A disappointing Black Friday for in-store retailers
By Lynette Dicey - Dec 20th 2018, 10:54
Most retailers had high expectations of bumper sales on Black Friday, November 23, but data from retail management platform Vend shows that that in-store retail spending decreased from 2017 with a 10% drop in spending and a 2% drop in sales volumes.
On the upside, major centres showed positive sales growth, with Pretoria jumping by 19% compared to the weeks before Black Friday, Cape Town showing a 13% increase in sales and Joburg a 10% increase. Pretoria was the only city centre to show year-on-year growth, equating to 20% more than 2017.
Vend’s figures show that the 10% drop in spending took place despite the fact that retailers were offering a 5% increase in discounts compared to 2017, with the average discount offered by stores as high as 20%.
Higor Torchia, Vend’s country manager for Europe, the Middle East and Africa, says that despite reports that shoppers were eagerly seeking Black Friday discounts, data shows that Black Friday 2018 fell short of expectations, even taking into account that Black Friday continues to show an uptake in sales on the retail sector’s calendar. Analysis of the period between November 24 and 27 2018 shows that consumer spend increased by 20% in comparison to previous weeks, with discounting levels spiking by 113%.
Torchia says part of the reason for Black Friday’s disappointing in-store performance could have been that because most stores (both physical and online) were offering discounts from Black Friday to Cyber Monday, consumers were shopping online more.
This view is supported by online retailer Zando, which reported a record high on Black Friday 2018. More and more South Africans are seeing the benefits of shopping on their phones – something Zando sees as Black Friday’s secret weapon.
Early sales results indicated that mobile orders dominated purchases over the sale period, which included the days leading up to Black Friday as well as over the weekend until Cyber Monday. Zando reports that 55% of orders were made via smartphone and that 67% of total orders came from mobile by the end of Black Friday, an increase of 52% from 2017.
Insights gleaned over the period by the online retailer show that consumers appreciate the variety of goods available, buying from different brands and categories including beauty, apparel and sportswear, with the top-selling categories being sneakers, women’s wear and shoes.
Another reason Vend cites for the Black Friday flop is that perhaps consumers were focusing largely on deals from big-box retail stores, even though, as its data shows, smaller, independent retailers were offering equally phenomenal discounts over the weekend from Black Friday to Cyber Monday. This data relates to fashion, health and beauty stores in particular (which align with Zando’s bestsellers). These stores boosted their discount levels by around 500%, Vend says, adding that it would be a coup in future if consumers would support these smaller stores, apart from their purchases from major retailers.
Vend’s statistics show that the fashion and apparel category offered a 445% discounting increase and showed a 107% increase in sales over the Black Friday period, compared to previous weeks, while health and beauty offered a discounting increase of 630% and a sales increase of 37%. Sports, hobbies and toys offered discounting increases of 307%, while sales jumped by 37%, and the home, lifestyle and gifts category offered a 315% rise in discount, with only a 9% increase in sales.
Vend’s data also shows some interesting trends across payment patterns, noting that this Black Friday there was a significant increase in consumers who made their purchases using a credit card compared to last year, though cash remained dominant, with 53% of sales taken in cash and 45% by credit card. In 2017, 58% of sales were taken in cash and 36% on credit – telling, perhaps, that after a difficult year for consumers, many people chose to take advantage of special offers on credit.
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