Black Friday will begin early this year in South Africa, as online retailers try to get in ahead of the November 29 rush to spend.
Leading fashion retailer, Superbalist, which first took part in Black Friday in 2014 and claims its Black Friday Showdown is SA’s biggest online fashion sale, has told its newsletter subscribers that Black Friday will happen sooner for shoppers this year, with early access Black Friday guaranteed deals on selected days in November.
Since 2014, it says, sales have more than doubled each year, and Black Friday 2018 saw record traffic to the site, generating more than over R40-million in revenue on the day.
South Africa’s largest payment service provider, PayGate, says its tracking of payments for Black Friday also shows the number of transactions doubling every year for the past three years. Payment clearing house BankservAfrica says it saw a 55% growth in transactions in 2018 compared to the previous year.
PayGate expects 2019 Black Friday transactions to grow by 30% this year. It says “local shoppers can expect a deal bonanza as retailers extend their number of sale days”.
The shopping holiday originated in the US as the day after their Thanksgiving holiday when retail outlets would significantly reduce prices. This brick and mortar sale day was soon joined by Cyber Monday when online stores capitalised on the primed deal-hunting psyche of consumers at the end of the weekend. The two days have now blurred into one chaotic shopping sensation.
Just how effective the marketing of this weekend is can be seen in the record-breaking numbers out of the US. In 2018, the US online sales alone hit $6.2 billion.
“To be fair, South African ecommerce growth comes off a very low base,” says PayGate CSO, Brendon Williamson. “It has only been in the past three years or so that it has really taken off. This is largely driven by user behaviour and the massive ad spend thrown at the shopping day by the larger retailers. We expect many of the local retailers will extend the sale days to more than just the weekend and may even spread it out over the week ahead of the official November 29 date. This will encourage those who receive their salary cheques on the 25th to get involved while they are still cash flush.”
Based on BanksServe Africa’s publically released figures, as well as its own analysis, says PayGate, in 2018 it processed 64% of Black Friday transactions. The company believes this could increase to as much as 70% in 2019.
While PayGate expects the sale days to be extended, it says that the size of the baskets will probably remain similar to 2018, with consumers aware of the event and saving up to take advantage of the prices – most especially for tech and hardware and appliances.
Click here to read about how businesses are gearing up for the holiday.
Businesses are gearing up ahead of time
Lessons have been learned over the years and the more established South African businesses are in the thick of preparations for the shopping extravaganza.
“We have definitely seen a surge in new merchant applications,” says Williamson. “All within the online payment ecosystem are much more aware of the unique needs of e-commerce businesses and so are better positioned to help set up merchants to enable faster payments. From a transactional process point of view, we know we are prepared, as our processing systems now auto scale as the transaction volumes demand, which gives our merchants real peace of mind should their sales hit unexpected peaks during the day.”
The last and lingering impression when shopping online is the act of receiving the product. For retailers both large and small, the last mile in the customer journey can have a direct impact on retaining customers and boosting repeat business.
Grant Gietl, General Manager at World Net Express, says South African businesses need to keep a few vital facts in mind when planning for the delivery logistics associated with Black Friday and other seasonal sales.
“Good logistics companies will track historical data and plan ahead with their ecommerce clients. We have seen that our client deliveries can increase by anything from 30% to 100% during Black Friday promotions, and we make sure we are ready to handle the extra volume by working closely with them in the planning phase.”
World Net Logistics and Express has offices and warehouses in all the major centres in South Africa and owns a fleet of more than 100 vehicles. Gietl says it also has an extensive network of service providers that help it deliver in the more remote areas. He points out that a seamless ecommerce service relies on excellent IT integration with clients.
“Ensuring solid IT integration with your ecommerce partner is extremely important. A higher level of automation allows retailers to easily scale up or down depending on their requirements and creates fewer distribution bottlenecks. Using IT also enables us to use text functionalities reach end customers before attempting delivery. Not only is this important for efficiency, but ensures they receive their goods at a time and place that is convenient for them.”
Williamson leaves local retailers with some important advice: “It’s clear South African consumers are changing their buying behaviour to more closely reflect those seen internationally. Big shopping events, like Black Friday, will become increasingly important to local retailers. When coupled with a sluggish economy, big saving events will draw further attention still and local retailers should ensure they are ready to take advantage of these opportunities.”