Latest / Financial Survival Network / Buy Now -- Pay Never, What Could Go Wrong -- Carl Gould #5960

Transcript

Buy Now -- Pay Never, What Could Go Wrong -- Carl Gould #5960 · Financial Survival Network

• 0:00
  Well, we're seeing people spend equal as much. Now, Remember people have
• 0:04
  less disposable income than they did last year, So on average, the average
• 0:07
  family has five to seven thousand dollars less as a family to spend than they
• 0:12
  did last year. So here's where That's why we're seeing credit card debt go
• 0:16
  up, and that's why buy now, pay later is going to be a
• 0:22
  strong trend for this holiday season. You're listening to Carrie Lutz's Financial Survival Network
• 0:28
  where you get valuable information. You just can't find anywhere else to thrive in
• 0:33
  today's trying times. You need the Financial Survival Network now more than ever.
• 0:39
  Go to Financial Survivalnetwork dot com and get your free newsletter and gift. Financial
• 0:45
  Survival Network now more than ever, and welcome. You are listening to the
• 0:54
  Financial Survival Network. I'm your host, Carrie Lutz. Well, it's a
• 0:58
  tough Christmas season in looks like the country is heading into a potential recession,
• 1:03
  could be a deep one. Got a lot of problems out there in the
• 1:07
  horizon. What are we going to do? Uh? Well, the buy
• 1:12
  now, the buy now, pay later plan is back in vogue. Everybody
• 1:18
  seems to be offering it. Carl Gould is with us Now, Carl,
• 1:22
  it's great to have you back on the show. He you've got a question
• 1:23
  for Carl and myself. Kl at Kerrie LEDs dot com is the email address,
• 1:30
  and Carl, you are president business management firm Seven Stage Advisors. So
• 1:38
  buy now, pay now for some people, it's buy now, payever,
• 1:42
  right, it could be Look, it's you know, with all that's going
• 1:47
  on right now, companies have to get more creative as to how to bring
• 1:49
  in a customer. It's the most expensive thing that they do when it comes
• 1:55
  to fulfilling. You know, their services and products to their customers is getting
• 1:59
  them in the first place. And so and it's eight times more expensive to
• 2:04
  get a new customer than keep an existing one. So they've got to get
• 2:07
  creative. So they say, all right, well you come and buy now,
• 2:09
  pay later. It's almost like an in house finance program. And it's
• 2:14
  a way to attract more customers and get more foot traffic into their locations.
• 2:20
  Well, you know they've got this zero percent financing. They've got you know,
• 2:23
  make no payments until January twenty twenty five, like at furniture stores.
• 2:31
  You know, is this going to make any difference? The people take advantage
• 2:37
  of it. Oh, it will, it will because we you know,
• 2:39
  we very much appreciate the impulse buy. We will. We will spend money
• 2:45
  on things that we that we see or if we run out of budget,
• 2:50
  but there's still something really important to us that we want to get, especially
• 2:53
  during the holiday season, We're going to make that purchase. So it's genestly
• 2:57
  people put more on their credit cards. This is another form of that.
• 3:00
  So yeah, you'll you'll see an uptick in purchases as a result. Just
• 3:04
  need to be careful. Mm hmmm. Hey, well, one nice thing
• 3:07
  is when you do the buy buy now, pay later plan doesn't go on
• 3:12
  your credit report, does it generally, right? So that is one of
• 3:15
  those nice things. Now, yeah, you want to check the fine print
• 3:20
  to make sure that it doesn't because a larger store that already has its own
• 3:25
  credit department, like a home depot like L's, like a Macy's. In
• 3:31
  the fine print, it could say that if you miss a payment, it
• 3:35
  goes on your credit report. So you do want to be careful about that
• 3:38
  because if you're going to buy one hundred dollars item and you do buy now,
• 3:40
  pay later, you think you're going to spend one hundred dollars. But
• 3:44
  maybe there's an admin fee to get onto the program, maybe there's interest,
• 3:47
  maybe there's a convenience fee. Maybe there's a penalty if you don't pay on
• 3:53
  time. These are the sorts of things that you want to make sure are
• 3:58
  not part of the program, or you least know about them before you get
• 4:01
  into them, right, So, I guess some people will take advantage of
• 4:06
  it. Huh. What other innovative ways to bring customers into the stores of
• 4:11
  the websites are you seeing now? Well, they're doing a lot of bundling.
