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Why Cyber Monday proves things are not so bad after all

The festive period looms and it occurs to me that the whole idea of good will to all men doesn’t seem to extend to the political elite and a press corps bent on spreading gloom faster than the Eyjafjallajökull volcanic dust cloud. It is tough for the average Western citizen to maintain a cheery outlook on life. In fact, looking on the bright side right now will probably provoke either head-shaking pity or downright mistrust.

Apparently, consumers aren’t buying; the standard of living is set to deteriorate for years to come. The bad guys are still getting rich and the common man is still paying for it.

And yet one thing that recent turmoil has taught us is that it all comes down to one thing: confidence. If the consumers have confidence they will spend. If the markets have confidence they will lend. If the investors have confidence they will extend. It seems bizarre that the very people who have the greatest interest in building market confidence seem hell bent on keeping expectations low.  

At the time of writing, the fate of the Euro still seems to be in the balance, unemployment is crippling the chances of the younger working population in almost every Western market, and trust in politics and institutions is at an all time low.

So why (according to is it that on the 28th of November 2011, dubbed Cyber Monday in the US, did this happen:

“ComScore, which tracks Internet data, announced late Tuesday that total sales on Cyber Monday – online retail's answer to Black Friday – rose a whopping 22% from last year. According to the company, online sales totalled $1.3 billion on Monday, up from slightly more than $1 billion on Cyber Monday 2010, to mark the biggest day for online shopping in U.S. history.”

This came three days after Black Friday – the US’ biggest shopping day which saw a massive 7 per cent rise in sales year on year.

Last week, in the UK, we were hit by the country’s biggest public sector strike in a generation. Economic catastrophe?  Perhaps not. According to the Financial Times, the strike “proved a boon for Britain’s battered high streets, with official figures recording a 38 per cent increase in shopper numbers on Wednesday as public sector employees and parents of school-age children hit the stores.”

With impressive understatement, the newspaper quoted Anita Manan from Experian as saying, “Looking at the increase, you might assume the picket lines were quite quiet.”

In short, consumers are spending. And last week, the UK Office of National Statistics published their first survey of National Happiness.  To the horror of the pessimists, it appears that more than 70% of us are happy, rating our lives a surprisingly jolly 7.4 out of 10. What is going on?

2011 has seen more global change than any year I can recall, from financial to political. Yet underlying those huge shifts, the power of the internet, mobile communications and friction-free payments is enabling effective trade and open communication like never before. This technical and economic miracle is no longer news, but its effects are all the more profound for being knitted into everyday life across the globe. 

If the dust ever settles on the Arab Spring, the Euro crisis and the re-establishment of order in the markets, I think we will look back and see that the tremendous strides we have taken in communications and transactional technology have created a huge, sustainable improvement to the world’s economy.

In my own small way, I am proud of the fact that our technology is driving big steps in mobile and contactless payments and of the way we have been able to innovate with our banking customers. Together we are helping make the world a slightly better place.

The exciting thing is, we have only just begun. All we have to do now is cheer up the commentators.  


Comments: (2)

A Finextra member
A Finextra member 15 December, 2011, 12:34Be the first to give this comment the thumbs up 0 likes

Nice blog and perspective.  So what you are saying is that not a lot has really changed, people still want to spend, and its all a matter of steering us in a more positive way.  It seems like only last year that we were being 'told' everything was rosy.  Well I think that was false confidence, and its hitting harder now, and will be harder still when banks turn the screws and increase rates (having increased margins).  I am leaning towards the doomsayers, and think there are a lot 'spenders' out there who ran out of slack as the cost of living has rocketed.   i.e. the Cyber Monday is more a sign of panic buying to get stuff cheaper.  In the UK, when people go under, its the state that picks up the cost, and that's the public.  So you don't want the 'survival of the fittest' approach, you need the 'those with the broader shoulders should help' approach.  Its just that those are the ones most able to avoid it (vis a vis corporate, monied and investors).


A Finextra member
A Finextra member 19 December, 2011, 14:53Be the first to give this comment the thumbs up 0 likes

Thanks. I dont think that nothing has changed - I recognise that the economic situation has been stress tested as never before. What I am really saying is that for the media, good news is no news and in most democracies there is a strong motivation for the opposition to paint it black, maintaining the negative pressure on market sentiment. Clearly we have huge challenges to our economies pretty well across the planet, but market sentiment is highly infectious and if we gave more even prominence to the positive and the negative, markets might just move more gradually and rationally.