Does Retail Need Bitcoin?
Bitcoin, the nearly anonymous, peer-to-peer online currency, has been getting attention lately. The attention has not been necessarily positive, as bitcoin was the preferred currency of the recently closed down Silk Road “darknet” site that served as a virtual global marketplace for narcotics and other illegal goods.
Nevertheless, speculation is growing as to whether bitcoin will ever become a mainstream means of paying for legitimate retail transactions. Currently, bitcoin is mostly accepted by independent retailers and pure-play e-commerce sites, but it holds potential for more widespread use. Whether bitcoin ever evolves into a mainstream tool regularly employed by larger retailers will ultimately depend on whether a specific need manifests itself.
The jury is still out if that need is, or will be, there. However, bitcoin holds enough potential to make a brief review of the arguments for and against a real need for the electronic currency in the wider retail industry worthwhile.
Reasons Retail Needs Bitcoin
Bitcoin is virtually anonymous (but not totally, as proprietors and customers of Silk Road are finding out). Unless a law enforcement agency is searching for customer identities with a warrant, it is virtually impossible to trace a bitcoin transaction to the user. Even for legitimate purchases, in this age of continual online privacy invasion an anonymous form of digital currency holds appeal.
In addition, bitcoin can be stolen but cannot be counterfeited (it essentially consists of a series of complex math problems). For retailers, the third-party bitcoin transaction providers necessary to complete most bitcoin purchases charge as little as 1% of the total transaction cost, half or one-third of the margin many credit card companies charge.
Reasons Retail Does Not Need Bitcoin
Most POS systems do not process bitcoin transactions, limiting its effectiveness in the increasingly important omni-channel space. Bitcoin value fluctuates far more severely than any major global currency, although some transaction providers are attempting to create stabilized exchange rates. Bitcoins cannot be spent anywhere nearly as freely as normal currency, lowering their value for both consumers and retailers. Digital wallets make electronic transactions with regular currency easier than ever. The Silk Road debacle has given bitcoin a bit of a shady image, fairly or not. And what happens if one or more of the major technology companies making bitcoin transactions possible goes bankrupt?
The Future’s Uncertain
Jim Morrison once sang “the future’s uncertain and the end is always near.” While nobody thinks the end of bitcoin is imminent, its future remains highly uncertain. Currently, it exists as a cool way to pay the bill at independent establishments, sort of a virtualized version of the “Burlington Bread” currency accepted by local businesses in hipster hotbed Burlington, Vermont in the late 1990s and early 2000s. Burlington Bread ultimately failed because it just made more sense to do business in U.S. dollars.
Currently, it also makes more sense for the vast majority of retailers to do business in U.S. dollars, regardless of whether they are online or how big (or small) they are. But observers have pooh-poohed the “need” for new technology since experts in the 1940s said the average American family would have no time to watch TV. As daily life becomes increasingly digitized and publicized, an easy-to-use, hard-to-trace virtual currency with low processing costs may become far more appealing. For now there is the known and the unknown, and bitcoin straddles the line somewhere in between.
NRF: Black Friday weekend spending down 2.8%
New York — Overall spending over Black Friday weekend was expected to hit $57.4 billion, according to the National Retail Federation, which is down 2.8% from last year’s $59.1 billion. It was the first spending decline on a Black Friday weekend since 2009. But there was some good news for retailers: Online sales soared over the holiday weekend.
The NRF estimated that 141 million Americans shopped during the four-day weekend, up 1.2% from a year ago.
On average, the NRF estimated that shoppers spent $407.02 from Thursday through Sunday, down from $423.55 last year because of lower prices it said would persist through the rest of the season.
“Retailers will continue to aggressively promote their in-store and online offerings, looking to entice today’s very budget-conscious and value-focused shopper," said NRF chief executive Matthew Shay.
According to a NRF survey conducted by Prosper Insights & Analytics over the weekend, traffic on Thanksgiving Day itself grew 27% as nearly 45 million shoppers, or 31.8% of holiday shoppers, took advantage of special “turkey day” savings offers, up from 35 million in 2012.
In other survey findings:
- Black Friday was the biggest day: more than 92 million people shopped (65.2%) for apparel, electronics and more, up from nearly 89 million last year.
- One-quarter (25.4%) of holiday shoppers were at stores by 8 p.m. on Thanksgiving night; nearly four-in-10 (37.3%) were at stores by midnight, up from 28.0% last year. Early hours aren’t for everyone however; more than one-third (35.8%) didn’t arrive at stores until 10 a.m. or later.
- Four-in-10 (42.1%) indicated they shopped online over the weekend, or approximately 59 million shoppers.
- Nearly six-in-10 (57.5%) bought clothing and clothing accessories, 37.7% bought electronics, 34.5% bought toys, and 36.1% bought books, CDs, DVDs and video games. Additionally, 29.6% bought gift cards and 16.9% purchased jewelry items.
- More than 76 million (54.2%) shoppers visited their favorite department store over the weekend, and nearly 55 million (38.9%) visited discount stores. Additionally, 32.2% (45 million) shopped at electronics stores and 28.7%, or 40 million, went to clothing or accessories stores for gifts.
- Almost half (49.2%) of holiday shoppers over the weekend sought out information about promotions and sales via advertising circulars, and one-third (33.0%) conducted online searches to find the best deals. Additionally, 36.8% made sure to keep track of emails from retailers, 16.4% reviewed retail companies’ Facebook accounts for information, and 12.2% browsed stores to find bargains and sales.
Walgreens, Evanston, Ill.
Walgreens has opened the nation’s first net zero energy retail store, in Evanston, Ill. (A net zero building produces energy equal to or greater than it consumes.)
The new Walgreens features two wind turbines, nearly 850 solar panels and a geothermal heating and cooling system burrowed 550 ft. into the ground. Combined, the store’s energy-saving technologies and systems are expected to reduce its electricity consumption to 200,000 kilowatt-hours per year, which is about half of an average Chicago-area Walgreens’ store energy footprint.
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