• 4:15
  You know, when times are tough, it's hard to just charge a
• 4:18
  retail price for something. So what they might do is they might put a
• 4:21
  bundle together. Instead of buying that T shirt in that hat, they'll put
• 4:26
  the two together, They'll put a they'll put a band around it, and
• 4:29
  they'll and they'll say, hey, two for twenty instead of buying them separately
• 4:32
  it would be thirty. They're also using clearance racks. If you noticed,
• 4:38
  did you notice Black Friday started right after Halloween? It didn't start on after
• 4:46
  the damn Thanksgiving. It started then it went all the way through the weekend.
• 4:50
  It's still going on. Yeah, Black friend is a month long now,
• 4:55
  yeah, exactly, Friday is a state of mind. I think it.
• 4:58
  Well, you're right, because it's no longer a day. So even
• 5:01
  Black Friday even starts on Thanksgiving in some places. So people are you know,
• 5:08
  companies are using a lot of promotions, they're using a lot of discounts,
• 5:12
  They're using a lot of very clever tactics to make it appealing. So
• 5:16
  you think you're getting a good deal and you and you patronize their particular store.
• 5:21
  Amazon is giving free delivery. There's a lot of different hooks to get
• 5:26
  somebody to start buying. Hey, so it looked like there were less riots
• 5:30
  this Black Friday too, Maybe spreading it out as a good thing, you
• 5:35
  know, it could be, you could be. It's hard. It's hard
• 5:38
  to know if that's the case. But what we have definitely seen is retailers
• 5:42
  are upping their security and more importantly, their security presence. So someone's less
• 5:47
  likely to, you know, to grab and run if they see security right
• 5:53
  at the door. You know, the stores that were getting hit, you
• 5:57
  know, look, no one deserves to be robbed, but the store is
• 6:00
  that we're getting hit. Were the ones that not only were vulnerable, but
• 6:02
  they looked vulnerable. They looked as though they didn't have a security presence,
• 6:06
  and so that emboldens somebody who's going to try to snatch stuff from your store.
• 6:12
  Yeah, well you know they would like be fighting each other off for
• 6:16
  toaster ovens and stuff. Then remember that guy in Long Island got trampled to
• 6:21
  death, like takes to go and it's just was out of control. So
• 6:28
  if you could spread it out and keep them away from the stores, maybe
• 6:30
  that's not such a bad thing, right right, Well, look, the
• 6:34
  retail is going to continue to be under pressure. It's it's changing. The
• 6:40
  retail world has changed since the Amazon effect really accelerated during the pandemic, so
• 6:46
  that really did change things. Retail still has its place and people still do
• 6:53
  like to come out and look and touch things and consult this with the sales
• 6:57
  reps so they make sure that they're buying the right thing. There's still a
• 7:00
  place for that and there always will be. But the retail shops have to
• 7:03
  create a compelling experience in order for people to come back. Okay, so
• 7:08
  an interesting item that popped up here, I just want to run it by
• 7:11
  you. In Europe, Amazon was hit by multiple strikes because they're not it's
• 7:18
  mainly working conditions. You know, they do some things over there that might
• 7:25
  be acceptable here but are not acceptable in Europe, and they're kind of like,
• 7:30
  I mean, look, two thousand workers struck across six Amazon fulfillment centers
• 7:38
  in Germany. You know, what are they doing wrong here? KORL.
• 7:43
  Well, you do need to know your audience, and you do need to
• 7:46
  know what is acceptable, you know, labor practices in each of these states
• 7:50
  now in these countries. Now, you know, Amazon is a very is
• 7:58
  a company that has a lot of accountability in its workplace, and not everybody
• 8:03
  likes that. And you know, they are very data driven and they're very
• 8:07
  accountability driven, and you know, you're you're going to have that issue.
• 8:11
  I don't know that they're doing anything wrong, but how you institute things like
• 8:15
  that sometimes is the difference. And they just need to make sure that they're
• 8:18
  communicating the expectations properly and you know, and enforcing what they say and not
• 8:24
  enforcing what they don't say. Yeah, yeah, well they're still popular though,
• 8:30
  sure, sure, amazing amazing company. You know, I wonder what
• 8:33
  modern life would be like without them sometimes, you know, Yeah, I
• 8:39
  just do it sometimes just because I'm lazy, I don't want to go to
• 8:43
  the store. It's not so much I don't want to go to the store,
• 8:45
  but I know that a certain product I'm looking for I have difficulty finding
• 8:50
  at the local supermarket. That's the point right there, Kerry. Amazon has
• 8:54
  engendered trust that if they say they have it, they have it, and
• 8:58
  you can't always rely on your local store or to have what they have historically
• 9:01
  had on the shelves. And Amazon makes it super easy to find out.
