Shoppers wanting good deals on Black Friday this year are going be looking for clothes, shoes and essentials, rather than big screen TVs and branded luxury goods.
Creative strategies, an understanding that consumers want multiple ways to make their purchases and want entertaining in-store experiences, are the key things that could turn Black Friday 2023 into a silver bullet for retailers.
This is the finding of a Black Friday research project by the Bureau for Market Research conducted for SA fintech company Capital Connect, that offers retailers solutions to help grow their businesses, as well as quick loans to formal SMMEs.
The aim of the research was to examine how the Black Friday phenomenon has changed over recent years to forecast what is in store this year. As the annual global shopping bonanza looms large, businesses are gearing up for it and consumers are planning their big buys.
While the actual date for Black Friday this year is November 24, it is generally accepted to be November 24-29. While some retailers have declared Black Friday Week, others have spread their deals over an entire month, and economists are now expecting it to “blur” well into the festive season.
The BMR’s Prof Carel van Aardt, who headed the research team, said though the expected R26.6bn extra turnover Black Friday is predicted to attract this year, is far lower than the R42bn boom seen in 2021, when people went all out on spending after a year of being pent up through lockdown, this is less in real terms than the amount that was spent last year.
Steven Heilbron of Capital Connect said while Black Friday was a big opportunity for retailers, it was also an expensive miss for businesses that were not ready to cash in on the opportunity — which he described as an opportunity like any Valentine’s, Easter, Mother’s Day or other event that makes for a customised experience.
Van Aardt said an analysis of consumer behaviour and big data showed there were good reasons to be positive and see Black Friday as a positive opportunity.
There are increased benefits this year. We are seeing load-shedding at lower levels. Last year we underestimated the value of Black Friday. The constant hype saw people buying into the idea and taking out credit ahead of time for it.
— Prof Carel van Aardt of Bureau for Market Research
“There are increased benefits this year. We are seeing load-shedding at lower levels. Last year we underestimated the value of Black Friday. The constant hype saw people buying into the idea and taking out credit ahead of time for it. This year we are going to see Black Friday feed into the festive season, and there is a mixed bag of views on this, but with the knock-on effect there’s good reason to believe that spending could go as high as R67bn,” Van Aardt said.
“Economic growth appears slightly better with some job creation. But there are a lot of downside risks. In the short term this could be an upwards blip, with the downside being a catch-up in 2024.”
Predictions are that the big winners of the Black Friday boom will be retailers that offer a “diverse omnichannel” — those who offer online deals, a pleasant in-store experience, e-commerce services, click-and-collect and a delivery function.
“One of the things we have seen emerging is the online delivery service that is being taken up by overseas relatives of family members living here. Consumers in England, Australia and Canada are happy to make an order and have a delivery of groceries dropped off for their parents,” Van Aardt said.
This, Heilbron agreed, fitted in with the notion that while Black Friday had started out at as a huge shopping opportunity to score “big box items”, described as high-end appliances, luxury goods and designer brands, it was now focused on “stocking up on essentials and ordinary stuff”.
Luxury branded goods were no longer the focus as consumers now wanted clothing, linen, footwear, with the huge sellers predicted to be items such as milk, chicken, oil and toilet paper.
According to Van Aardt, the “winners” or categories expected to make a profit on Black Friday sales were textiles, general groceries, household furniture and hardware. The “losers” were identified as “food, beverages and tobacco” and pharmaceutical goods.
This, he said, was because eating and drinking out were luxuries that could be cut, and pharmaceutical businesses that would lose out were small specialist pharmacies rather than the big chains that had diversified to include health foods, household grocery items, cleaning products, toiletries and other offerings.
He said while retailers could benefit from online shopping offerings, loyalty programmes and delivery services, there was also huge benefit in focusing on “shoppertainment”.
This, he said, was an improved pleasant experience in stores which include things like tastings, giveaways and other “fun” promotions.
“Extreme examples are those ideas that create massive excitement. One store in Vienna offered a free trolley run at the end of winter for the first person to arrive at the store naked. That one drew customers from all over the world,” he said, adding that big outlets like Hamleys in London which had giant train sets, big play areas and cold drinks for children, made for a hugely impactful experience that would draw crowds.
While the data and predictions are available, retailers have yet to reveal their strategies. It will ultimately be up to cash-strapped consumers hit by fuel price increases, high interest rates and load-shedding schedules as to whether Black Friday gets their support.
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