Counteract Boom-Bust Cycles

Getslocal Building Economic Resilience

How Getslocal's B2C Coalition Loyalty Exchange and B2B Capacity Trade Exchange Counteract Boom-Bust Cycles

Getslocal has created and operates two separate programs which have a symbiotic relationship,

1. GETS Rewards: B2C Coalition Loyalty Exchange.

2. GETS Trade: B2B Capacity Coalition Trade Exchange.

GETS Trade operates as a Peer-to-Peer (P2P) mutual credit clearing system and represents innovative approaches designed to buffer against the inherent volatility of traditional economic systems.

These two programs, by fostering B2B inter-business collaboration and B2C consumer engagement, play a pivotal role in stabilizing local economies, particularly during economic downturns. They complement each other by creating a robust counter-cyclical mechanism, mitigating the adverse effects of the boom-bust cycles prevalent in modern economies.

Understanding the Economic Context:
In a traditional economic model, cycles of boom and bust are driven by fluctuations in credit availability, consumer confidence, and overall market dynamics. These cycles often lead to periods of rapid economic expansion followed by sharp contractions, creating instability for businesses and consumers alike. During boom periods, easy access to credit can lead to overexpansion and the creation of economic bubbles. Conversely, during busts, credit becomes scarce, consumer spending plummets and businesses face a significant financial strain, often resulting in layoffs, reduced investment, and even closures.

The programs introduced by Getslocal aim to address these challenges by providing alternative mechanisms that can sustain economic activity, even when traditional economic levers fail. By doing so, they help to smooth out the extremes of economic cycles, supporting a more stable and resilient economic environment.

HOW THE LOYALTY AND TRADE EXCHANGE WORKS:

1. GETS REWARDS:

The Getslocal B2C Coalition Loyalty Exchange is a platform that enables a coalition of businesses to collaborate in offering loyalty rewards to their customers. Unlike traditional loyalty programs that are limited to a single business, this coalition approach allows consumers to earn and redeem rewards across a network of participating businesses. This not only incentivizes consumers to keep spending within the network but also encourages them to explore and support a broader range of local businesses.

Stimulating Consumer Spending: During periods of economic downturn, consumer confidence often wanes, leading to reduced spending. The Coalition Loyalty Exchange counters this by offering consumers tangible rewards for their spending, effectively increasing their purchasing power. This stimulates demand, helping to sustain business revenues even in challenging times.
Building a Strong Local Economy: By creating a network of businesses that collaborate rather than compete on loyalty, the program fosters a sense of community and mutual support. This network effect ensures that money spent within the coalition circulates locally, supporting a broader range of businesses and helping to prevent economic leakage to larger, non-local competitors.
Sustaining Business Operations: For businesses, the coalition provides a way to maintain customer engagement and drive sales, even when economic conditions are tough. By leveraging the collective power of the coalition, businesses can offer more attractive rewards than they could individually, making them more competitive and resilient.

HOW THE B2B CAPACITY TRADE EXCHANGE FUNCTIONS

2. GETS TRADE:

The B2B Capacity Trade Exchange is a P2P mutual credit clearing system that allows businesses to trade goods and services without the immediate exchange of cash. Instead, businesses extend credit to each other based on mutual trust and the understanding that these credits will be settled through future transactions. This system operates independently of traditional financial institutions, providing an alternative source of liquidity.

Maintaining Liquidity in Tight Credit Markets: In a recession, access to traditional credit is often restricted as banks become more risk-averse. The Capacity Trade Exchange allows businesses to continue trading by using their existing capacities—such as excess inventory, underutilised services, or future production—as collateral for credit. This keeps the wheels of commerce turning even when cash is scarce.
Reducing Dependence on External Financing: By using mutual credit, businesses can reduce their reliance on external financing, which is often subject to the whims of the broader economic environment. This internal credit system allows for greater financial stability, as businesses are not exposed to the same level of risk from external financial markets.
Encouraging Business Continuity: The Capacity Trade Exchange also promotes business continuity by ensuring businesses can continue operating and meeting their obligations, even in tough economic conditions. By trading within the network, businesses can fulfil their needs without resorting to layoffs or cuts in production, preserving jobs and supporting the local economy.

COMPLEMENTARY BENEFITS AND COUNTERCYCLICAL EFFECTS

The synergy between the Getslocal B2C Coalition Loyalty Exchange and the B2B Capacity Trade Exchange is particularly powerful in counteracting the negative effects of economic cycles:

Enhancing Economic Resilience: Together, these programs create a buffer against economic downturns by sustaining both consumer spending and business operations. The B2C Loyalty Exchange ensures that consumers continue to spend within the local economy, while the B2B Capacity Trade Exchange provides businesses with the liquidity and resources they need to keep operating.
Supporting Employment and Income Stability: As businesses within these networks remain operational and consumers continue to spend, income and employment levels are more likely to remain stable. This reduces the risk of widespread unemployment and the associated social costs that often accompany economic recessions.
Promoting Sustainable Economic Growth: By reducing reliance on external credit and fostering local economic activity, these programs contribute to more sustainable economic growth. The mutual support networks they create are less vulnerable to the shocks and stresses that characterize the traditional boom-bust cycle, leading to a more balanced and robust economic environment.
Fostering Long-term Business Relationships: The mutual credit system and coalition loyalty exchange encourage long-term business relationships and partnerships. These relationships are built on trust and mutual benefit, which can help businesses weather economic storms and emerge stronger.

Conclusion

The Getslocal B2C Coalition Loyalty Exchange and the B2B Capacity Trade Exchange represent a forward-thinking approach to economic stability. By fostering collaboration among businesses and incentivizing consumer spending, these programs provide a countercyclical force that mitigates the effects of economic downturns.

They ensure that local economies remain vibrant and resilient, even when faced with the challenges of the broader economic cycle. In doing so, they not only support individual businesses and consumers but also contribute to the overall health and stability of the economy as a whole, providing a much-needed antidote to the volatility of traditional economic systems.