• 9:05
  You go right on the site, you do a search, they have it,
• 9:07
  they don't have it. They tell you when you're going to get it,
• 9:09
  and they just manage your expectations, I think, as much as anything
• 9:13
  else, that's what they're good at. You know, if I told you
• 9:16
  something that you really wanted was going to come in three days instead of two,
• 9:18
  I don't think you would care, but you would want to just you
• 9:22
  just want to know is it there or not? Right? Am I buying
• 9:24
  the thing that I'm am I getting the thing that I think that I'm buying.
• 9:28
  So if I were, if I need a gift and last year they
• 9:31
  had it at that store, but I'm not really sure, and Amazon,
• 9:35
  I know, has it. You know, do I want to invest an
• 9:37
  hour of my life to go find out when I could do it at the
• 9:41
  click of a button and if the prices are reasonably close, Amazon's going to
• 9:43
  win. Yeah, so true. I mean, hey, something like Terryoki
• 9:48
  sauce. I can never find it where I think it should be in the
• 9:52
  supermarket. So I just gave up and I said, you know, I'll
• 9:56
  just order it from Amazon. They'll have it to me in two days,
• 10:00
  need it right this minute. And that's what I've taken it doing with a
• 10:03
  whole host of items that I just trun't be bothered going out to the to
• 10:07
  the local stores for it. You know, if I buy it from Amazon
• 10:11
  or I buy it from the cvs, who cares, right right, Yeah,
• 10:16
  exactly exactly. And that's and that's where you know, Amazon has always
• 10:20
  wanted to be a customer centric person company, and they wanted to be one
• 10:24
  of the most customer centric businesses on the planet. And that's they've placed their
• 10:28
  focus there. And it's it's clear that they have. You know, Target
• 10:31
  has done a really good job and Walmart, for that matter, where the
• 10:35
  same day pick up and curbside pickup. Again, that's been a very very
• 10:41
  customer centric move. Target and Walmart are doing actually have the advantage over Amazon
• 10:46
  because they have stores in your local market, whereas Amazon does it. So
• 10:52
  Target and Walmart actually have an advantage there over Amazon. And that's something that's
• 10:56
  very valuable to people. They say, I need to so on my way
• 11:01
  home from work, I'm happy to just stop by and pick it up if
• 11:03
  you could just have it ready and we can do a curbside delivery. That
• 11:07
  has proven to be a tremendous value added service for customers, and they really
• 11:13
  like it is curbside delivery. I had them delivery a package to me Walmart
• 11:18
  in like it was like in less than a day, like two hours after
• 11:22
  I it was dropped off at my door. It was amazing, you know,
• 11:26
  and Mazon had never done that before. So I think I got to
• 11:31
  look more closely at Walmart, you know, right right, well, the
• 11:37
  convenience now you can look on the website, you can look on the app,
• 11:41
  you could see if they have it, and you know, they're all
• 11:45
  three of these companies were talking about. Their logistics are so sophisticated that if
• 11:48
  they say they've got it, you could trust that they have it and they'll
• 11:52
  get it to you. Yeah, it's pretty it's pretty cool. Definitely pretty
• 11:56
  amazing. So what other trends we're seeing here for Chris miss in terms of
• 12:01
  what people are buying, how much they're spending, anything that's raising alarms with
• 12:05
  you. Well, we're seeing people spend equal as much. Now, remember,
• 12:11
  people have less disposable income than they did last year. So on average,
• 12:13
  the average family has five to seven thousand dollars less as a family to
• 12:18
  spend than they did last year. So here's where that's why we're seeing credit
• 12:22
  card debt go up, and that's why buy now, pay later is going
• 12:26
  to be a strong trend for this holiday season. You know, it's funny
• 12:33
  because when we were kids growing up, buy now, pay later, that
• 12:37
  was like, you know a lot of people did it. It was like
• 12:41
  the Christmas Club, right, yep, that's right, Yeah, no doubt
• 12:46
  these so people they're reviving some of these older products and services, but just
• 12:52
  under a new knee. So every old is new again, right, exactly.
