Black Friday 2020 – a welcome light for local retailers?

Black Friday 2020
Share this with your network

Last year was the biggest Black Friday in South Africa to date. The total number of transactions processed by BankservAfrica (in-store and online) was just over seven million, a 36% increase on 2018’s 5.2 million transactions. Total spend was in the region of R6 billion, an impressive 106% increase on 2018’s R2.9 billion (which was already double the takings of an ordinary trading day).

But 2020 is a far cry from 2019. Some of South Africa’s biggest retail chain stores have been pummelled by the pandemic. Massmart, owner of Game and Makro, reported a R1-billion loss for the half year ending 29 June 2020, while Woolworths expects its earnings to fall by 70% compared to a year ago*.

“In this retail tunnel, Black Friday shines a welcome light – an opportunity for retailers to recoup at least some of the losses they suffered during lockdown, provided they think differently and plan creatively,” says Steven Heilbron, CEO of the Connect Group of Companies, a leading fintech solutions provider.

2019 vs 2020

A post-Black Friday study conducted by GeoPoll in 2019 can be useful to retailers for planning purposes leading up to 27 November 2020. Survey participants indicated that food items, beauty accessories and electronics and appliances were the most sough-after items on their Black Friday shopping lists. In view of the economic hardship visited upon millions of South Africans at the hands of Covid-19, it is only reasonable to expect that more basics, and less luxuries, will be what consumers want in 2020.

The GeoPoll survey further revealed that 67% of South African consumers did their Black Friday shopping in-store only. A much smaller group of shoppers, 21%, indicated shopping both in-store and online, and only 11% of shoppers shopped online. While it can be expected that online shopping has gained traction beyond 11% over the past few months of isolation, quarantine and social distancing, the vast majority of South African consumers simply don’t have the means yet to shop online.

Speaking of the past few months, the coronavirus pandemic has hurt the economy – globally as much as locally – to the extent that consumers have less money to spend on Black Friday this year than was the case in 2019. Many have lost their jobs, had to accept a pay-cut or are earning less than a year ago. Even those who had been saving to buy a big-ticket item or to get ahead on their Christmas shopping on Black Friday, might have had to use some of those savings to make ends meet.

And let’s not forget that South Africa cannot afford for Black Friday to be a Covid-19 super-spreader event, despite the fact that local consumers prefer to shop in-store.

Retailers must be prepared

“All these factors leave us with a complicated Black Friday picture,” says Heilbron. “The day, and in fact, the whole month during which Black Friday extends, remains a golden opportunity for retailers to recover some of the losses they have suffered this year, but they will have to be very smart in their approach.”

According to Heilbron, factors to consider include extended trading hours to compensate for fewer shoppers that can be allowed in-store at any given time, and having more hands on deck to process shoppers as they arrive and leave stores. Retailers should also consider services such as pre-orders and drive-through pick-ups, which have marketing and logistics implications.

In addition, retailers would do well to stock up early on items they expect to be in demand on Black Friday. Global supply chains have been severely disrupted and turnaround times on imported goods are in many cases significantly longer than before.

“These realities in the time of Covid-19 add to the complexity and cost of doing business, but addressing them is an investment worth making – not only to leverage Black Friday, but also to get a head start on trading successfully in the future,” concludes Heilbron.

Local e-tailer shares their predictions

“Despite 2020 being a very tough year for almost everyone, there’s nothing to be gained from not recognising Black Friday and the festive season at large,” says Matthew Leighton, spokesperson for local e-tailer, OneDayOnly.co.za, who says that now more than ever, the economy requires stimulation and regrowth – and Black Friday is the biggest opportunity the eCommerce industry has to contribute towards that economic stimulation.

“Internationally, well-established eCommerce markets are still experiencing growth, and we expect to see the same locally. There could be an even higher jump in terms of growth as people avoid physical retail outlets on sale day due to Covid restrictions on store capacity,” says Leighton.

He predicts some likely changes in terms of shopping behaviour online. “In the last two years, high traffic times were consistently in the early morning at 6am and 9am, as people tried to lock down their deals before the start of the work day and then we would see a peak again around 11am and 1pm – as people took their work day tea or lunch breaks. But this year, with the shift to work from home, the OneDayOnly.co.za team expect to see a move in terms of peak time. “We expect this to be more scattered as people are not beholden to such a rigid work structure,” says Leighton.

The other area that they could see a shift is in terms of time spent on the site. “Usually, people spend up to three times longer on the site on Black Friday than on a usual shopping session. While this could be a stretch, we may see this gap close slightly as many people have become digitally and eCommerce savvy as a result of the lockdown,” says Leighton.

For those South Africans who will be buying, the OneDayOnly.co.za team expects the uptake of tech products to continue from last year, with the likes of drones, action cameras, TVs, fitness watches, gaming consoles, and audio equipment.

In addition, Leighton says large kitchen appliances are always in demand on a big shopping day like Black Friday – things like washing machines, dishwashers, coffee machines and blenders. “Last but certainly not least, we should see a similar spike in interest in fashion and fitness apparel, toys, and Christmas gifts,” says Leighton. He advises consumers to avoid irresponsible buying and on credit. “We firmly believe that Black Friday is a great way for consumers to secure some genuinely excellent deals, but the trick is to do this responsibly – with a list and a budget.”


Share this with your network