Photo Credit: Steve Kohls
If you’re thinking about picking up some big ticket items this holiday season, do yourself a favor and keep your wallet closed.
Turns out Black Friday deals – and subsequent holiday deals – often aren’t very good deals at all.
My Own Experience
My first year out of college, I was gung ho about holiday discounts.
I was sleeping on a mattress on the floor to try and save money on a bed frame. I was taking a subway 20 blocks to a farther gym so I could save $50 a month on my gym membership. Black Friday struck me as consumer nirvana.
Imagine my disappointment when I started combing the holidays deals and found…a whole lot of meh. A thousand dollar laptop! Wait, is that actually cheap? Well how about a $600 flat screen TV? Eh.
I felt like I was having a bizarre out of body experience. There was all this hype. This was well known to be the best time to make big purchases, right? So why wasn’t I getting excited?
Perhaps you’ve trawled the aisles and had a similar feeling yourself. I was never able to put my finger on it, but it sure didn’t feel like I was getting a good deal. Now there is data to back up what our guts were telling us.
In 2012, the Wall Street Journal commissioned a study that combed two to six years’ worth of data on items in various categories to pinpoint the best time to purchase. Here’s what the data says.
Prices Start Climbing in October
For most categories, prices tended to gradually increase as the holiday season progressed, starting in October. So while you may read about studies comparing Black Friday deals favorable to other options in the past month, the truth is that every holiday season the retail industry has slowly been turning up the heat on a boiling pot of water so we wouldn’t notice.
What a brutally efficient strategy. Can anyone remember prices from October on the things they want to buy? I can’t even remember what I had for breakfast yesterday much less what the tv I’m eyeing cost in October.
But data will help us see with more clarity. Certain watches the WSJ study tracked showed their lowest prices in March. For almost every other category (televisions, shoes, hot electronics, and popular toys), the lowest pricing occurred in October.
The rule of thumb for the lowest price is generally October.
While there are some truly fantastic deals, they are often the doorbuster deals which are limited in quantity.
Best Buy guarantees as few as 10 units per store on some of their doorbuster deals. The store then stocks many items at full price so that disappointed shoppers can load something into their cart and not return home empty-handed.
Offloading Old Product
Many of the attractively priced items (when compared with the other items on offer) are discontinued lines or lower-priced lines developed specifically for the retailer. That means you are paying less for your laptop than everything else in the store for a reason.
These products can be good and they can suit your needs if you are fine with specs on a laptop that are about a year old vs new market levels of storage, memory, etc. But realize that the pricing you are getting more related to influx of clearance goods into the store than because there is a hot one-time deal due to the holidays.
You can purchase similarly priced sunsetted products throughout the year, though you may have significant selection during the holidays given most retailers practice major offloading then. And most importantly, you may see equal if not even deeper discounts post Christmas once retailers take stock of how much sunsetted product they still have left.
How To Get A Good Deal
Say you’ve still got some holiday shopping to do. You know there are some good deals in there lumped among all the bad ones.
Is there a way to ensure you’re scoring a real deal?
You can check your purchase ahead of time by using a historical pricing site for comparison. I personally like to use a site called CamelCamelCamel.
CamelCamelCamel scrapes and stores Amazon pricing data for nearly all of its products so you can see how the price has trended over time – from months to several years. Given that Amazon has a sophisticated automated system of trawling the web for competitors’ pricing and matching it immediately on their own site, you can take this as a pretty good proxy of the whole market.
The other thing to remember is to make a list of what qualities you need in your product ahead of time so you don’t get upsold by unnecessary details.
While there are some nice deals to be found this holiday season, don’t feel like you need to put on your war paint and brave the masses to snatch a good deal. Buying what you need in October is a strong ongoing strategy. For items you are interested in snatching up this season, use a price history checker like CamelCamelCamel to determine whether you’re getting a truly good deal. And if you can determine your needs ahead of time and can meet them with discontinued product lines, you can narrow your search space during the holidays or even wait until post-Christmas to snatch up better deals.
All this means that come Black Friday, you can probably keep your PJ’s on, make yourself a nice leftover turkey sandwich, and hit Netflix. There are 13 seasons of Grey’s Anatomy calling your (or is it just my?) name.