How much money will be spent in South Africa?


Black Friday marks the start of the festive shopping season. The American tradition has been adopted by several countries, including South Africa. Brick and mortar retailers experienced a “bleak” Black Friday in 2020, on the other hand, it was a record-breaking year for online sales but not enough to offset the total drop in sales.

BLACK FRIDAY SALES TO IMPROVE IN 2021

Economist Mike Schussler said stronger sales are predicted on Black Friday in 2021. This is backed up by insights from Payments clearing house BankservAfrica’s point-of-sale and ATM data, according to BusinessTech. However, it is not expected to reach pre-COVID-19 levels like in 2019.

“With the economy’s better performance compared to 2020, we expect November’s card sales and ATM withdrawals to surpass the previous year’s Black Friday as specials once again run throughout the entire month of November as well as on Black Friday,” said Schussler.

Black Friday retail spending reached R15,4 billion in 2019 and fell to R10,2 billion in 2020. This year, according to research, it is expected to hit R11,3 billion, per SowetanLive.

Professor Carel van Aardt, from Unisa’s Bureau of Market Research, said sales will improve in 2021 because 733 000 new jobs were created between 2020 and 2021, at a media briefing in November. In contrast, 2.1 million people lost their employment between 2019 and 2020.

Van Aardt’s insights were taken from a study that looked at the trends and dangers associated with the spending spree.

The professor said consumers spend for different reasons on Black Friday. “The middle and affluent market buy luxury goods at discounted prices.”

The report pointed out that consumers also participate in the sales because they are bored and pick up goods that they wouldn’t normally buy because they are available at discounted prices. Between 2019 and 2020, more consumers purchased necessities instead of traditional items.

According to a Finder survey, on Black Friday shopping statistics in 2021, an estimated 18,5 million people in South Africa plan to participate in the sale this year – that’s 47 percent of the population. However, it is very important to note that the sample size of the survey was just 1203 people.

The survey suggests that people aged 25 to 34 are more likely to participate in Black Friday; Most people (29%) are shopping because they think the deals are great value, while 7.4 percent are participating simply because they’re bored.

The majority of survey participants that said they do not intend to shop had no specific reason. However, quite a number (13,7%) of consumers believe retailers inflate prices before implementing sales.

South Africa is ranked 16th in the world for Black Friday searches, wedged between Mexico (15) and Austria (17). The United States, Germany and Brazil top the rankings.

“Search volume data from Ahrefs suggests that one of the most popular places to go for Black Friday deals is Game. Other popular retailers searched for include Makro, Takealot and Shoprite.

“In terms of specific products and brands, data suggests that people are looking to bag deals on products like phones and laptops. Popular brands include Huawei, MTN and Vodacom,” according to Finder.

BLEAK BLACK FRIDAY IN 2020

The poor sales on Black Friday last year does not come as a surprise, especially in hindsight. Black Friday in 2020 was on 27 November – less than a fortnight before South Africa officially entered its second wave of COVID-19 infections on 9 December 2020.

Payments clearing house BankservAfrica said the total transaction volumes dropped by 33 percent and the value of sales plunged by 52 percent year-on-year over the Black Friday weekend, per Business Maverick.

The drop was directly related to COVID-19 and the lockdowns related to the pandemic had on the economy, according to Martin Grunewald, the Chief Business Officer at BankservAfrica.

“Our data suggest Covid-19 and the protocols of practising social distancing, combined with the economic impact of the lockdown and the increased interest in online shopping contributed to this.”

On Saturday, 28 November 2020, BankservAfrica said there were 4 967 022 card purchases made in-store (a 30% decline compared to 2019) on Black Friday and online sales reached 868 903 (a 62% increase). The online shoppers’ enthusiasm could not offset the total losses for retailers.

An elated PayFast – the online payment gateway that is now used by many e-commerce platforms in the country – said total online transaction volumes increased by 50 percent, compared to 2019.

“This year’s Black Friday spend surpassed the volumes we’ve seen in previous years. The rapid adoption of e-commerce over the course of 2020 has meant that we’ve seen more people shopping online, especially amid fears of a COVID-19 resurgence,” said Jonathan Smit, the founder of PayFast, last year.

According to PayFast, the highest transaction for the day was R299 950. Only shoppers also spend R1243 on average compared to R803 in 2019.

SMALL BUSINESSES IN LUCK?

 Business Maverick reported that the drop in sales suffered by the major retailers did not extend to smaller businesses, according to data released by Yoco – the local payment provider that makes card machines more accessible to small businesses.

Yoco said smaller businesses saw a 46 percent increase in card transaction volume on Black Friday in 2020 compared to the average volume of card payments processed on a Friday after payday.

“Black Friday weekend is a prolific opportunity to grow, especially for those in the retail industry,” said Yoco co-founder Katlego Maphai.

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Publish date : 2021-11-25 18:04:55

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