Five years ago, Black Friday and Cyber Monday didn’t even exist in South Africa. Today, they’re a major cash cow for local retailers. On Black Friday last year, consumers spent a record R2.9 billion, and that number is expected to jump 30% this year, with e-commerce playing a major part in that growth.
Problem is, many local e-commerce businesses will lose out on sales through cumbersome payment and checkout processes that cause customers to abandon their virtual shopping carts, says Thomas Pays, the chief executive of automated EFT payment provider Ozow (formerly i-Pay).
“Black Friday and Cyber Monday are a tremendous opportunity for local e-commerce businesses to make money,” says Pays. “It’s the perfect platform to drive sales, attract new customers, and create consumer excitement.”
“But in a tough economy, it’s vital that you’re able to process every transaction reliably and securely. Customers won’t wait for poor experiences. If you’re making them fill out numerous fields, or you’re unprepared for the boom in site traffic, you’re pushing your would-be customers to your competitors.”
In 2018, many major payment platforms in South Africa buckled under the transaction volumes and went offline even before stores officially opened for business, causing thousands of lost sales. People could browse online stores but could not checkout and pay for their orders. In the end, several retailers and e-tailers, like Takealot and Loot, encouraged consumers to use alternative digital payment platforms to complete their purchases.
In spite of these payment hiccups, the Rand value of sales in 2018 was 1000% higher than 2016, and this is expected to grow even further in 2019. Ozow had already surpassed its entire 2017 Black Friday numbers by 8am. At one point, it was processing 438 concurrent transactions, with the fastest transaction taking 8 seconds.
This year, transaction volumes on Black Friday and Cyber Monday are expected to be a staggering 1950%1 higher than an ordinary shopping day as bargain-crazed consumers descend on online stores. The average consumer is ready to spend more than R1700, largely on clothes, shoes and electronics2.
Pays says alternative payment systems, like automated EFT payments, are becoming increasingly popular because of their sheer ease of use, with no tedious filling in of credit card details needed for every transaction. A further benefit is that they open up the online shopping universe to people who don’t have debit or credit cards.
“For retailers to make the most of the Black Friday opportunity, it’s no longer good enough just to be online,” says Pays. “If you want to drive growth, you’ve got to offer consumers digital payment solutions that are secure, do not require credit cards or customer registration, and are available even in the face of the heaviest traffic volumes.”
“The bottom line: if you want more sales, happier customers and fewer headaches, make the checkout process as easy as possible. Give your customers a choice of payment platforms. And make sure your payment platform can handle the increased loads. Do that, and you’ll be laughing all the way to the bank.”