Business Technology

Monday 16 December 2019

Adrian Weckler: 'Here's how you're being duped by Black Friday tech 'discounts''

Black Friday shopper on Grafton Street, Dublin.
Black Friday shopper on Grafton Street, Dublin.
Adrian Weckler

Adrian Weckler

Black Friday "reductions"? Yeah, right. Once again, retailers are claiming discounts in very questionable ways. In many cases it's either on an historic price, many months ago, or on a theoretical 'RRP' price which was never actually in place in the store.

To illustrate this in the simplest terms, take a Samsung television I recommended two months ago in my weekly technology advice column. I mentioned that the 43in model RU7100 was for sale from Harvey Norman for €419.

Harvey Norman now claims its Black Friday "saving" on the telly is a whopping €230. But its actual Black Friday sale price is €399. This is a reduction on its own price of just €20.

Harvey Norman's explanation for the discrepancy is a creative one. The company admits it never actually charged €630 for the telly. But it says that €630 was the recommended retail price (RRP) advised by Samsung for that model when it was first launched.

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Thus, it claims, you're "saving" €230 against what the manufacturer said that it might sell it for aeons ago. Even though the store never did actually sell it at that €630 price.

Is this fair?

The store is technically correct in its maths. But is it reasonable to describe it as an actual "saving" of €230?

Harvey Norman is by no means alone.

The same Samsung TV is priced identically at DID Electrical, with the same claimed discount of €230. Once again, it was not priced at €629 in October at that store.

As I have written before, this is an industry problem.

This particular TV, as far as I can ascertain, was never sold for much more than €500 at any time in a mainstream Irish retailer, far below the €629 claimed.

There are semi-honourable exceptions on some sale items. Staying with the 43in Samsung RU7100 telly under the microscope, Currys offers it at the same price as Harvey Norman but only claims a discount of €80. It also provides dates at which the TV was priced at that higher level of €479 - between late June and early August. This doesn't mean the claimed €80 discount is above reproach, as you would have seen it in Currys for closer to €399 last month or in September, which common sense would decree is a negation of the claim it's "on sale for Black Friday".

But at least it's not such an exaggerated discount as some of the others.

I used to think there was some point in asking the Competition and Consumer Protection Commission about this. Surely the guardian of the consumer interest would be steadfast against such practices?

Nope. It admits that the area is beset with "loopholes". It's no big deal, the watchdog says.

And with this attitude, why on earth would retailers do anything else but exaggerate their discount?

 

Last week, the head of the fastest-growing media company in Ireland stepped down after admitting his company used a 'click farm' to artificially inflate audience figures.

Niall McGarry, whose Joe.ie and Her.ie online brands have expanded at an almost unbelievable pace, will continue to run the UK business, but will no longer manage it in Ireland.

The company says the 'click farm' audience gathering, where a publisher pays for an entity to automate online clicks on a website story, video or ad, was a one-off affair.

But the damage was done. Major advertisers started to suspend campaigns.

There is always a challenge for agencies, in particular, to keep their own major clients convinced that they know how and where to direct brands' budgets for effectiveness.

The whiff of any click farm augmentation is poison to this agency-client relationship.

Maximum Media is especially vulnerable to this chunk of advertising business.

One of its main commercial models is to launch a show with an established, high-profile journalist or celebrity and seek a large sponsorship budget. But that deal is based, in part at least, on hitting high audience targets.

Maximum Media has shown itself to have an understanding of how to use online media channels more effectively than many of its traditional media rivals.

So this is a really serious blow.

In media circles, there is deserved admiration for McGarry's investment in providing an additional outlet for journalists to work.

In what has seemed to be a one-way commercial tide toward social media platforms, his channels have appeared to buck the trend.

Many of the journalists he has hired are outstanding in the work they do.

But online metrics, even when not gamed, are problematic for many advertisers and agencies. The value of an 'autoplay' stat or a click is increasingly debated, doubted and devalued. There can be no room at all for suspicion of inflation.

McGarry did the right thing in stepping aside. The larger debate around how to make online media pay will rage on.

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