overwhelming to even read. But actually, they make perfect sense. Aside from the fact that this is a holiday season. In BFCM, businesses in every industry launch huge sales, discounts and offers that are crafted to trigger our primitive psychological nature as humans. Causing a shopping frenzy that generates billions upon billions of dollars in revenue.
The following are 2 of the main psychology principles that marketers use consistently in crafting their BFCM holiday offers. The fear of missing out and the scarcity principle. Let's dive in!
FOMO (Fear Of Missing Out)
As humans, we are wired in a way that psychologist call "loss-aversion". Simply put, loss aversion is the fact that our brains and psyche hates to lose more than it loves to win. In terms of eCommerce this translates to a buyer who sees an item he likes but don't buy it as there's no urgent need for it now or because it would harm the budget, then three days later they see the same item discounted "for a limited time" and decide it's time to buy it. What happened here was not moved to actually purchase the item because he liked it, but he took out his credit card when he saw a discount that he might lose.
Loss aversion is the huge driver behind what psychologist call FOMO or Fear of Missing Out. Fear of missing out is formally defined as "our fear that something exciting might happen or a lucrative opportunity might come about without us being part of it". This principle shines the brightest in the world of sales, retail and eCommerce. It's about putting a time limitation on your offer that motivates the customer to buy it now in order to "not miss out" on the opportunity. Like "limited time only" offers, or our all-time favorite, flash sales!
Flash sales are largely based on the concept of FOMO. You provide customers with a very lucrative opportunity or a huge discount for a limited amount of time. If they didn't buy now they will miss out on the offer that many others are redeeming. It was proven over and over again that when FOMO is utilized the right way, it works miracles. The following is an example of a flash sale by J. Crew for that utilized FOMO by placing a "ends tonight" ribbon at the upper left of the discount's digital flyer.
Amazon also uses FOMO with the one-day shipping options that sometimes appear beside the "buy now" button. If you ordered within around 20 minutes, you would get one-day shipping at checkout without any extra costs.
Or Amazon's Lightning Deals, which are basically Amazon's version of flash sales
The scarcity principle is a psychological pattern that is hardwired into humankind. Simply put, we tend to perceive things that are scarce and less available as more valuable. This psychology principle dictates why designer clothes, for instance, are very expensive. There are only a few pieces, they're scarce. While you can always buy another blazer (a really similar one, actually) for $30 at Target. It's just knowing that this Blazer is a designer item, it gets perceived that it's a rare item that's not commonly found, that can make it 200x more expensive. This principle is heavily used in sales, especially in online retail. It can range from "limited quantity only" sale all the way to the famous "hurry, while stocks last". These are a few examples of the scarcity principle in action.
Bookings.com does this with the "lock in this great price while you can"
Or Amazon's famous "X items left in stock"