SUMMARY
This article talks about how retail companies are starting their Christmas sales and cash discounts early-early; mainly because of the weakened global economy, and therefore, leading to the lack of confidence among consumers.
As described by a mother from Hollywood, "The economy is so extremely out of control; even with a job it's very expensive. You have to cut back on food, clothes and everything.''
It is the lack of confidence (money-wise) among consumers that have retailers worried about the holiday season, which is certain to be one of the worst in years. The credit crisis, collapsing housing market, crashing stock market, rising unemployment and increasing food costs add up to a deadly combination.
Retailers have been trying hard to jumpstart the season by promoting early sales and deals to customers... so to help them gain back a little more confidence and start spending money again.
Wal-Mart even kicked the season into gear earlier than ever before - on Oct. 1 with 10 toys priced at $10 each, as well as other 'cheap deals'...
CHAPTER CONCEPT - CASH DISCOUNTS
So in Chapter 12, we learned that a cash discount is a reduction of the amount of a bill if payment is made on or before the discount date stated on the bill. And the purpose of a cash discount is to encourage the customer to pay promptly. In this article, businesses, in particularly the retail industry, is trying to get through the global economic slowdown by treating their consumers to early sale events and or cash discounts that will allow them to take advantage of the available discounted amount, while receiving the money on time; so it's like a win-win situation. With the economic recession period that the world is currently facing right now, It would be safe to say that it is not only the retailer industry, but many others as well, that are struggling through the hard times; yet, trying their best to think of possible ways to retain and attract customers by making them becoming more confident in their spending... regardless of all the hidden problems that may be lurking...
PERSONAL REFLECTION
After reading the article, I realized that there has really been a mood shift among consumers. There is an emerging trend towards buying what we need vs. what we want, and for most consumers, including me as well, the buzzwords this year are definitely low prices and the best value possible. No need to say more, it has some been very visible weekends that we are seeing less people going to the mall for the purpose of fun shopping; rather, just people getting their groceries and other basic needs, such as food. Another large portion of others are just there roaming around, hanging out with friends, and window shopping... Inevitably, this is going to be one of the slowest season for everyone this year.
2 comments:
A trip to the local mall is now not one of fun impulsive shopping but rather cautious shoppers making the best of their money. It is unfortunate that at this specific time in the year close to Christmas that families and individuals cannot spend very much. I appreciate what the retailers are doing by giving discounts to consumers to somewhat aid finicial distress and yet keep their own revenue up. In the meantime, all we can do is hope and resist the urge to go out and shop.
-B. Chan
Well, i have had a review of this article. What i find interesting is that the introduction of such discount schems is inevitable with the current credit crunch. Many jobs have been lost and currently the one's available are not as paying. There is less pay per the hour. I think the discount scheme is the best incentive to attract early settlement of outstanding money's. There is an inevitable risk at the moment of increase in bad debts.
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