By: Nicola Mawson
While consumers are set to spend more over Black November – which is what Black Friday and Cyber Monday seem to have become – they will be focusing more on items such as food and clothing, which isn’t surprising given the economic environment.
In fact, consumers are jumping into deals early this year, if Experian’s predictions are anything to go by.
Based on 2023 trends, it said “the early holiday shopping trend will continue to become more pronounced. Many consumers now begin their end-of-year shopping well before Halloween, seeking to take advantage of early deals and discounts, enjoy more time to compare prices and products, avoid crowds, secure popular items early, and spread out their budget.”
Pointing to 2023 data from Gallup, it said that one in four-holiday shoppers even start filling trolleys, virtual or steel, as early as September.
Research from the Bureau of Market Research (BMR) and commissioned by Capital Connect found that the wholesale, retail, and fuel sectors should generate more than R88 billion in additional economic value over this month as consumers become more interested in Black Friday. In fact, interest in the flash sale season will be 31% higher than in 2023, the research showed.
“The positive outlook for Black Friday 2024 indicates that the tide is turning for South African retailers after a long period of economic and retail stagnation,” said Steven Heilbron, CEO of Capital Connect, part of Nasdaq and JSE-listed Lesaka Technologies.
A combination of factors is driving anticipated increased Black Friday (and Black November) sales, which will be a bigger event than previously. These, Absa said, include the recent 25 basis points decrease in interest rates.
“The implementation of the Two-Pot system is also expected to boost consumer sentiment. Additionally, the month-long discounts trend offered by merchants, stretching Black Friday into ‘Black November’, allows for increased sales and for budget-conscious shoppers to benefit from extended deals,” the red bank said.
Yet, South Africans are focusing their spending on essentials, and not luxuries this year. The winners when it comes to consumer spending, BMR said, will be those retailers that sell groceries such as fruit and vegetables, meat and poultry, dairy products, beverages, as well as canned food. Following that, clothing, footwear, and accessory outlets will benefit from increased sales.
Absa’s research seems to concur as to where spending during this highly anticipated retail event will go. “Generally, we expect consumers to prioritise essentials, including groceries, health and beauty, baby care, and clothing purchases, while the improved consumer environment may also support some growth in higher-value discretionary spend.”
In contrast, FNB expects more travel sales, which is also a shift away from the traditional electronics and household items that traditionally dominate Black Friday sales.
Globally, Queue pulled together research that indicates that websites offering electronics, clothing and accessories, health and beauty, and then food and drug items received the most visits, in that order, last year.
It also noted that the top destinations for Cyber Week (starting on December 2 when it’s Cyber Monday) shoppers in 2023 were various:
- Online (44%)
- In grocery stores and supermarkets (42%)
- In department stores (40%)
- In clothing and accessories stores (36%)
- In electronics stores (29%)
Ashley Saffy, Head of Spend & Customer Value Management at FNB Card, who concurred that sales will be increasing, said that consumers are moving to paying for items through digital means instead of using cards. “Digital wallet use is projected to surge by over 40% year-on-year, reflecting the broader trend of digital adoption among consumers.”
She added that “online sales are expected to grow by more than 10%, indicating the increasing preference towards e-commerce platforms. Conversely, traditional in-store sales and cash usage are expected to decline.”
Absa, too, predicts a focus on increased digital payments and continued growth in e-commerce, which have shown steady increases in the past years.
At the same time, Absa has seen consumers cautiously approaching the acquisition of new credit. “We are seeing a 5-7% growth in credit card sales year-on-year. We have also noticed approximate growth of 15% year-on-year with regards to applications for increases in credit limits.”
On October 25, FNB Merchant Services processed 18.4 million transactions, around R400 000 more than last year. “This early indicator has led to a positive outlook with estimates of 19.5 million transactions are expected to be processed by FNB Merchant Services this Black Friday,” Saffy said.
“The participation of in-store and online retailers and the types of offers they put in front of customers will always be a large driver of the excitement for deals and the growth in the value and volume of transactions,” the Red Bank said.
Capital Connect splits the sector-related gains as increasing as follows:
- General dealers such as supermarkets: R10.5bn
- Textiles, clothing and footwear retailers: R5.6bn
- Household furniture, appliances, and equipment retailers: R1.8bn
- Hardware, paint, and glass stores: R1.5bn
- Food, beverages, and tobacco in specialised stores: R278 million
- Pharmaceutical and medical goods stores: No significant gains.
- All other retailers: R2.4bn (Those that do not fall into any one strict sub-category, i.e. second-hand stores)
Online shopping tips:
- Remain vigilant when making transactions to mitigate the chances of falling victim to fraud
- Never share one-time passwords (OTPs), device passcode, PINs, or CVV numbers
- Keep card and PIN details safe as with all other sensitive personal information
- Use credit responsibly
- If it’s too good to be true, it’s probably a scam.
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