Black Friday is an exciting time for many shoppers. For many shoppers, they finally have a chance to buy items they have wanted all year. In this Bloomberg article, shoppers had a chance to buy a 50” flat screen for $298. The question then becomes why any retailer would sell so many items at such rock bottom prices. As a manager of a retail store I can tell you that it is difficult to make a profit on Black Friday.
It all comes down to price discrimination. Because of the craziness that is Black Friday, not all shoppers will even go out. In the weeks leading up to Black Friday I often hear customers tell me that they are willing to pay a little bit more now, in order to avoid Black Friday. This gives retailers an opportunity to price discriminate. As we know, not all shoppers are willing to pay the same price for an item. Because of this event, John Doe can have a similar TV as Jane Doe, but at a much different price, and both customers will be happy.
I personally would not want to camp out over Thanksgiving dinner just to save a few dollars, but I guess that’s why it’s price discrimination.