Black Friday is not dead in South Africa – far from it. But it is changing.
The frenzy surrounding the US-born shopping discount day in South Africa dulled in the years following the Covid-19 pandemic, with an especially precipitous dip in shopper turnout and spending in 2023, which fuelled speculation that the shine was coming off it.
This is not the case.
According to Andrew Stein, vice president of group marketing at Walmart-owned Massmart, South African consumers are still interested in Black Friday, but a confluence of macroeconomic headwinds in the last few years have limited consumer spending power.
The tide is turning in 2024, according to Stein.
“I can see why people thought that post the pandemic but it’s certainly not the case this year,” Stein told TechCentral. “Our [Black Friday] campaign lasts for five weeks and we can see there is much stronger consumer sentiment this year compared to last year.”
Steyn cited lower interest rates, lower food inflation, a more consistent supply of electricity and implementation of the two-pot retirement savings withdrawal system as factors that have eased South African consumers’ conservativism, leading to an uptick in Black Friday 2024 sales.
Spending more
He said consumers have shifted their spending more towards pantry items in the last few years, but research conducted by Massmart prior to Black Friday showed that many South Africans had saved up with the intention of buying “big ticket” items on the day.
Preliminary sales data from Massmart-owned Game and Makro stores showed a number of pricier items on special, including TVs, were already sold out, said Steyn. Sales volumes from around lunchtime on the day suggest the South African consumer is on the rebound.
“This is a recent trend and it is rapid. We are going to take a long time to recover, but we are starting to recover and customers are spending more this year,” he said.
Read: Big hopes for a robust Black Friday in 2024
Macroeconomic factors aside, the nature of Black Friday has also changed. Retailers now run specials throughout the month of November, allowing consumers to shop more leisurely for discounts instead of being frenzied on a single day.
This diminished level of chaos associated with a single day, said Bash co-founder Luke Jedeikin, may contribute to perceptions that Black Friday has lost some its appeal among South Africans.
“In the 2010s, you had lower trade than normal in the November days preceding Black Friday,” Jedeikin told TechCentral. “All of that pent-up demand was released on a single day.”
According to Jedeikin, the nature of Black Friday has changed to the benefit of both retailers and consumers. He said there was a period around 2017 when consumers showed signs of diminishing interest in Black Friday, but this was caused a poor shopping experience on the day, resulting from the chaos that ensued in stores. The online shopping experience, he added, was also fraught with difficulty, with customers often getting their orders weeks after placing them – and often they’d get the wrong good delivered.
Read: Takealot opens huge new distribution centre in Durban
“No business has the elasticity to scale 20 or 30 times normal volumes for a single day. What was never really spoken about in those days, when people used to boast about Black Friday sales, was the operational fallout. They didn’t report on how many orders were mis-picked, how many were misdelivered because the address was wrong, or how many parcels were late because couriers were simply incapacitated by an irrational level of volume.”
He said the lower spike in one-day sales also comes with less refunding, cancellations and damage to products in stores.
Changes in shopper behaviour have coincided with technological advancements that have contributed to simplifying the shopping experience. Bash, for example, allows users to see which TFG stores have the particular items they are looking for and exactly how much stock is left in store. The shopper can then either order the item for delivery online or plan a trip to the store with a fair degree of certainty that they will get what they are looking for, eliminating the need to rush into a store and risk getting involved in a stampede for an uncertain bargain.
Positive signs
Bash reported a 70% year-on-year increase in sales from 1 November leading up to the day before Black Friday, but there were positive signs across the industry. Absa reported a 20% increase in transactions compared to the same period in 2023 by midday on Friday, with a record 454 transactions per second processed during peak hours.
Read: Average value of online transactions is outpacing physical retail: Absa
“That extreme delta between tumbleweeds and a meteoric rise in sales has been smoothed. Black Friday is still the biggest day of the year, but it lost some of its lustre in the late 2010s because customers got over being disappointed. The market has now improved to a point where it is a comfortable day to shop,” said Jedeikin. – © 2024 NewsCentral Media
