Member Article

What do hotel sites, Black Friday and Fyre Festival have in common?

By Daniel Ball - Business Development Director - Wax Digital

As reported by a slew of news outlets at the start of February 2019, The Competition and Markets Authority (CMA) is clamping down on misleading online sales tactics with websites such as Expedia, Booking.com and Hotels.com set to be in the firing line.

But what do these websites have in common with Fyre Festival and Black Friday? In this article we’ll explore the sales tactics employed by all three and identify why they’re misleading.

Pressure tactics from hotel booking sites

Pressure tactics, designed to get consumers to purchase something quickly are commonplace on hotel booking sites such as Expedia, Booking.com and Hotels.com and others. You’ve probably seen them when you’re trying to book a hotel room, a flight or something similar.

Messages such as ‘one room left at this price’ and ‘booked four times in the last 24 hours’ attempt to inject urgency into consumers, to encourage them to part with their cash quickly.

The CMA, in an investigation, identified that none of these claims were verifiable. In fact, most of the claims made on leading hotel booking websites were entirely false. As such, the CMA has stated that these high-pressure tactics could prevent customers from finding the best deals, which amounts to a breach of consumer law.

The CMA has given websites like the aforementioned until the 1st September to remove this messaging from their sites, or to face further action

Is Black Friday a myth?

Black Friday, the annual sale we’ve inherited from the US, is getting bigger and longer every year according to analyst Rebecca Lehman, in an article for Time. She says: “It used to be basically one day and maybe a weekend, and now it’s just really become the entire month of November.”

With consumers inundated with deals throughout the whole of November, has Black Friday become a bit of a damp squib? Consumer research organisation Which?, in a comprehensive article on their site seem to think so.

In fact, 87% of Black Friday deal items tracked and investigated by Which? were cheaper at other times of the year. They go on to claim that online retailers deploy numerous tactics to encourage consumers to part with their hard-earned cash. For instance, some online retailers use ‘was price’ or RRP comparisons. Which? claims offer like ‘was £100, now £50’ exaggerate the discount you’re receiving. It’s a similar thing for Recommended Retail Price (RRP).

With RRP, some online shops were using outdated RRPs to make their Black Friday deals too good to be true.

But are consumers tired of Black Friday deals? Early data from leading card provider Barclaycard seems to say so - with 2018 Black Friday figures down 12% on 2017.

Influencer marketing under the microscope Influencer marketing, the persuasion tactic leveraged by big companies and curated influencers, is coming under increased scrutiny because of events like Fyre Festival.

The disastrous 2017 event, branded as a luxury music festival, was launched with a flashy viral marketing campaign.

They collaborated with over 250 influencers, including supermodels Emily Ratajkowski, Bella Hadid, Kendall Jenner and leading YouTubers such as Marcus Butler and Nick Bateman. Fyre Festival paid the influencers up to $250,000 to simultaneously post an orange tile on Instagram in order to launch the festival.

The tactic allowed Fyre to reach 300 million people in 24 hours - and was a resounding success - they sold out the festival almost immediately.

Unfortunately, where Fyre Festival fell short was the logistics behind the festival itself. In two, now globally-renowned documentaries, the litany of failures is catalogued in excruciating detail, culminating in the festival co-owner Billy McFarland being arrested and charged with fraud, which eventually led to a sentence of six years in federal prison.

Because of what happened at Fyre Festival, the attendees not getting the luxury 5-star accommodation advertised, along with the complete lack of infrastructure for the event itself, it has put social media influencers and what they post under the microscope.

Commentators have pointed to the amount of power influencers have, with literally millions of people viewing their posts. Up until recently, influencers had not been regulated by any sort of authority and were free to post content without disclosing whether they’d been paid to produce the content by a business.

In September 2018, The Advertising Standards Agency (ASA) issued a set of guidelines for influencers, which makes it mandatory for them to clearly identify that the content they’re posting is an ad.

Is the end nigh for misleading sales tactics?

The internet has fundamentally transformed our relationship with purchasing and because this change has been so rapid, law has had a tough time keeping up.

But now, as legislators start to realise how some of these tactics might be misleading or could give a deceptive impression about a service or product, they’re under increasing pressure to regulate online sales.

And so, does this spell the end for misleading online sales tactics? Probably not. Digital transformation fosters a culture of constant innovation, and we reckon even after governments regulate on these new ways of selling, there will always be a new tactic for digital marketing professionals to take advantage of.

There’s a case to build education about these types of sales tactics into schools, so children can grow up understanding that not everything they see online is true and in their best interests.

This was posted in Bdaily's Members' News section by Alex Brown .