I recently traveled to Mexico City, where the retail scene was just slowing down after a busy El Buen Fin.
The 3-day shopping holiday–loosely translating to ‘the good weekend’–was launched in 2011 by the Mexican government and the Council of Business Coordination in an effort to stimulate the national economy. Retailers throughout Mexico are encouraged to offer discounts and special payment plans during this late-November retail push.
By all accounts El Buen Fin has been a success. It has become the world’s third-largest shopping event (after American Black Friday and Chinese Single’s Day). In 2015 El Buen Fin sales grew more than 10% over the previous year, to over $10B USD. This year 11 retail centers and more than 6,000 businesses, double the number from last year, participated. These included not just retailers, but also service providers like restaurants, spas, travel agents, and pet hospitals.
While El Buen Fin is inspired by Black Friday, several characteristics make the Mexican holiday unique.
It takes place over a long weekend vs. a single day like Black Friday. Typically falling just before U.S. Thanksgiving, it is pegged to Mexico’s Revolution Day.
This Mexican shopping holiday receives ongoing government backing. El Buen Fin is promoted as the “cheapest weekend of the year,” and it is supported by a dedicated website, Twitter account (#ElBuenFin2016) and Facebook page. During 2016, SHCP (Mexico’s tax collection agency) offered $27 million in cash prizes to shoppers who made purchases with a Mexican-issued credit or debit card.
While the number of participants continues to grow annually, the discounts tend to be smaller than those in the U.S. And, retailers often discount items that are not moving vs. the U.S. custom of offering hot, new merchandise.
Some Mexican retailers use El Buen Fin to preemptively capture sales from Mexican shoppers that might otherwise shop stateside during Black Friday or Cyber Monday. However, traffic flows the other way as well. Some businesses, especially those in border towns, seek to attract U.S. shoppers during the weekend–a feat made easier this year by the strong value of the dollar against the peso.
From a global perspective, El Buen Fin is one of many “discount days” now crowding the retail calendar. It joins Single’s Day, the Dubai Shopping Festival, Australia’s Boxing Day, and India’s Diwali Shopping Festival. Not to mention a litany of new contenders like Amazon Prime Day, Small Business Saturday, Green Monday, and Free Shipping Day, all driven largely by e-commerce.
These manufactured shopping days clearly play into shopper Psychology 101, combining the power of a deal with time scarcity to spur purchasing.
The rise of the “Discount Day” also provides an interesting view into the inherently social nature of the retail endeavor.
The proliferation of national shopping days comes at a time when myriad factors such as media fragmentation, waning civic engagement, and a growing economic divide–to name a few–have decreased the occurrence of truly ‘shared’ events in countries around the globe.
The strong collective interest in Discount Days reminds us that shopping remains a shared cultural event. Whether people come together around traditional shopping days or newly invented ones, in a physical or online environment, shoppers are ultimately social creatures that thrive on the ability to browse, select, and decide in the company of others. Retailers could gain insight from recognizing and furthering this dynamic when developing Discount Day programs and offerings.
The Discount Day dynamic also has implications for the future of global retail. Will these shopping days remain largely concentrated within their countries of origin? Or will they leap across political borders, as social phenomena are wont to do?
In recent years, we’ve seen the Black Friday tradition cross the Atlantic, prompted largely by Amazon’s introduction of online deals in the UK. For their part, British shoppers and brands are increasingly cashing in on Single’s Day deals. As shoppers become more aware of and open to shopping other country’s deal days, could this dynamic feed borderless trade and perhaps drive increased price transparency on a global scale?
These consequences would require retailers to do some focused analysis and soul-searching. Are discount days a profitable and sustainable long-term strategy? Or, do they merely compress demand, cannibalizing from other time periods and training consumers to buy only on deal?
The one certainty is that Discount Days continue to proliferate and thrive, making strategic calendar planning a must-have for manufacturers and retailers and lending additional dynamism to the complex global retailscape.