Repeat what works (and repeat again)

The term Black Friday is currently synonymous with an enormous global shopping event, imported by large US conglomerates.

Russell Harrop
Amazon van, parked in the snow

Origins of Black Friday

ChatGPT tells me that the first usage of ‘Black Friday’ relates to the US crash of 1869, when two successful fellas tried to corner the gold market, only for the government to step in and pop it like a South Sea bubble. It’s now more common usage apparently comes from the streets of Philadelphia when hordes of American Football fans in the 1950’s flocked into the city for the Army-Navy game on the same day as the start of post-Thanksgiving sales. The subsequent chaos led to police calling it a black (Fri)day…

Fights breaking out over discounted Billy bookcases at Ikea Edmonton (England, not Canada) might be a thing of the past (possibly also because said store is now a 15k capacity nightclub) but spending on Black Friday and Cyber Monday really is a thing. Even though they are mostly Schrödinger’s Discounts (both a discount and a non-discount given that they’ve usually been available at a lower price previously), fall for them we do.

According to pdf-Photoshop-Creative-Cloud subscription behemoth Adobe who also track shopping, US sales are +8% higher than a year ago over the Thanksgiving weekend. Which is nice, though with real, actual 30% discounts (against what base, we all wonder?) in toys and electronics, retailers might be selling more, but making less profit.

Given Amazon’s now de-facto status for buying most anything online, it sees a large proportion of this consumer spend. A recent visit to a rammed-to-the rafters London appeared to have demonstrated that high street shopping isn’t going out of fashion, except for the fact that if someone’s bought your size in a shop then tough luck given how little stock they carry. Back to the sofa for online shopping. Conventional wisdom is that Amazon had a great pandemic and then a post-pandemic hangover, but if adding another $40bn in revenue over the first nine months of 2023 is a hangover then bring on the malibu and coke…

In selling more things to more people at pretty good prices, while tying them further into the company through sunk costs such as Prime, Amazon is following the maxim of recently departed Charlie Munger, right hand man to Warren Buffet:

"Repeat what works."

Must run, there’s a 50% ‘discount’ on cycling bibshorts that’s just too good to miss…

Read more from Insights.


This communication is provided for information purposes only. The information presented herein provides a general update on market conditions and is not intended and should not be construed as an offer, invitation, solicitation or recommendation to buy or sell any specific investment or participate in any investment (or other) strategy. The subject of the communication is not a regulated investment. Past performance is not an indication of future performance and the value of investments and the income derived from them may fluctuate and you may not receive back the amount you originally invest. Although this document has been prepared on the basis of information we believe to be reliable, LGT Wealth Management UK LLP gives no representation or warranty in relation to the accuracy or completeness of the information presented herein. The information presented herein does not provide sufficient information on which to make an informed investment decision. No liability is accepted whatsoever by LGT Wealth Management UK LLP, employees and associated companies for any direct or consequential loss arising from this document.

LGT Wealth Management UK LLP is authorised and regulated by the Financial Conduct Authority in the United Kingdom.

Contact us