During the Black Friday period of 2023, with campaigns spanning multiple sectors, including health and beauty, retail, food and beverage, home improvement, and fashion and clothing, we saw a varied set of trends, writes Graeme Stiles, MD of Algorithm Agency.
Leveraging our Market Share Analysis (MSA) software, we captured detailed data on user behaviour, search patterns, and market trends during Black Friday. Our flagship tool, the MSA enables an in-depth, granular analysis of the market, including a look at how various brands performed and how consumers engaged in the weeks leading up to the event.
Here’s a look at how 2023s Black Friday went:
Organic versus paid traffic: a shift in dynamics
The recent trends in traffic sources have shown a slight increase in organic traffic, while paid traffic exhibited a more significant year-on-year growth. This shift is largely attributed to changes in search engine results pages (SERPs), with a noticeable increase in paid prominence, especially in transactional and commercial terms, influenced by platforms like Google Shopping.
However, it’s noteworthy that organic traffic demonstrated higher revenue generation due to better user intent. This underscores the necessity of a synergised strategy, blending both paid and organic search methods.
The era of operating these channels in isolation has passed; a unified approach is now imperative.
The sustained strength of direct traffic
Direct traffic continues to be a formidable player, often as a secondary or tertiary touchpoint following initial engagements via paid or organic channels. This trend emphasises the importance of brand awareness. Market share and visibility, combined with above-the-line marketing efforts, are crucial for amplifying brand presence.
Social media and e-commerce Integration
Social media, particularly when boosted by paid campaigns, has seen growth as a channel for driving targeted awareness. It remains a vital tool for directing attention to specific audience segments, playing a significant role in the broader marketing mix.
Transaction trends and consumer spending behaviour
Across various sectors, there was a year-on-year increase in the number of transactions.
However, this was coupled with a decrease in average basket size, reflecting the current macroeconomic conditions in South Africa. Consumers are exhibiting cautious spending behaviours, focusing more on cost savings and opting for cheaper brands over premium alternatives.
This shift points to a broader trend of a more frugal consumer mindset, influenced by limited disposable income.
Black Friday insights: a changing landscape
The Black Friday phenomenon has long been a boon for e-commerce, with businesses historically witnessing growing revenue during this period.
However, 2023 marked a deviation from this trend. Despite an increase in transactions, overall revenue across the e-commerce sectors we analysed over the Black Friday period, dropped from R54-million in 2022 to R44-million in 2023. This decline is indicative of the broader economic challenges faced by consumers.
Black Friday 2023 also saw a shift in timing, occurring earlier than usual, on November 24th. This is earlier in the month than in recent years and fell before the typical consumer payday. Retailers adopted varied strategies in response, ranging from early month-long promotions to focused, short-burst campaigns closer to the date.
Extended promotions generally fared better, offering businesses a clearer financial picture throughout the month and engaging a larger audience. However, this approach brought its own set of challenges, particularly in balancing the need for promotions with the preservation of profit margins.
Extended shopping patterns
Black Friday has transcended beyond being just a single-day event. It has become a prolonged retail spike, beginning as early as October and continuing for weeks after the actual day. This extended period highlights strong consumer anticipation for Black Friday, turning it into a 10-week retail moment.
In this extended Black Friday timeline, the shopper’s journey is intricate and multifaceted. It is characterised by abundant information and a plethora of choices online. With that revelation, brands now need to engage with customers throughout this entire period to effectively influence their purchasing decisions.
At Algorithm, we look at the Black Friday period in three distinct phases:
The build-up phase
Starting in early October, consumers begin their Black Friday research. This is a crucial time for e-commerce businesses, as shoppers are open to suggestions and not yet committed to specific products or brands. In the weeks leading up to Black Friday, consumer behaviour is exploratory and broad.
This phase is marked by:
* Early-bird interest: Shoppers start exploring potential deals and discounts. They might search for “when does Black Friday start” or “early Black Friday deals”.
* Broad category searches: Searches are more general, such as “best tech deals” or “Black Friday fashion sales,” rather than specific product queries.
* Newsletter and deal subscriptions: Consumers sign up for newsletters and alerts to get early access to deals.
* Social media influence: Shoppers are influenced by social media trends and influencer recommendations, leading to searches like “top Black Friday picks” or “recommended Black Friday deals by influencers.”
Insight – During this phase, retailers can engage consumers with teaser campaigns, sign-ups for early access to sales, and broad category promotions to build anticipation.
The rush phase
As Black Friday approaches, consumer behaviour becomes more focused and deliberate. This phase is characterised by:
* Specific searches: Consumers transition from browsing to seeking specific items. For example, someone initially searching for “best smartphones” in October might narrow down to “iPhone 13 deals” as Black Friday approaches.
* Brand focus: Shoppers often start comparing different brands rigorously. They might weigh options like Samsung versus Apple in the tech category or Nike versus Adidas in sportswear.
* Comparison shopping: Price comparison becomes crucial. Consumers use tools and websites to compare prices for the same product across different retailers.
* Deal hunting: Shoppers actively look for the best deals, discounts, and bundle offers. