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Prepare for click-and-mortar boom on Black Friday

Retailers and consumers are preparing for year-end online spending blowout, with ecommerce in South Africa expected to grow 169% post-pandemic



‘Need’ buying versus ‘want’ buying

The battle for the consumer’s rand will be fierce this Black Friday. GfK’s Consumer Pulse research indicates that 71 percent of online consumers have seen their household income decrease.

Nearly a third (32%) are experiencing lower expenditure. The news isn’t all bad – 16 percent agreed this is a favourable time to make a big purchase and 10 percent said they plan to make a big purchase for the home.

“Reduced activity – less dining out and scaled back holiday plans, for example – means that some consumers have money to allocate elsewhere,” says Pienaar. “Unlike previous years where much of the Black Friday spending came from people spoiling themselves, we expect consumers to invest in their homes, continuing the trend seen under lockdown earlier this year.”

At this time of economic stress, GfK expects consumers to buy what they actually need, rather than buying to fulfil a want as they might have done before the pandemic. This is fuelling demand in categories such as small and major domestic appliances. As such, the stay-at-home nature of the current crisis presents great opportunities for brands in home-related categories.

Pienaar says: “How, why and what consumers shop this Black Friday is likely to be different in 2020 to previous years. But the massive scale of the event won’t change. The winning brands will be those that enforce and safeguard consumer safety and security, take advantage of their longstanding brand equity, and deliver simple propositions that offer value for money.”

September sales dip

GfK’s Market Intelligence (Point of Sale tracking) data from GfK South Africa’s Weekly Monitor shows a slowdown in the technical goods market, most likely due to a combination of consumers holding back for Black Friday and consumers having caught up on their lockdown-delayed purchases in August. For the month of August 2020, Technical Consumer Goods revenues showed year-on-year growth of 15 percent.

For the month of September, year-on-year growth dropped to just 3 percent. Office equipment and stationery was the overperformer with 49 percent year-on-year growth in September (down from 83% in August), while IT growth fell to 4 percent compared to 47 percent in August. Small domestic appliance revenues dipped from 37 percent in August to 32 percent in September, while major domestic appliances dropped from 24 percent to 11 percent.

Read more on the next page about Cash Crusaders.

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