Ready for the Black Friday rush

Black Friday sales could exceed those at Christmas this year, if sufficient products are available and retailers’ supply chains are operating at full force.

That’s the view of Nicolet Pienaar, head of SA market insights at GfK, an international research house that collects point-of-sale data from retailers.

"In certain product categories, like TVs, laptops, washing machines, fridges and loudspeakers, November monthly sales have already overtaken Christmas sales," she says.

But much will depend on product supply. The Covid-19 pandemic brought global supply chains to a halt, affecting stock levels in SA. "Stock is becoming an issue in the technical consumer goods market," Pienaar says. But if retailers are able to ensure sufficient volumes of product are on hand, "Black Friday will perform well".

The Black Friday sale — falling on November 27 this year — has become big business in SA. According to automated clearing house BankservAfrica, the transactions it processed in-store and online last Black Friday amounted to a spend of R6bn — up 106%, from R2.9bn in 2018. The number of transactions it processed was also up, from 5.2-million in 2018 to just over 7-million last year.

This remarkable one-day spend is fuelled by the huge promotions retailers offer during the Black Friday promotional period — and the notion of saving this has introduced to the market.

"We need to remember that we’re being taught to look out for Black Friday — we’re very much trained in promotional behaviour," says Pienaar, adding that over the past three years the event has grown substantially in SA.

Rand Merchant Bank retail sector head Debbie Law says: "Traditionally, Black Friday has been associated with lower prices, which may encourage the constrained customer to do festive season shopping around Black Friday, rather than wait for December sales."

Sanlam equity analyst Daniel Masvosvere also points to the likelihood of some "Christmas rands" being pulled forward to Black Friday. That will put pressure on Christmas sales — as it did last year. But the pressure this year will be "compounded by the effect of job losses and salary cuts on household incomes", he says.

In an effort to make the most of the Black Friday hype, retailers have changed the way they approach the event over the years. Last year, for example, instead of limiting specials to Black Friday, a number of retailers offered a week of discounts on tech products leading up to the big sale.

This year, given additional financial pressures, some retailers are stretching their promotions over a longer period. Some, says Law, already started offering discounts of 30% from the start of November.

"In the past, with the exception of one or two subsectors, we saw a relatively even split between Black Friday and festive-season sales," she says. "But it’s more than likely to be different this year. Retailers have been luring consumers since the beginning of the month, trying to capture as much of the consumer’s wallet as possible."

For Pick n Pay marketing retail executive John Bradshaw, this year’s Black Friday may be the biggest yet for the company.

The retailer has stocked up on the everyday essentials that customers usually buy in bulk on Black Friday, but it’s also offering deals on appliances and technology. And it has started early.

"Our Black Friday deals are now [running] over two weeks," says Bradshaw, "and we have incredible new and exclusive offers online too."

As with everything in 2020, Covid will affect the Black Friday landscape. For one, there’s likely to be much greater uptake of online offerings.

According to Law, the Covid-induced national lockdown introduced more people to online shopping in the past six months than was the case in the past few years. As a result, "retailers are investing significantly in upgrading their online platforms or establishing them for those who didn’t have this channel in place", she says.

But there’s also the safety factor: online shopping has become increasingly popular among those who would prefer not to venture out into crowds.

It has led retailers to do things differently.

For example, the online click-and-collect service offered by Massmart — owner of Makro and Game — has proved to be particularly popular, says Brian Leroni, senior vice-president for corporate affairs at the group.

Massmart is launching online deals each day, from Monday to Friday, ahead of Black Friday, and Leroni says customers are ordering and paying for the most popular deals online, and then collecting them in store.

"We typically find that our customers shop for additional products when they go to the store to collect their online purchase," he says.

Liz Hillock, head of online and mobile at Woolworths, expects Covid to affect foot count in malls and stores over Black Friday, as more customers opt for online shopping to avoid the queues and the risk of infection.

Woolworths has taken this into account, says Hillock, and is encouraging its customers to shop online and have purchases delivered to their homes. The group has also already started Black Friday specials, and is expanding its online capabilities in expectation of its biggest-ever online shopping season.

"We will have a strong online offering and we’re currently scaling our operations in preparation for the rush," says Hillock. "For example, we’re adding more pickers, couriers and [delivery] slots, to ensure that you can shop for all your favourite items online."

But as retailers around SA prepare to make up for sales they lost during the hard lockdown in April, Pienaar warns that they should expect their customers to be more discerning than in the past.

Research by GfK shows that Covid has changed consumer sentiment. Where shoppers were previously likely to treat themselves with relative ease, they are now more inclined to buy goods that will be useful in the home, that can be used by the entire family and that will make a lockdown lifestyle more comfortable.

People have become more conscious about value for money and their definition of what they see as luxury items, says Law, and they’re re-evaluating what is essential.

So while big-ticket items and the basics remain popular, Law says there’s been a slight shift in tech devices, "which can be used for work from home, school from home and home entertainment".

In the more home-centred Covid world, smartphones and laptops are now "deemed worth spending a little more on".

Massmart’s Makro and Game remain the go-to stores for big-ticket appliances in bricks-and-mortar shops. Massmart research shows that the two chains are SA’s most popular shopping destinations for such items. Leroni says this is driven by customer perceptions of the deep discounts the group offers on, for example, electronics and household appliances.

This Black Friday, the group estimates that it will generate well over R100m in savings for its customers in just its electronics and appliances deals.

Massmart had already started researching and planning its approach to Black Friday in January — just five weeks after Black Friday 2019 had wrapped up. But that was before Covid struck. Now, despite the supply chain disruptions, Leroni says the group has been able to secure sufficient stock for Black Friday.

Still, as Masvosvere points out, there are only so many rands to go around. "Whichever way you look at it, it will be a tough period for the retailers to manage through: they have to get the promotional mix right and ensure that stock levels going into the period match realised demand — a task that’s easier said than done."

Singles’ Day: Doubling bargains

Jack Ma, cofounder of Chinese online retail giant Alibaba, started his Singles’ Day promotion on November 11 2009. In doing so, he successfully commercialised the unofficial Chinese holiday, previously called Bachelors’ Day. In celebrating people who are not in relationships, the annual November 11 event has become something of an antidote to Valentine’s Day.

Today, Singles’ Day sales exceed those of Black Friday and Cyber Monday combined, making it the world’s single-largest shopping event. This year, sales totalled $74bn — nearly double last year’s record $38.3bn.

Local retailers are starting to get in on the Singles’ Day action. Online retailer OneDayOnly, for example, more than doubled its usual Wednesday intake last week, says spokesperson Matthew Leighton.

A slick, cheeky marketing campaign — a gas hob, for example, carrying the tag, “My plate or yours”, a chair tagged “office romance” and a large handbag marketed with the tagline “staying the night” — ensured keen uptake.

But the company still expects the lure of Black Friday to be stronger. Leighton believes it has the potential this year to be bigger than Christmas in SA, as many people prefer to shop ahead to cash in on early, good deals.

This year, OneDayOnly plans to attract shoppers by giving away items for free at random points on Black Friday, with discounts running through the week (with a focus on tech items and gaming).

“This guarantees we can offer the biggest savings in the country,” says Leighton. “You can’t beat 100% off.”