Black Friday has truly revolutionised the retail space within the South African context. For the first time in retail, consumer behaviour and needs are driving the sales offerings, influencing how brands are reacting to this day of savings.
What started as a sales gimmick in the United States- has ended up as one of the major economy influencers in the fourth quarter. Ultimately, since its inception 5 years ago, Black Friday has grown with 9900% exponentially in the South African context.
Black Friday in South Africa
As a nation with a very ill distributed income spectrum, it’s become increasingly important for consumers to cut their extra spending on their consumer baskets. The rise of Black Friday has revolutionized the way South Africans view sales, and subsequently approach retail. From household items to luxury branded goods, most brands are jumping on the Black Friday bandwagon, but is it really that profitable?
42% of South Africans reported that they will be taking part in 2019’s Black Friday sales. Most of these discount savvy shoppers said that they will be heading to brick-and-mortar stores, with only 39% reporting they will be shopping exclusively online.
The statistics also differ throughout the various regions of South Africa. About 46% of Gauteng’s residents will be shopping exclusively online, while those in the Western Cape is much more willing to queue up. In fact, more than 14% of those living in the Cape Region is willing to queue overnight, while 26% reported that they are willing to queue all day.
However, the question remains, do they actually believe they’re saving money? 65% of South African consumers believe they are truly buying into deals on Black Friday, with Millennials as the biggest promoter of these sales. There should however be mentioned that 27% of these 65% think that queuing up isn’t worth the hassle, rather moving their purchases online.
Although the consumers are buying into Black Friday, are they actually converting?
The Historic data
Historically, Black Friday has been very profitable for brands- and 2019 promises to be no different. Year-on-year data has shown that the participation in Black Friday has increased from 54.64% in 2017, to 66.49% in 2018. Online retailer Takealot reported sales of R196 million in 2018’s black friday sale- a 125% year-on-year increase. Online clothing retailer Superbalist reported R40 million sales during this discounted period in 2018. The average South African reported paying R1654 for their total Black Friday cart.
While most brands tend to offer big ticket items like televisions and microwaves, it’s actually the staple items that gets the most traffic to the stores. The items with the highest sales count was coffee, detergent, disposable nappies, carbonated soda, and beer. While items such as chicken, bread, and sugar did not sell well. This indicated that simply discounting n Black Friday for the sake of discounting isn’t always profitable. Keith Botha, the MD of Nielsen South Africa Connect, South Africans are loading their pantry, while treating themselves a little too.
Worldwide, the growth of monthly sales during November has surpassed that of December, which is a great paradigm shift from the previous triumphant December sales figure. Black Friday and Cyber Monday is the main contributors of this shift.
So ultimately, is this worth the discount risk?
The 2019 Rush: why take part?
The take away for 2019 should thus be the sheer profitability of pairing the right consumer with the right Black Friday deal. With more than 550 brands offering their stock at a lower rate, the messaging that consumers are faced with can be quite difficult to encode. While the traditional discount day is the day after Thanksgiving, recently this has shifted towards a “Black November” where more brands are offering certain deals for a longer period of time- Pick n Pay launched their online exclusive Black Friday deals on their website in early November, but like all other brands, withholding their big ticket items.
Nielsen found that the South African audience is obsessed with savings, with more than 75% of consumers being aware of deals and discounts.
This means that brands who want to take part in Black Friday should keep their prices honest, and offer their consumers great enough discounts that motivates them to get their cash out. Black Friday really does implicate massive revenue increases, but brands need to be aware of what their consumers want, and how much they are willing to pay for certain items.
All the best brands are taking part in Black Friday this year, will yours?