Can SA afford to ‘celebrate’ Black Friday in 2021?
by Jonathan Hurvitz. Black Friday needs a new narrative. What is problematic is when consumers spend money they don’t have on things they don’t need.Monday, 15 Nov 2021
by Jonathan Hurvitz. From as early as mid-October (if not earlier) phrases like, “I’m waiting to buy it on Black Friday”, start appearing in casual conversation as consumers anticipate what is touted as “the biggest shopping day of the year”. And indeed, Black Friday – a North American invention – has become a day thousands of South Africans associate with big deals and great discounts, while retailers are becoming better and better at capitalising on the frenzy of the day.
Despite consumer finances still very much affected by the ongoing impact of the COVID-19 pandemic, there’s every reason to believe that November 26, 2021, will see too many South Africans throw caution to the wind to take advantage of what we’re made to believe are unmissable deals on everything from loo paper to large televisions.
Black Friday in itself is not problematic. Of course not. What is problematic is when consumers spend money they don’t have on things they don’t necessarily need, only because it’s Black Friday and the deal is purposefully packaged to be irresistible. It’s easy to get caught up in the feverish excitement of Black Friday, but we are a nation in which unemployment is rife and the average debt-to-income ratio is at the highest level ever, according to data from DebtBusters.
This begs the question whether South Africans can afford to ‘celebrate’ Black Friday if it means spending only because it’s a good deal. While the answer is a clear no, Black Friday is unlikely to disappear anytime soon, which calls for a repositioning of the general narrative around Black Friday. Could the impact of the pandemic, combined with constrained consumer spending, be the hook for starting a conversation about alternative ways of accessing the goods and services that have for decades typically been associated with outright ownership?
Access as the new ownership
Around the world, the value once associated with ownership is shifting in favour of a model that prioritises access, as manifested in the subscription economy. Rather than purchasing things like furniture, electronics, appliances and even clothing outright, a subscription model allows for access to the product (or service) on a month-to-month basis. Instead of a large upfront payment, often on credit, subscription services allow consumers to pay as they go, and is one way to avoid getting into excessive credit arrangements on Black Friday. Brands could (should!) be embracing the growing trends around offering goods as a service. It’s a model characterised by flexibility, convenience and a keen understanding of the growing preference of consumers who simply do not want to be tied down by things.
Best of both Black Friday
The subscription economy is unlikely to overtake the preference for the outright purchase of items anytime soon, but perhaps we can start using Black Friday – it is the biggest shopping day of the year, after all – to consider offering consumers alternative ways to access the goods they need. Beyond the nice-to-haves, hundreds of South Africans also look forward to Black Friday to save on the things they really need. As brands and businesses, it’s time that we seriously look into offering more flexible ways of accessing the things they need. For the consumer, it’s simply about a solution and for brands, it should be about offering that solution, irrespective of whether that solution requires a large upfront payment or whether the solution is paid for on a monthly basis.
Embracing the subscription economy is more about a mental shift around our understanding of ownership versus access. The incorporation of a subscription model into a traditional retail one, requires an understanding of the trends, and a desire to respond to consumer preferences as the first port of call for brands. Once that is achieved, the operational model needed to support a rental offering easily follows suit. Black Friday is unlikely to disappear but, as retailers and businesses committed to contributing to sustainable growth in the country, we need to shift our thinking in terms of how we help consumers meet their needs.
Jonathan Hurvitz is the Group CEO of online retailer Teljoy and a registered Chartered Accountant in South Africa; and a columnist on Retailing Africa.
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