As Black Friday approaches, Africa’s first card-linked instalment platform, Float, expects more than a 500% increase on the number of transactions processed last year, and predicts average shopper spend will increase by 30% to over R11 000.
Last year, Black Friday weekend made up 32% of Float’s November transaction values, with a 353% increase on the same period in October. “Over that weekend, including Cyber Monday, the average shopper spent R8 406, and the biggest order was for R49 800 at a furniture merchant. Just before Black Friday, we saw a R114 800 transaction from one of our merchant partners in the fitness space,” says Float CEO, Alex Forsyth-Thompson.
Twenty percent of orders from Black Friday/Cyber Monday 2022 were placed between midnight and 1am on Black Friday morning – and 60% of shoppers were men.
Top selling categories last year were Furniture and Homeware (34% – half of which was mattresses and beds), Home Appliances (23%), Music and Sound (13%) followed by Sports and Outdoors (13%), Electronics (9%) and Jewellery (8%). Forsyth-Thompson said these trends looked set to change slightly, due to the introduction of new merchants.
“We’re anticipating an increase in electronics as well as big-ticket sports gear, like golf clubs and electric bikes, thanks to new partnerships with brands like iStore, Samsung, Cycle Lab and the Pro Shop.”
“Sales on backup power solutions correlate highly with the level of loadshedding currently happening, so it all depends on what Eskom does in November. Nonetheless, we expect people to flock to partners like Energy Independence, and other players like Huawei, Technomobi and Rugged SA who’ve expanded their offerings.”
As shoppers scan for deals on big-ticket items they have long lusted over, they should factor in the potential of the South African Reserve Bank’s Monetary Policy Committee to raise the interest rate at their meeting, which is due to be held just three days prior to Black Friday.
Float’s card-linked instalment platform is unique from the traditional Buy Now, Pay Later (BNPL) model in that it does not issue shoppers with new credit. Instead, Float promotes responsible usage of existing credit cards by helping shoppers to split credit card purchases in up to 24 interest-free monthly instalments. While the purpose of traditional BNPL is to drive transaction volumes away from credit cards, Float has expanded the BNPL market to serve more than 6.5m credit cards across South Africa.
“We expect the trend towards e-commerce to continue over Black Friday weekend. Combined with the drastically increased cost of living, we expect to see an increased shift towards instalment options like Float – especially from shoppers that had not previously considered this necessary. The ability to split purchases into more manageable, monthly payments is a critical tool for merchants to win in this economic environment.
“Offering interest-free instalments gives shoppers the flexibility to spread their payments over several paycheques – in Float’s case, this is an average of four or five paycheques. Because Float’s card-linked instalment model works exclusively within the available limit of existing credit cards, consumers are not pushed into over-indebtedness. The solution is designed to help with cash flow management and to promote truly responsible credit-based spending – especially during the festive season,” Forsyth-Thompson says.