Black Friday And Cyber Monday - Real Savings Or Excessive Hype?
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Black Friday And Cyber Monday - Real Savings Or Excessive Hype?

The end-of-year period is full of festive traditions and celebrations. Diwali, Thanksgiving, Hannukah, Christmas, Black Friday, Cyber Money. Yep, you’d be forgiven for identifying those last two as the odd ones out. But that’s not the only reason to treat them with a little suspicion. Every year, retailers do their best to get you to part with your hard-earned cash (or your credit) with the promise of unmissable savings. This year, while the marketing machines were in full flow, ITMAGINATION’s Data Scientists were using big data and machine learning to study the behavior of online retailers in Poland. Their goal? separate fact from fiction and answer the key question: Were there really any good deals out there on Black Friday and Cyber Monday?

Black Friday is ‘celebrated’ on the Friday immediately after the US holiday ‘Thanksgiving’. This year, Black Friday took place on 29 November. At ITMAGINATION, the study started much earlier. Back at the beginning of November, ITMAGINATION recorded the prices of a selection of products at leading online retailers in Poland. The aim of capturing price information at this time was to understand how Black Friday ‘savings’ compared to prices from a regular retail period. A similar comparison was then made with those retailers that held Cyber Monday ‘sales’. Piotr Towarek, Head of Data at ITMAGINATION and Ewa Kryczka, Data Team Leader, explain their findings.

Once Black Friday and Cyber Monday rolled around, ITMAGINATION was able to see that many retailers had increased their prices around the middle of November. The intention behind this move, presumably, was to create the impression of dramatic, attention-grabbing price reductions on Black Friday. This isn’t to say that it all price reductions were completely artificial. In some instances, it was possible to save more than 10% on certain goods during Black Friday sales, relative to their early November prices. In some cases, savings were relatively meagre, such as in the computing segment, where price reductions were found to be in the region of only 2%. Shoppers hoping for increased reductions on Cyber Monday were, for the most part, disappointed, as prices – at least in Poland – bounced back up again.

Gamers getting gamed?

According to ITMAGINATION, one of the areas where shoppers were able to benefit from significant (albeit probably below-expectation) price reductions was with strategy and fantasy boardgames, as well as computer (PC) and video games. The average price reduction on Black Friday, relative to the start of November, for games was 9% (for PC games it was 14%, for video games it was 8% and for board games it was just 3%).

But this is where the mid-month price increases serve to exaggerate the Black Friday promotions. Compared to the mid-November (i.e. post-increase) prices, the average ‘saving’ on Black Friday was 16%. For those considering a purchase on this day, the impression might have been that one was getting a good deal. Unfortunately, that wasn’t always the case. In fact, ITMAGINATION found that, in comparison with prices at the start of the Black Friday week (25 November), one-third (34%) of analyzed products was more expensive on Black Friday than it had been at the start of the week, a similar number (36%) were cheaper, and a slightly lower number (30%) remained unchanged. Not quite the sales bonanza most shoppers envisaged. Indeed, one could argue that Black Friday was a game all in itself, one in which strategic shoppers either kept their powder dry or sniffed out the good deals, while the over-eager bit at the first sniff of a sale and ended up feeling a bit like ‘you lose’.

Computer price crash or Black Friday failure?

ITMAGINATION research and analysis found that the smallest reductions were offered by retailers of computer products (e.g. computers, laptops and monitors). In this segment, the price difference between the start of the month and Black Friday was just a meagre 2%. However, to look at the price difference between the middle of November and Black Friday – the difference retailers want you to see – it would appear that prices fell by around 6%. When comparing Black Friday prices to those captured at the start of the week commencing 25 November, ITMAGINATION found that just over one-third of products (35%) cost more on Black Friday, a slightly higher share (39%) cost less, and the price of the remaining one-quarter (25%) remained unchanged.