• 12:56
  It's not vegan, it's plant based. You know, you're not on
• 13:01
  a diet. You have a meal playing, right, you're not. It's
• 13:03
  not in house financing. It's buy now, pay later, right, all
• 13:07
  right, But it all amounts to the same thing as the same idea,
• 13:11
  you're going to buy more than you can afford, right in some cases,
• 13:13
  yes, in some cases, Look, if you managed the if you manage
• 13:16
  the program properly, you'll be fine. But you just want to be aware
• 13:22
  of what the fine print is for one of these programs so you're not caught
• 13:26
  off guard, right, Yes, OHI it's the devil is in the details,
• 13:31
  right, Yeah, sure is it? Sure is you you know,
• 13:35
  because you're If you manage the program right and you set up your payments and
• 13:41
  make sure you're not getting hit with fees and interest, then this program could
• 13:45
  work really well. But if you're playing if you're using the program to play
• 13:48
  catch up. You know, some people either are getting a bonus at the
• 13:52
  end of the year or they know they're getting a tax refund, and they
• 13:54
  say, you know what, I'm going to pay this off when I get
• 13:56
  my bonus or I get my tax refund, and they've already planned that out,
• 13:58
  so I'll take advantage of the buy now, pay later, And that's
• 14:01
  cool. That works fine. But if you're saying I have no idea,
• 14:05
  how I want to pay this and I really want to get this gift,
• 14:07
  and your payment schedule extends, that's when it's going to be a little bit
• 14:11
  more painful. I just find it fascinating that, you know, the creativity,
• 14:18
  the brain power that goes into these companies to get you to buy more,
• 14:24
  and it's it's all scientific, you know. It's like things that they
• 14:28
  do in the casino to get you to gamble, like getting rid of the
• 14:30
  clock correct, all those things are all geared at how do you make people
• 14:37
  spend more money than they plan to write? Yeah, it's true. Look,
• 14:41
  it's the hardest thing to do in business. Marketing and sales is the
• 14:45
  hardest thing to do in business, and so that's why so much time and
• 14:48
  effort and energy is placed on it. Because it's expensive, it's hard,
• 14:52
  it's ever changing, it's ever evolving, and you need to stay. If
• 14:58
  you miss a you know, consumer purchasing trend, it could be catastrophic for
• 15:03
  your business. I mean, these companies make up to forty percent of their
• 15:07
  revenue in the holiday season. They can't afford to have this miss right forty
• 15:13
  percent. How did they become so dependent on one season? Really, literally
• 15:18
  let's call it two months, but really it's like forty five days. Isn't
• 15:22
  that a mistake? Well? I think it's just you just have three major
• 15:28
  holidays within sixty days of each other. You have Halloween, which does billions
• 15:33
  and billions in circles, believe, Yeah, Thanksgiving and Christmas. If you
• 15:39
  think about it, it's within just under sixty days. Those three holidays.
• 15:43
  They are the biggest consumer holidays. There are other big ones Mother's Day and
• 15:48
  Easter and New Year's right, but nothing compares to those three. Those are
• 15:52
  the big three. They're within sixty days of each other, and we have
• 15:54
  built our social, family and business calendars are on those those three holidays.
• 16:02
  So it's not a tremendous surprise that they have become as big as they habit.
• 16:07
  But you know, like I always, you know, would like to
• 16:11
  buy things off season, like Christmas decorations, buy this sure the day after
• 16:17
  Christmas? Right, and you know, breeding cards, things like that,
• 16:22
  things you can buy. So with a little strategic planning, a consumer really
• 16:26
  can save way more than they would save on Black Friday or any other designated
• 16:33
  sales holiday just by buying off season. Yep, that's right, and that's
• 16:37
  why Boxing Day internationally or December twenty sixth is so important because these retailers have
• 16:45
  now you know, have looked at what didn't sell and they realized that it
• 16:48
  is better for them to deeply discount it and get it off their shelves rather
• 16:53
  than carry it into the new year where the trend might not be as as
• 16:57
  strong, or people might not want it or might go out of style.
• 17:02
  So it's better for them to sell it right there on the spot then have
• 17:06
  the carrying costs of it sitting on their shelves. Right. So that's why,
• 17:10
  that's why December twenty sixth through say January fifteenth is so it's such a
• 17:15
  good time because this is when these companies have to clear, literally clear their
• 17:19
  shelves. So buy your Santa suits on the December twenty sixth. It's right,
• 17:26
  it's coming. God, it might have a little black marks on it
• 17:29
  from the going down the chimney, but you'll still get a much better deal,
• 17:33
  right, much better deal. So, hey, Carl, tell us
• 17:37
  where we find you, how we connect with you on the web, and
• 17:41
  what you can do for us. So for anyone that wants to reach me,
• 17:45
  you can find me at Carlgould dot com or Carl three sixties CURL three
• 17:51
  six zero dot com. All right, and the link is in the show
• 17:53
  notes and yeah, Carl, appreciate as always you coming on. We'll talk
• 18:00
  to you again real soon. Happy holidays. Don't get caught up on too
• 18:03
  many buy now, pay later programs. That's that we're watching. To be
• 18:07
  solvent for the coming year. Absolutely, you got it. Talk to you
• 18:11
  soon, Happy holidays. Thanks for listening to carry Lenz's Financial Survival Network,
• 18:17
  your solution to today's trying times. For the latest, go to Financial Survivalnetwork
• 18:22
  dot com. Financial Survival Network now more than ever,