Given that cash is still the most preferred method of payment in South Africa, Black Friday promises to be a cash bonanza for both consumers and retailers.
While retailers have traded in a tough economy all year, Black Friday presents a much-needed chance to boost profits. Last year, South Africans spent R2.9 billion on Black Friday, which was double the takings of an ordinary trading day.
The popularity of Black Friday has surged over the past few years. A PwC consumer behaviour study published in 2018, stated 54.6% of South Africans participated in Black Friday deals in 2017, and that 66.5% intended to do so in 2018. A similar growth rate will see almost 80% of South African consumers taking to the shops on 29 November 2019.
Retailers must be prepared
“Black Friday is indeed a golden opportunity for our retailers,” says Sumay Dippenaar, spokesperson for Cash Connect, South Africa’s leading supplier of automated cash management and payment solutions. “We urge retailers to make the most of it and not to miss out through either a shortage of stock or of customer service staff on the retail floor.”
The PwC report noted that for retail outlets, stock shortages and a lack of staff – whether in a call centre or on the shop floor – are real risks before and during the Black Friday trading period. “Retailers certainly don’t want to lose out on an influx of customers because they don’t have enough stock,” says Steven Heilbron, joint CEO of Cash Connect. “We therefore encourage business owners to consider finance options, like Cash Connect Capital, that will give them a cash injection with which to invest in extra stock, and to make bulk purchases at discounted rates.”
Cash Connect Capital offers retailers reliable, short-term unsecured business finance to maximise their business potential.
Value your cash
South African retailers know that many of their customers still use cash to pay for goods. With about R135 billion circulating through the economy at any given time, South Africa remains a cash-centric consumer society.
According to the PYMNTS Global Cash Index™ South Africa Analysis, more than 50% of consumer transactions are completed with notes and coins.
11 million people are unbanked and need to access the SA economy one way or another. In a country where some 19% of the population are disenfranchised on many levels, cash goes a long way to foster equal opportunity and inclusion. Cash allows retailers and consumers alike to benefit from trading events such as Black Friday.
Trading with cash has real benefits for retailers. Chief among these is that cash transactions are far more cost effective than card payments. Surprisingly, businesses are also less likely to suffer losses from cash crime than from card fraud. Figures released by Sabric earlier in 2019, show that cash crime has a smaller impact on the economy than card fraud does.
“The risks of cash crime cannot be denied, but they can be managed very effectively,” says Dippenaar. “It is, in fact, easier to protect your business against cash crime than keeping it safe from card-related losses.”
The top tip is to be vigilant during peak-trade times when cash volumes increase significantly. Simple measures, such as not keeping large volumes of cash on your premises and varying your banking routines, can make a difference. The best defence, however, is investing in an automated and robust cash vault that can protect your cash, staff and customers, and deter and deflect any potential criminal activity.