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Black Friday: False advertising to escalate as millions flock online

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 27 Nov 2020

Shoppers are warned of Black Friday online marketing gimmicks and unethical practices, with some online retailers expected to pull out all the stops in an effort to recover lost 2020 revenue as a result of the COVID-19 crisis.

With more South Africans expected to shop online than ever before this year, industry pundits warn shoppers not to fall for the endless deceptive and false advertising online practices that some e-commerce sites will pull in order to take advantage of discount-obsessed shoppers.

This year, retailers ran earlier-than-usual promotions during the biggest shopping period of the year to try and make up for lost revenue during the initial stages of lockdown, where e-commerce activities were partially banned by government, drawing strong criticism from the local e-commerce sector.

While consumer sentiment and spending patterns continue to reflect the economic downturn due to the effects of the COVID-19 crisis, local online retailers and payment platforms told ITWeb they are expecting a bumper sales season over the Black Friday and Cyber Monday period this year, as many shoppers avoid malls due to COVID-19 fears.

While Black Friday generally offers amazing online deals and value for consumers, Dries Cronje, CEO of artificial intelligence (AI) consulting company Deep Learning Café, believes the much-anticipated day can also bring up ethical concerns around deals and discounts that raise red flags.

In some instances, retailers take advantage of AI tools such as algorithms to optimise sales, identify consumers’ shopping habits and even push fake online adverts to offer non-existing discounts to the targeted consumer, he adds.

“With Black Friday predominantly moving to the online channel this year, it’s vital that companies introducing AI to their business remain fair, accountable and transparent.

“One stunt I observed last year was price inflation in the weeks leading up to Black Friday, so that the subsequent discounts on the actual day appear to be more appealing than the previous price. In other instances, fake deals are advertised to lure the shoppers onto the site, and once they have to pay for the items, they realise the ‘discount’ has been automatically deactivated and the normal price applies,” explains Cronje.

Other unscrupulous marketing practices include sites discretely running the specials during a one-hour or two-hour discount period only, and when shoppers try to make the purchase outside of this period, the normal price suddenly kicks in.

“In other instances, where e-commerce sites have access to a consumer’s credit score, they can easily exploit their data and offer endless credit products on the consumer’s favourite items,” adds Cronje.

Where a credit purchase is made, consumers may find that, while the actual deal is genuine, the interest rate payable over 12 months or more could be significantly inflated to cover the discounted funds on the purchased item.

“Consumers can spot fake discounts and inflated prices by being observant of the normal price in the weeks leading up to the Black Friday period and being vigilant of the funds requested at the payment terminal,” asserts Cronje.

“They must not just take everything at face value – they need to really start asking questions and do their research – if it’s too good to be true, it probably is.”

Last year, Takealot took flak over Black Friday deals, when customers took to social media to slam the local online retailer over its Black Friday discounts. Many cried foul that they did not get any of the significant deals they had expected from the e-commerce company.

SA’s e-commerce uptick trend is forecast to be on a permanent rise, with online shopping sites gaining new users every day. A Mastercard study on consumer spending has revealed 68% of South African consumers are shopping more online since the onset of the COVID-19 pandemic.

Dries Cronje, CEO of Deep Learning Café.
Dries Cronje, CEO of Deep Learning Café.

Rise of ethical consumerism

Matthew Leighton, creative director at e-commerce site OneDayOnly.co.za, says with ethical consumerism currently on the rise globally, scrupulous and unreliable e-tailers will have a greater price to pay in the long run.

“Customers expect genuinely good deals on Black Friday, and the onus (ethically) is on the retailers to provide such.

“The reality is that unethical practice is not a winning business formula in the long run. Now more than ever, consumers are savvy and can spot a good deal – and a bad deal – for what it is. E-tailers need to work to establish trust and credibility with their customers, and this can only come from committing to the business model. If you intend showing products on discount, those discounts have to be accurate,” he explains.

To avoid falling for fake discounts, Leighton points out that a little research can go a long way: “Searching the average product price online will give consumers a very quick idea of what the retail price of any product should be – and this allows them to determine if the deal purported is good, or if the price has been hyper-inflated.”

The focus of any offered deal should be on the saving offered to the customer, not the resultant profit from the sale, adds Leighton.

Mike Farquharson, MD of online courier aggregator Rush, is of the view that in today’s digital age, unethical businesses will risk being called out and exposed in the public domain on social media.

“More competition between more online stores must benefit the consumer. It also means that unethical businesses will risk being called out and exposed in the public domain on social media,” notes Farquharson.

“These days, reputational damage to a brand, whether justified or not, can be enormous and can cripple a business in no time. So the risk associated with unethical practices, poor service or false advertising should be a huge deterrent. It is far easier for a negative sentiment of a brand to go viral than it is to build a great reputation, which takes years of hard work.”

He advises consumers to shop around, make informed decisions and compare prices before they make a purchase.

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