Black Friday is approaching rapidly, and while millions of shoppers get ready for what they hope will be the sale of the year, retailers across the country are sharpening their pencils as they prepare to cut prices and attract customers. It is a wonderful day for everyone. But is Black Friday all it appears to be? asks Old Mutual.
“This year, as the retail sector continues to battle the ravages of Covid-19 on profits, Black Friday is seen as a major business opportunity. For financially hard-pressed people, it is viewed as a chance to score bargains and have a good end to the year,” says John Manyike, Head of Financial Education at Old Mutual.
“It all looks good in marketing sales brochures, but when things look too good to be true, they usually are,” he cautions, adding that it will be the savvy consumers who will be the true winners on Black Friday.
“Temptation and the belief that there will be bargains galore can be a deadly combination. The hype and excitement that accompanies Black Friday can result in many shoppers being sucked into a retail whirlwind where they are overwhelmed by options and make hasty buying decisions.”
“The result can be overspending on items that aren’t needed and a subdued festive period because the holiday budget has been blown. At its worst, trying to snare a bargain could result in buying on installment and facing 2022 with more long-term debt and pressure on the household budget.”
Buying effectively during Black Friday sales is about making the financial decisions today that will help build a stronger financial future. Although taking the step to control sale spending may seem like a small victory, it will set a pattern for later benefits.
“On the other hand, some preparation and study can make Black Friday a gala event for shoppers,” Manyike counsels. Some of the things he advises are:
- Doing some pre-sale studying by checking on the prices of items you would like to buy.
- Finding out with a bit of googling whether your favourite brands will be bringing out fresh offerings in the New Year.
- Realising that retailers will use Black Friday as an opportunity to move discontinued stock - what may appear to be a bargain will not look so sweet when a new, improved item appears on the shelves in January.
- Understanding that not all Black Friday offers will be equal. In fact, it is known for some retailers to raise prices before the event and then reduce them to previous levels for sale day.
- The number of items used to entice buyers into crowded shops could be limited and available only to those who have queued for hours.
- Knowing that buyers can be attracted into shops by a range of exceptionally low-priced goods. It’s human nature if you miss these bargains to look around and buy something else because ‘you are there’.
- Having a Black Friday budget set aside for defined items so that you do not overspend and make sure that you get home with what you planned to buy.
“With Covid-19 regulations still in place, there is no doubt that retailers will be turning to online sales to increase their revenue. Inevitably, great buys will be available for longer and dedicated browsers will have more opportunities to buy what is needed at an attractive price. The advantage for shoppers is that they will have more time to make purchasing decisions.”
“The hotter the online price war gets, the more the patient shopper will benefit,” says Manyike. Commenting that in the USA Black Friday online sales grew from $ 1.93 billion in 2013 to $ 7.4 billion in 2019. It was reported that more than 93 million people did their Black Friday weekend shopping online in 2020, and American retailers saw 30% of their annual sales recorded between Black Friday and Christmas.
Unfortunately, the convenience of shopping online comes with some risks. To make sure that you don’t become a Black Friday cybercrime victim, Manyike recommends that:
- Unsolicited emails containing a Black Friday subject line or content are deleted. Phishing scams are rife, so Black Friday messages should be treated with caution. If the message is from a recognised brand, it is better to go to the company’s website and check what is on offer.
- Shopping is done only on a secure network, and that public Wi-Fi networks are avoided.
- Malware also poses some risks. Opening an email could launch a nasty attachment that could steal your banking credentials using fake login pages. Alternatively, they could log all your keystrokes, including some of your other account credentials.
- Buyers using cards to access ATMs are warier than usual about withdrawing cash so that cards are not stolen and used later to draw money.
- Cards are retained and not handed over to assistants so that they are not skimmed. Using tap payments to authenticate purchases is a good way of staying safe.
“It also pays to remember that festive season sales will follow Black Friday sales and that after the New Year, as stocks are replenished, and new lines appear on shelves that there will be a January sale.”
“To get 2022 off to a good start, the January sales provide great budget-stretching opportunities. If you have been foresighted enough, the January low prices could be even better than those of Black Friday.”
“Buying cut-price gifts that can be used for birthdays, anniversaries and other celebrations during the year can make January a great month for making the rest of 2022 financially easier.”
“Ultimately, understanding that events like Black Friday have good and bad points is about financial education. The more you study these events, the less likely you are to make bad decisions that could last for months and even years after the event is long forgotten,“ Manyike concludes.