Home Entertainment and Domestic Appliances

TVs and other home-entertainment goods are typically promoted as ‘headline’ deals by many retailers and many of us typically associate these products with Black Friday. The average ‘real’ price decrease (i.e. the one observed between the start of the month and Black Friday) was around 7%. According to ITMAGINATION, it was possible to save an average of almost 550 Polish Zloty (approximately 140 USD/130 EUR) on a television set. While not to be sniffed at, many retailers would have you believe that the savings were significantly higher (i.e. by increasing their prices and then promoting price reductions based on these temporarily higher prices). Across the Home Entertainment segment (i.e. Audio and Visual), approximately one-quarter (24%) of products analyzed cost more on Black Friday than at the start of the week, slightly more than one-third (35%) were cheaper, while the price of the remaining 41% remained unchanged. However, in the home appliances (white goods, such as washers, dryers, kitchen appliances, etc.) segment, more products had their prices reduced – 41%. Just under one-third (31%) were subject to price increases and a similar amount (28%) were unchanged.

Consumer Electronics (smartphones, smartwatches, smart accessories)

With a suite of new Apple products launched in September and the launch of the Google Pixel 4 in October, you’d think smartphone junkies would be keen to splash the cash and retailers would be all too willing to entice them with great Black Friday offers. According to ITMAGINATION analysis, the smartphone segment was, in fact, one where a good deal could be found. The practice of boosting prices in early November was not detected, and, on average, prices fell by 8% between the start of Black Friday week and Black Friday. So, while the price reductions didn’t appear to be crazy, they were at least genuine price reductions.

Cosmetics goods and perfume

The analysis conducted by ITMAGINATION revealed that prices for cosmetic products and perfumes fell steadily between 12 November and 24 November (i.e. the last few days before Black Friday). However, after 24 November, prices started to increase. The data reveals that prices at specialist cosmetics good and perfumery chains (among them, leading international brands) fluctuated by around 10% in the days immediately before and after 24 November.

In the case of perfumes, price fluctuation was even more visible. Between the start of November and 9 November, prices fell by 10% on average. After this, unfortunately, they rose by around 15%. After 13 November, though, they started to fall again, and this decline continued until 16 November. After this, they then rose again. In the online stores analyzed by ITMAGINATION, this last wave of price increases amounted to around 5-7%.

Black Friday vs. Cyber Monday

After the shopping spree that was Black Friday, many retailers try to lure shoppers back for Cyber Monday (or try to reach those that weren’t lured in first time round). Analysis conducted by ITMAGINATION showed that, in most cases, prices started to bounce back up again after Black Friday. According to ITMAGINATION’s research, 41% of prices in the gaming segment bounced back up to higher than Black Friday levels on Cyber Monday. Elsewhere, it was as follows: 46% in computer products, 38% for domestic appliances and 26% for home entertainment (audio and visual). In the home entertainment and domestic appliances segments, prices remained at their Black Friday levels for 51% and 34%, respectively, of all products analyzed.

How did ITMAGINATION analyze retail prices?

ITMAGINATION conducted this analysis of retailer pricing behavior using big data and machine leaning. We used, data mining, data stream processing and segmentation algorithms to identify product categories and Natural Language Processing (NLP) to identify similarities between products. Thanks to this, we were able to create relationships between product names and to quantify differences between product names. Business Intelligence tools, such as Power BI, were used to help us visualize and analyze the trends. This solution enabled us to analyze product prices dynamically and to see how many products were discounted on Black Friday and Cyber Monday, and by how much. Importantly, it showed us that, while there were good deals to be found, in many cases, the hype generally outweighed the potential savings.

How can AI, machine learning and natural language processing help your business?

This analysis was conducted to demystify some of the hype around Black Friday and Cyber Monday. However, businesses can be – and, in some cases already are – making use of these technologies to gain competitive advantage.

Imagine if you could:

  • View and analyze pricing trends of your competitors in real time to make your pricing more competitive or to maximize sales?
  • Use historical data to tell you which days certain products will be in highest demand so that you can order higher volumes of stock and optimize pricing.
  • Harness external data factors, such as weather or events happening in the vicinity of stores that will lead to great footfall, more online visits or increased demand for certain products.
  • Ship products from warehouses or other stores to those stores that are likely to be experiencing greater demand.
  • Create staffing rosters that factor in all of the above to ensure your store – physical or online – or fulfilment center is appropriately staffed.

Now, imagine that all of these actions above can be automated, thus reducing or eliminating many of the manual tasks currently being done to manage a retail operation.

If you want to optimize your operations, maximize sales and delight your customers, talk to ITMAGINATION.

Note: The retailers that formed part of this analysis operate in Poland and operate on a nationwide level.

Learn it. Know it. Done.


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