Johannesburg - The eagerly-awaited one-day shopping affair in the world is right around the corner and in South Africa, consumer spending on Black Friday continues to increase year on year, with sales volumes having tipped the scale at over R2.5 billion in 2021.
Despite 2022 being one of SA consumers’ toughest years yet, experts predict that South Africans will turn to credit to support increased spending over this period.
This increase in spending could be seen as a way to make up for what they haven’t been able to purchase during the year.
But consumers need to think “beyond Black Friday” and manage their credit smartly to avoid falling into a debt trap in the run-up to the busy festive season.
This is the perspective of Tonia Pavlou, Deputy CFO of consumer finance firm, RCS, who advises South Africans to not think of Black Friday as the day to make up for the lost time when it comes to spending.
Instead, Black Friday should be thought of as a chance to take stock and make a financial plan that will allow you to see the end of the year through without incurring unnecessary debt.
According to the South African Reserve Bank, the most recent household debt-to-income ratio in South Africa stands at 75.1%. The added pressures that the pandemic years placed on consumer pockets, compounded by the reverberant effects of an unstable geopolitical climate mean that for most South Africans, over-spending on Black Friday is not a wise option.
“We urge South Africans to practise purchasing and responsible borrowing as a component of personal financial wellness. On the whole, South Africans need to become more aware of how the financial decisions they make today, will impact them in the months and years to come,” says Pavlou.
Buyers are advised not to budge on their budget, think outside the “Black Friday box”, cash in on loyalty programmes and do the math.
Providing her top tips for credit users over the Black Friday period, Pavlou asserts that impulse buys are the number one culprit behind overspending on Black Friday. But “planning ahead can help you avoid falling prey to the frenzy,” she says.
In previous years, Black Friday was dominated by more “traditional” retailers on items such as clothing, electronics and home appliances. But over the years, all kinds of retailers and service providers have jumped on the bandwagon by finding innovative ways to get in on the action.
In the run-up to Black Friday, many retailers use loyalty or cashback programmes to incentivise shoppers and build their databases before the festive rush. Some of these strategies include offering newsletter subscribers early access to deals or offering first-time newsletter subscribers exclusive discounts on their Black Friday shop.
Resisting the urge for immediate gratification is essential to steering clear of over-spending, and as Pavlou suggests, there is a highly practical way of doing this.
The Star