Although reports have emerged of quieter-than-normal retail stores this Black Friday weekend, it seems many South African consumers turned to online shopping to beat the crowds – and the coronavirus.
The number of shoppers introduced to e-commerce for the first time because of the Covid-19 pandemic led to a huge spike in online sales this Black Friday, according to PayFast, an online payment gateway operator.
Black Friday weekend total online transaction volumes shot up by 50% compared to 2019, PayFast said on Monday. The company processed a 283% increase in total payment volumes on Black Friday alone compared to a normal busy day such as pay day.
“This year’s Black Friday spend surpassed the volumes we’ve seen in previous years. The rapid adoption of e-commerce over the course of 2020 has meant that we’ve seen more people shopping online, especially amid fears of a Covid-19 resurgence,” said PayFast MD Jonathan Smit in a statement.
The highest transaction for the day was R299 950 and online shoppers spent more per basket at R1 243, compared to the 2020 average basket value of R803. “Alongside big-ticket items like TVs and gaming consoles, more purchases were made online for items that are traditionally brick-and-mortar retail store-focused, like toiletries, cosmetics and essentials,” said Smit.
Interestingly, 66% percent of purchases were made using a mobile device – suggesting that shoppers without a home computer are increasingly ordering online (or prefer the convenience of mobile).
This year, 66% of transactions were made using cards, but alternative online payment options are on the rise. This include instant EFT, QR codes and mobile wallets.
Meanwhile, Nedbank said it saw a decline in physical, in-store activity on Black Friday.
“Consumer spend by Nedbank clients across digital shopping channels has shown significantly higher growth levels than those of traditional channels, which not only points to changing consumer behaviour in general due to the pandemic, but also that more South Africans used digital channels specifically to do their Black Friday shopping this year,” said Mpho Sadiki, executive for card and payments acceptance at Nedbank.
It offers “clear evidence of a rapid shift from physical to digital consumption”, a trend that is “reshaping retail trade in South Africa”, Sadiki said.
While Nedbank’s payments data point to the possibility that the economic fallout of the pandemic may have resulted in slightly muted overall Black Friday retail activity (down 5% year on year), this was largely due to lower physical sales volumes and turnover figures.
“In contrast, total digital turnover (in terms of Nedbank processed payments) across all enterprises increased by 52% year on year. While large enterprise digital sales contributed 36% to this figure, they actually saw a drop of 9% in volume. SMEs, on the other hand, enjoyed a 12% rise in volumes year on year, and digital turnover for this vital segment was up a staggering 173%.”
Sadiki said that the significant disparity between the negative volume and turnover growth seen across physical outlets and the significant rise in digital sales, both in terms of volume and value, confirms that digital “has now become the preferred way for the majority of South Africans to shop”.
“The outstanding performance by SMEs over Black November is especially significant, Sadiki said, “because it demonstrates the effect that this shift towards digitised consumption can and will have in terms of levelling the retail playing field and creating an environment in which all merchants are able to compete fairly for share of market – which is obviously of great benefit for consumers as well.”
Though not related to the growth in e-commerce, Yoco, the provider of payment solutions to small and medium businesses, said that based on its own data, small businesses experienced a “remarkable” 46% increase in card transaction volume on Black Friday compared to the average volume processed on a Friday after pay day.
“In addition to the increase seen in overall volume on Black Friday, small businesses experienced significant surges of more than 40% in turnover across Saturday and Sunday on Black Friday weekend when compared to a standard end-of-month weekend,” said Yoco CEO Katlego Maphai. — (c) 2020 NewsCentral Media