Black Friday, once a uniquely American event, has become a major sales boost for South African retailers ahead of Christmas. The Bureau of Market Research predicted that consumer spending would increase by R7 billion compared to the previous year. But did it happen?
Not according to TechCentral. Describing Black Friday as a damp squib, the technology news website reported that, according to experts, consumer spending was muted.
Ozow, a fintech company offering online payment services for businesses and consumers, reported a slight decrease in Black Friday sales volumes this year compared to 2022.
First National Bank’s head of customer value management, Ashley Saffy, reported stable transaction numbers on FNB cards during Black Friday (24 November) compared to 2022. However, Saffy said there had been a noteworthy 9.7% growth in transactions over the following Saturday and Sunday. Despite this, overall values and volumes were lower than in 2022, with a 4.6% decline in total transaction value.
Brick-and-mortar transactions saw a 4.8% decrease, while e-commerce transactions decreased by 1.8%. The volume of e-commerce transactions also dropped by 6%, FNB stated.
Absa told TechCentral that card transactions had been “flat”, with a drop of R62 in the average cost per basket (R520) compared to last year (R582). However, the multinational banking and financial services conglomerate did see a 20% volume growth in e-commerce purchases among its clients.
Payfast, a leading online payment platform, also reported a drop in the average basket size, from R1 689 per basket in 2022 to R1 364 this year.
On the flip side, online card authentication service BankservAfrica said its data showed that online shopping volumes on Black Friday reached 1.4 million, a 17% improvement on 1.2 million in 2022. Total transaction values amounted to R1.39bn, a 39% growth on the R1bn in 2022.
Discovery Bank said clients on average spent 10% more on Black Friday compared with last year, while online retailer Takealot said it had “yet another record-breaking” Black Friday, with an increase of 65% in sales by unit since last year’s Blue Dot Sale.
According to Anton Hugo, PwC South Africa’s retail and consumer industry leader, the net impact of Black Friday on retail income is challenging to calculate accurately because of some shift in holiday spending from December to November.
“Nonetheless, South African retailers have increasingly designed the shopping holiday to focus on a Black November period, providing a larger volume of smaller sales during the month, rather than solely on the four-day Black Friday/Cyber Monday weekend,” said Hugo.
Although the verdict is still out on whether Black Friday was a major payday for retailers, some key shopping trends have surfaced, showcasing the changing habits of consumers.
Online surges, but in-store still dominates
Discovery Bank reported that its clients were following the global trend to shop more in stores, with 80% of Black Friday purchases made in-store in 2023 compared with 75% in 2022.
However, the average transaction value of online purchases was double that of in-store purchases and increased by 18% in value from 2022. The average value for in-store purchases decreased by 5% from last year.
Capitec says although online shopping is rapidly growing in popularity among its clients, it still represents less than 10% of the total spending value on its platforms.
Despite this, the bank said it was witnessing a significant shift towards digital shopping, with the volume of transactions on its banking app having increased by more than 40% compared to last Black Friday. Increased activity on platforms such as Checkers Sixty60 and Takealot accounted for more than 10% of total Black Friday spending, the bank stated.
According to Payfast’s managing director, Brendon Williamson, Black Friday has shifted predominantly towards online shopping, with numerous retailers offering exclusive online discounts.
“This transition offers consumers a more deliberate and curated shopping experience. Yet, as Black Friday becomes more commonplace, we might see merchants extending their sales period through to the festive season. This aims to attract a broader range of buyers and manage the surplus stock from Black Friday,” said Williamson.
PwC’s Global Consumer Insights Survey Pulse 6 found that growth in online shopping was driven by its ability to enhance the phygital (physical plus digital) shopping experience. According to the survey, South African consumers enjoy deeper relationships with their favourite retailers and brands by reducing frustrating, high-friction interactions. Online channels also allow retailers to connect with consumers higher up the purchasing process – before they have decided to purchase – in an effort to influence the outcome.
The survey also found that South African shoppers increased their online shopping this year as load-shedding had an impact on their traditional shopping options.
Ongoing move from cash to digital payments
Other statistics indicated a steady transition towards digital and card-based payments.
According to Capitec, despite substantial cash transaction volumes, with clients withdrawing R4.47bn from Capitec ATMs on Black Friday, and cash-based spending mainly driven by trade in the informal market, digital transactions are surpassing cash transactions “by a significant margin”.
Francois Viviers, group executive of marketing and communications at Capitec, said card usage surged during this period, with more than 87 million transactions recorded over the weekend. Moreover, there were nearly 300 million interactions on the Capitec app, marking a substantial increase from the 2022 Black Friday’s 188 million app interactions.
Payfast reported an uptake in QR code payments, with the volume of payments made using solutions such as Zapper increasing by 63%, compared to 2022. Scan to Pay-facilitated payments also increased by 44%.
“This highlights a key trend towards quicker and more convenient payments, that facilitate a seamless checkout experience,” said Williamson.
Discovery Bank clients embraced paying with smartphone and wearable devices linked to digital wallets such as Apple Pay and Samsung Pay. Discovery Bank stated that more than a third of in-store payments had been made with a smartphone or wearable device.
Shoppers prioritise essentials, favouring food and groceries
Payfast’s data showed that retailers with general merchandise or convenience food stores, family clothing stores, and discount stores came out on top as people stocked up on essentials and treats alike, with men’s and women’s clothing stores coming in close behind.
Williamson said experienced Black Friday enthusiasts now approach the day with a meticulously crafted strategy, pre-selecting desired products and leveraging price reductions weeks before the retail event kicks off.
“With access to platforms that monitor item products over time, shoppers can gain valuable insights into price fluctuations throughout the year and gauge whether their wish-listed products really are at a good price. It’s no longer just about shopping – it’s a strategic approach,” said Williamson.
Food and essential items were also top of the list for Discovery Bank clients.
Akash Dowra, chief growth officer of Discovery Bank, said a trend identified in an earlier Discovery Bank SpendTrend23 report was that people were spending more money on food and essential items.
“This was also the case on Black Friday, with the majority of spend being on essentials items like groceries and health products, followed by home purchases,” said Dowra.
The trend towards purchasing groceries and essentials over electronics and luxury items was also noted by Capitec.
According to the bank, retail giants such as Shoprite and Checkers, Pick n Pay, and Spar dominated consumer spending over Black Friday weekend, with clients collectively making over 4.1 million transactions, spending more than R1.7bn, of which Shoprite and Checkers made up approximately half of the spend.
Viviers added: “Despite rising living costs and interest rate hikes, Capitec clients maintained similar spending patterns to the previous year, with data suggesting that clients chose grocery deals at retailers to counter food inflation this year.”
