The retail credit game!

In the days when Edgars Truworths and Foschini were the retail kings in South Africa, most shoppers had a clothing account at one of those stores or more likely they had an account at all three.

Having a clothing account was the accepted normal practice, families would buy merchandise and at the end of the month make a payment of one sixth of the account balance. After three correct payments the retailer would increase the customers open to buy or credit limit, and the cycle would continue.

Businesses were built on this principle ……

As with most things, change happens resulting in retailers having to adapt or fail. Today’s consumer is reluctant to open clothing accounts as it ties them to buying from that brand. The new generation of shoppers want to browse all shops in the mall and make a purchase because they love the product not as a result of having an account at a particular store.

Clothing accounts can be expensive to operate with monthly admin costs and very high interest rates. Cash is now King and provides more flexability.

Definate shift in attitude…….

Not so long ago when you walked through one of our malls, stores were screaming from window posters and visual messages at the stores entrance “Open an account and recieve clothing vouchers”

Not today, the big retailers particularly Foschini and Truworths have matured in regards to credit, and have moved onto rewards if buying with cash. Very clever and certainly the right direction to move forward in today’s economy. You won’t see a massive credit message at any Foschini brand store or Truworths.


Unfortunately the reverse is true for some other brands belonging to the Busby retail group. They are so far behind in credit thinking, they are promoting credit with a large message at each store. In a mature credit market when the top retailers have moved on Busby stores are embarrassing themself still trying to get customers to open accounts with interest rates in excess of 20% per annum. (Aldo, Forever New etc)

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Edgars on the other hand are still pushing credit with an offer which suits them but not  the customer. “Open an account and get 50% off your first purchase”.

imageIn small letters they tell you the 50% you save will be given back on a gift card so you need to spend more. The first purchase you still need to pay the full amount. Again Edgars taking the customer for a fool.

enjoy your shopping, and try buying product you want using cash or a credit card.

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