Black Friday is an important day in the world of commerce, it is one of the few days of the year where various purchases are being made all over the world. The reason for its success is quite simple, retailers enable discounts on their products and services, incentivizing consumers to spend money left, right, and center. However, is Black Friday all it claims to be, or are consumers starting to spend less?
Black Friday is a Dark Period For Retailers
There are always two sides to a story, and the success of Black Friday is no different in that regard. In fact, the “success” of this semi-holiday is not as grand as most people envision it. For the consumer, huge discounts are always a blessing, and it incentivizes people to buy things they may or may not need, simply because of the lower price.
However, these discounts have to be paid by someone, and commonly retailers are taking a small loss on each item sold. Some of the items offered at discounted prices allow vendors to break even, or at least still make a tiny profit, but in most cases the costs far outweigh the benefits.
Success during Black Friday largely depends on which items are being put up for sale. While most consumers are looking for bargains in the luxury and electronics sections, back to school items are popular all year round. That being said, even those items are no guarantee of success in the long run.
One thing most analysts and experts seem to overlook is how the world is still in a recession to this very day. Economies have been growing slowly – assuming they did so to begin with – and purchasing power is only decreasing over time. Consumers are becoming self-conscious about their spending behavior, and although Black Friday is appealing, more and more people will decide to buy less, or nothing at all.
Additionally, there is always a large part of the consumer base who deliberately misses out on Black Friday sales to begin with. Buying items they don’t need at discounted prices is not doing anyone any favors. Such an outlook is gloomy for the retailers, but a solution might be just around the corner.
Bitcoin Allows For Discounts All Year Long
Keeping a business afloat in this day and age of high transaction costs is all but impossible unless you are part of a large brand. For small and medium-sized businesses, there are only so many aspects where overhead costs can be cut. Adopting alternative payment systems that do not require additional infrastructure to set up, are an option well worth exploring.
Bitcoin presents an interesting case in this regard, as retailers can save money on transaction costs alone. Additionally, merchants can receive the fiat currency value of Bitcoin transactions within 1-2 business days, rather than waiting 30 days for a settlements to clear. Even though Bitcoin is not adopted by mainstream consumers just yet, its power and value should not be underestimated.
What are your thoughts on this year’s Black Friday? Will you be buying more, less, or the same as previous years? Let us know in the comments below!
Partial Source: CNN Money