Black Friday sales disappoint, but retailers can still score with holiday shopping

08 December 2018 11:00 AM

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Black Friday sales disappoint, but retailers can still score with holiday shopping

Consumers can expect more discounting by retailers leading up to the festive season, with the Saturday before Christmas and Christmas Day itself being big sales days for retailers.

This is according to Higor Torchia, country manager for the Europe, Middle East and Africa region of retail software management company Vend, explaining some of the sales data collected over the Black Friday shopping period in the last weekend of November.

The statistics were collected from Vend's database of over 500 retailers in South Africa.

According to the data, even though discounting grew by 5% from the previous year, sales volumes decreased by 2%, and in-store retail spend over the shopping period declined by 10%.

This year, the average discount offered by retailers on the Vend data base was 20%.

Speaking to Fin24 by phone, Torchia explained that the drop was linked to changing consumer behaviour. Consumers are now opting to compare retail discounts online all at once, as opposed to walking from store to store.

Consumers are also looking for "bigger discounts", and often gravitate to bigger stores because their discounts are larger than those of smaller businesses.

"Bigger companies, bigger stores and chains can offer larger discounts compared to smaller retailers," Torchia said.

The data also showed that Pretoria was the only city reflecting growth from the previous year, with sales growth of 20%. Torchia said many factors could have contributed to this – including Pretoria's population growth and higher household income.

Even though sales levels for Black Friday were underwhelming, Torchia noted that sales still spiked on the day. The shopping period (24 to 27 November) saw spending increase by 20% compared to previous weeks. Sales in Pretoria spiked 19%, sales in Cape Town increased 13% and sales in Johannesburg increased 10%.

Asked about the other trends Black Friday revealed in consumer behaviour, Torchia said it showed that "consumers are looking for better and better."

Consumers are not just looking for discounts, they are also looking for "better experiences", Torchia said.

Retailers need to consider what different experience they can offer consumers. For example, a beauty shop could offer a free beauty consultation. Experience is also linked to loyalty programmes offered to consumers, he explained.

Black Friday is a marketing effort for retailers to get feet through the door, particularly to be "top of mind" for consumers to return for "Christmas shopping," he explained.

Although not as large as the Black Friday discounts, retailers would be offering discounting in December, Torchia said.

"The Saturday before Christmas going to be a big sales day," he said. Retailers will be offering discounts to boost sales. "Christmas is the biggest day for sales for retailers for the whole year," he added.

Torchia emphasised that discounts will be lower, but the increased sales could hopefully boost profits.

He also noted that many retailers will be competing for the same consumers, and that discounting is not enough. Consumers will be looking for a good experience.

"Experience matters most," Torchia said. Discounting can attract consumers, but retailers need to offer a level of service which would get consumers returning to stores.

Source: fin24.com

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