#10things retailers need to know about Black Friday this year
South African retailers are expected to ring up around R11.3 billion rand in additional sales over the period of November, as consumers splash out on Black Friday deals.Friday, 19 Nov 2021
Have retailers hurt their Christmas sales with Black Friday – effectively taking money out the market for December? Or is this a golden opportunity for cash-strapped South African shoppers to get things they ready need, but can’t usually afford? This is of course, provided logistics challenges in the global supply chain, don’t impact availability of goods on shelf. According to the latest research, South African retailers are expected to ring up around R11.3 billion rand in additional sales over the period of November as consumers splash out on Black Friday deals, with general dealers expected to capture a 55% (R6.2 billion) share of the value. That’s from research conducted by the Bureau of Market Research on behalf of Capital Connect, the Fintech business funding division of The Connect Group.
When Black Friday was new in South Africa and not every retailer was on board, it was an opportunity to steal share early in the season, but it’s now more about protecting your own share,” says Marino Sigalas, account director at The MediaShop. Adds Peter Harvey, MD of DPO South Africa: “South Africa’s steadily increasing support of Black Friday has allowed us the ability to learn and grow with the demand. Last year we saw a spike in smaller-value transactions which resulted in volumes on the day reaching four times higher than a normal day’s trade. We are preparing our infrastructure to handle more than that this year. That said, many retailers are stretching the event out over a week, or even the full month, which will smooth out the traffic curves to some extent. But, as we advise our merchants, solid planning well ahead of the time will always deliver better results.”
Based on his interactions with some of the DPO Group’s 60,000+ active merchants, Harvey believes merchants should have planned fortheir inventories to overcome any potential supply chain challenges, saying some merchants have already faced issues securing stock. “eCommerce consumers have come to expect fast delivery times. If merchants have concerns about fulfilling their orders timeously because of increased volumes or challenges in getting stock from their suppliers, they should manage shopper expectations so as not to ruin the overall customer experience,” he warns.
1. The predicted numbers for November and Black Friday
Capital Connect predicts that additional November retail sales due to Black Friday are forecast to be significantly below the R15.4 billion generated in 2019, but also representing a strong recovery from the R10.3 billion over November 2020. The research shows that Black Friday sales and promotions will generate a further R8.2 billion in wholesale impact, translating into a total retail and wholesale impact of R19.5 billion. Retailers in textiles, clothing, footwear and leather are expected to ring up nearly R2.8 billion in additional sales, while retailers in hardware, paint and glass are forecast to generate around R973 million in extra value. Household furniture, appliance and equipment retailers are also forecast to generate close to R904 million in additional sales.
2. Survey finds 67% of SA consumers planning to shop Black Friday deals
A Q3 consumer survey by retailer, Game, has found that despite 2021 being a challenging year economically, 67% of South African consumers are hoping to find the best possible deals on popular items this month – as retailers launch their plans for Black November. The survey found that groceries and essential items (77%), appliances (63%) and electronics (62%) were the most popular categories that consumers were looking to save on this year. Interestingly, through its Black November SBWL competition, which so far has over 13,000 entries, Game found its customers were most interested in purchasing Smart and LED TVs this year – followed by laptops and smart phones. Appliances such as fridges, washing machines and microwaves were also popular options amongst competition entrants.
3. Consumers need a good reason to shop this Black Friday
Last year’s Black Friday retail sales massively underperformed for many reasons, according to Marino Sigalas, account director at The MediaShop. He says that some consumers were not comfortable with the thought of being shoulder to shoulder with other shoppers during a pandemic. “Although we are in a better space this year versus last in terms of our case numbers, there is no way of knowing how open consumers will be to the mayhem that is usually associated with Black Friday,” says Sigalas. “Last year many retailers ran longer duration sales, for example, for the whole week, in order to get consumers in with fewer crowds. This didn’t seem to work though and although there will most likely be similar and longer promotions this year, there is no way to know what the uptake will be.”
4. Online sales across the country continue to rise, but the same effect has not been mirrored in store
Major benefactors of online shopping include Takealot.com and Checkers Sixty60. “During the pandemic, consumers have been limiting their number of shopping trips but increasing their basket size when shopping, this should be a positive indicator for Black Friday, but it didn’t pan out that way last year. Shoppers will need a really good reason to come out shopping this year,” Sigalas says. Consumers in the lower income bracket are also shopping closer to home to avoid public transport costs. Local, corner shop retailers have benefitted from this trend, reports Media Shop.
5. There is a feeling of some Black Friday fatigue with consumers
The specials are no longer as dramatic as in years gone by. Retailers incorporate Black Friday as a standard strategy for sales and can’t pull out or they would be down on targets. Therefore, expect a number of retailers to double down again this year to reignite the phenomenon, advises The Media Shop.
6. Consumers want to stock up pantries and cupboards with more essential items
“While big ticket items are always on consumer’s shopping lists during our Black November month, many of our competition entrants also said they’d like to stock their pantries and cupboards with more essential items this year – such as non-perishable food items and nappies, as popular options. This is proof of how stretched the consumer budget is in 2021 and follows the trend we have seen with consumer shopping habits over the last 18 months where shopping has become about essential needs rather than luxury items and wants,” explains Katherine Madley, vice president of marketing, Game.
7. Retailers are expected to adopt a more aggressive approach this year
South African payment specialist, DPO South Africa, is expecting similar or greater growth for Black Friday 2021, due in part to local shoppers’ increasing comfort with ecommerce. Retailers will this year also fight to make the most of Black Friday, which has quickly gained favour with local shoppers. “We were all expecting a dip in sales last year, but it didn’t materialise. Rather, we measured a 40% year-on-year increase for the Black Friday and Cyber Monday weekend last year, and we are expecting it to be similar this year, or even a little up. This is largely due to how comfortable South African shoppers have become with the mega shopping event. Consumers have also become more savvy, doing their research online and knowing exactly what is and isn’t a good deal. This is going to force retailers to work a little harder to attract our hard-earned disposable income,” adds advises Peter Harvey, MD of DPO South Africa.
8. Drawn-out effects of Covid on the market will impact disposable income this year
Harvey says retailers needed to draw up their battle plans early. “Meaningful savings will catch the eye of the consumer who will begin their research early and have a plan in place to ensure they can optimise their spend. Don’t think a 10% discount qualifies as a Black Friday special. Once you have your product and discount strategy in place, then you can start looking at ensuring you have all your digital marketing and logistics in place. These will also play a large part in ensuring you capture your piece of the profit pie this year,” advises Harvey.
9. Buy-now-pay-later payment options could help boost spend
Harvey says the growing popularity and trust in the buy-now-pay-later payment options could entice customers to spend a little more than they otherwise would. This is especially true of those consumers who may be cash strapped, or who simply want to take advantage of the split payments. Other payment methods that are likely to see good growth this year include Apple Pay and Samsung Pay as well as other mobile options. Harvey also expects to see a good showing from transactions supported by 3D Secure as South Africans become more security conscious.
10. Domestic travel is a likely deals winner this year
As the number of vaccinated adults increases, Harvey says local consumers will be shopping around for travel deals. “We are expecting to see the travel bug bite again as locals look to shake off their cabin fever. This is great news for the local hospitality industry which has really taken a knock. Again, merchants must make sure that they present really compelling offers. These big-ticket purchases will need to be extremely competitive if venues and airlines hope to secure bookings,” he says.
Main image credit: The Media Shop.
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