The term Black Friday has a varied history: Some claim it was first used in 1950’s USA to describe the high number of employees who called in sick the day after American Thanksgiving. Others say it became a popular phrase in the 1960s when the American police invoked it to describe the annual traffic chaos that the day produced.
Should this annual shopping frenzy targeting cash-strapped consumers be promoted? Or should saving over spending be encouraged? The black swan event of Covid-19 has created challenging conditions for South African retailers and shoppers alike. Many have been put under financial duress because of retrenchments, salary reductions, businesses closing and wholescale industries facing economic ruin.
Rael Demby, CEO of The South African Gold Coin Exchange & The Scoin Shop reflects that “our economy requires stimulation and regrowth especially after a year plagued by the pandemic and the effects of restrictions. Black Friday is an opportunity for anyone in the business of selling and is a precursor to the festive season in general. However, spending has to be balanced with saving. We can’t ignore that many people are battling. An important lesson from 2020 is that having a nest-egg of Krugerrands has been a life-line for savvy savers, and reinforces the necessity of saving.”
As a nation, we have an extremely poor savings culture, especially when compared to Asian Tigers like Taiwan, Singapore and South Korea. This year many South Africans have had to dip into whatever savings they had to cover their basic expenses, and a high debt-to-savings ratio is a further burden. Demby adds “We can’t ignore that many people are battling. From paying school fees to making bond payments”.
Iron-clad willpower is required to withstand all the hype and perceived bargains to be had during relentless Black Friday promotions. It takes a tough consumer to resist all the shiny discounted gadgets and instead focus on the critical imperative of saving. Achieving financial security is a marathon, not a sprint, and one way to generate incremental savings over a period of time is to invest in gold coins and collectables.
Demby adds “ It is encouraging to see continued, strong interest in gold bullion and numismatics. This demonstrates a desire to save and invest. People are buying gold and silver not only as a saving strategy but also as a hedge against elevated risk in the financial markets. Buyers of physical precious metals are motivated by the fact that gold and silver offer a safe store of value, are a currency hedge, combat inflationary concerns and are moveable.”