The two sides of Black Friday
2020 will go down in history as the ‘push me-pull you’ year with broad well-being of the economy at loggerheads with the well-being of its people.
On-off and stop-go, many UK businesses such as pubs, sports institutions, hairdressers and beauty salons as well as consumers have been confused, frustrated and intimidated by this up and down rollercoaster ride. A situation magnified by a Prime Minister torn between the radical ‘open-up’ philosophy of some rebellious Tory MPs and the ‘lock-down to save lives’ scientific consensus.
A two faced animal!
For those who take Black Friday seriously it will also be a very unusual two-faced animal this year.
- Unusual? People consuming in exile; with no queues, no crowds, no physical contact at all, just a few clicks on the computer for your spending fix! The Covid-19 lockdown means businesses have evolved in an enormous structural shift which now makes it easier to shop, purchase and get your items delivered to your door.
- Two faced? There is an upside and a downside to Black Friday – indeed with all consumer decisions – under the shadow of Covid-19 and our new economic reality.
Online retail’s success was gained at the cost of serious hardship for bricks and mortar outlets. Also given past experience, consumers – with already eye watering private debt and the threat poor job security – may be ripped off by spending on apparently normal everyday rather than reduced prices.
Apart from personal or micro level issues – you might actually need that new washing machine – our wanton lust for goods and services, or over consumption as economists call it, is destroying the environment we live in. In this period of pain, suffering and death should we be spending so frivolously?
Pouring more expenditure onto the fire of record levels of personal debt for goods we don’t really need seems crazy, if you have increased personal job risk from Brexit and have been severely impacted by the Covid-19 slump then ‘spend spend spend’ is not for you.
Upside: It’s the economy stupid…
So, is not buying the answer? No, simply stated if we don’t buy things then the economy dives, markets collapse which pushes people out of work – the Chancellor quoted that due to Covid-19 we are likely to see an additional one million unemployed next year.
If we don’t engage with events like Black Friday then many more people will lose jobs and as we have seen major companies and many small firms face ruin while others – say national supermarket retailers or online outlets – benefit at their expense.
The intelligent economics based voter!
In the round, every economic transaction can be thought of as a vote – a vote for a product or brand, a vote for jobs a vote for the environment or a vote for your financial ruin! Those who can afford it should perhaps go ahead and enjoy the spending spree, and if you want certain products or brands to continue then vote with your wallet! It’s worth following the guidelines set out by Which.
You could also consider buying locally if at all viable – many supported the food and drink sector, perhaps delay consumption to help later after the vaccine role-out when there is more economic certainty.
Think before you buy anything…
1. Can you really afford it – is it something necessary?
2. Consider the length of time you will use it, given the price and perhaps negative impact it may make.
3. On the flip side – is this an important brand, shop, product, niche area you think needs desperate support given lockdown/Tier restrictions. It will likely only survive if people like you continue to support it.
4. Consider products/services environmentally beneficial for the future, solar panels, electric cars, more energy efficient white goods/electronics. They could save you money in the long run!
In this two-faced world try to make the best-informed decisions – for our jobs, for our future every economic purchase or vote counts.
This Blog post was written by Dr Jon Seaton, who is a Reader in Business Economics and part of the Economics academic group at Loughborough University School of Business and Economics.
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