Black Friday: hope for retailers and economy, red light for the indebted and the environment

Retailers are expecting an increase of about R7bn in consumer spending on Black Friday 2023 compared with last year, according to data from the Bureau of Market Research (BMR).

The total is expected to be an additional retail turnover of R26.6bn, with many retailers offering bargains on a wide range of products throughout November. This is a much-needed boost for the economy.

“While overall consumer sentiment is weak, consumers’ predisposition to purchase goods on sale, combined with retailers going all-out to generate sales during Black November, has resulted in a positive outlook for retail income this month. This is likely to be reflected in retail sales and private sector credit data for November. It could also provide a boost to GDP growth momentum during the final quarter of the year,” PwC South Africa senior economist Christie Viljoen said.

The National Credit Regulator (NCR) and the office of the Credit Ombud are, however, cautioning consumers to spend only on must-have items and with cash in hand.

“The economic circumstances of most South African households are already strained as inflation bites into pockets and the repo rate hikes make expenses heftier. Fuel prices and medical inflation are on the rise, adding additional financial pressure on financially–stressed households,” they said.

“Be credit savvy in the run-up to Black Friday/Cyber Monday — check your credit profiles, understand your spending limitations and prepare to walk away from an unnecessary deal.”

Poppy Kweyama from the NCR advised against buying on credit.

“Unnecessary use of credit is not only expensive but can lead to over-indebtedness. You are not saving on a deal when you buy on credit. If you consider the interest and fees on the credit, you end up paying more. Misuse of credit exposes you to the risk of becoming overindebted and defaulting on debt repayments, when you are unable to pay back the debt because you were too hasty to snap up the deal rather than consider your affordability,” she said.

Psychologist Zipho Mhlongo, who practises at Netcare Akeso Nelspruit, also advised caution due to the cost of living crisis, recommending consumers remember they need to budget for the festive season to prevent beginning the new year with “Janu-worry”.

An important starting point is understanding the difference between the things you want and the things you need.

“It is not wise to purchase a luxury vehicle when you cannot afford rent. It is not wise to buy expensive clothing brands when you cannot afford school fees. It is important to assess your budget objectively,” said Mhlongo

“The impulsivity associated with the holiday period and parents wanting to reward children for their hard work during the school year can threaten the family’s ability to cope financially when the new year starts.

“Have age-appropriate discussions to teach children about being careful with money and cultivate sentiment rather than materialism in children. Children should be raised to realise happiness and fulfilment do not necessarily come through acquiring possessions.”

Budget bargains

Consumers are taking this advice into account, according to the research by the BMR for Capital Connect.

The report expects luxuries to be out for cash-strapped consumers, who instead will seek bargains on food staples, household essentials, clothing and hardware for home repairs and maintenance.

Most consumers are also holding off replacing large appliances as long as possible, though sales of small domestic appliances may get a small uplift.

This ties in with research by Pick n Pay, which found a growing emphasis on grocery deals this year as well as products addressing load-shedding.

Shoppers must be on alert for cyberscammers

With 15% of sales being online last year, a significant proportion of this year’s spending will again be online. For consumers in South Africa this poses many risks related to cybersecurity and electronic crime.

PwC South Africa cybersecurity leader Hamil Bhjoora said: “Shoppers should exercise caution in online buying. The risks — including counterfeit websites, social engineering attacks, payment fraud and identity theft — make them vulnerable to unscrupulous characters.

“To mitigate these risks, shoppers can take precautions such as verifying website legitimacy and security before making a purchase, using secure payment methods and avoiding using public Wi-Fi for transactions, checking reviews about sellers and keeping their preferred devices updated with the latest secure software.”

PwC warned shoppers to be aware of:

• phishing e-mails — cybercriminals impersonate legitimate e-commerce sites to trick users into revealing sensitive information;
• counterfeit websites — criminals create fake online shopping websites that mimic legitimate ones to steal personal and financial information. It could also result in non-delivery of purchased items or the sale of counterfeit goods;
• social engineering attacks — criminals use manipulative techniques such as psychological manipulation or trickery to deceive others and gain access to confidential information or systems. This is done through methods such as phishing, spear phishing, smishing, vishing and so on;
• data breaches — breaches to e-commerce platforms that expose personal consumer data. Criminals are also able to install additional malware that provides them with long-term access to these platforms;
• ransomware attacks — cyberattackers deploy ransomware to encrypt user data and demand payment for its release;
• payment fraud — cybercriminals intercept and use credit card details during online transactions or perform unauthorised digital purchases using stolen payment details;
• identity theft — cybercriminals are able to gain unauthorised access to user credentials, leading to theft or misuse of personal information; and
• unsecured Wi-Fi networks — scammers are able to access the data transmitted between a consumer and e-commerce platform.

The NCR and Credit Ombud shared these tips for shoppers:

• do your research: once you know what you want to buy, compare with different shops to get the best deals. It may sound tedious but it can save you money;
• create a budget and stick to it: budgeting always helps to control your spending;
• avoid impulse buying: list items you intend to buy and do not buy something you don’t need or planned for;
• beware of costs and risks associated with online shopping: normally, online shopping requires credit/debit card details which may not only carry additional costs but may expose you to the risk of cybercrime;
• do not spend more than you can afford: irresponsible use of credit may lead to excessive debt and blacklisting at credit bureaus which will damage your credit profile;
• if you are prone to impulse buying or ill-disciplined, stay at home, do not visit shopping malls and stay offline;
• if it sounds too good to be true, it probably is: some deals may pop up as you are online doing your shopping and you may receive e-mails that offer special deals on items you may be searching for online. As much as we want to save, we do not want to find ourselves becoming victims of fraud;
• read the terms and conditions: always look at the return policies for your purchases, including on different websites. Do not just click on “I have read and understood the terms and conditions”;
• if shopping online, check the contact details on the site to ensure they are valid. If there is an e-mail address, check that this is not a personal e-mail address; and
• remember cash is king. If you haven’t planned for Black Friday or Cyber Monday purchases stay at home and offline.

The dark side of Black Friday: The environmental toll of e-waste

Old appliances and other electrical items replaced with Black Friday and Cyber Monday deal purchases can pose a threat to the environment if they are not discarded properly, warns NPO Circular Energy.

Anything that depends on an electrical current or products with a plug, cable or battery can — and should — be recycled when no longer used. These items contain hazardous materials harmful to the environment when they end up in landfills or elsewhere.

Research shows South Africans are eager to be rewarded for their unwanted electronic items. “Rewards of this nature are, however, not sustainable and does not create awareness of the severity of the harm improperly disposed of electronic items can have on environmental health,” Circular Energy said.

“Entrepreneurial-minded individuals are also profiting from South Africans wanting to make a few rand from unwanted appliances; buying unwanted electronic items, stripping them for parts and dumping them in general waste landfills. In most cases both parties are unaware of the environmental damage caused by the improper disposal of electronic items once they have been stripped for parts.

“With Black Friday specials — and a resulting increase in e-waste — looming, Circular Energy appeals to South Africans to see their unwanted electronic items not as a source of potential income, but to recognise it as a potential threat to the health of their children’s children.”

A free nationwide collection service of unwanted electric and electronic items is available to South Africans and can be accessed here year-round.

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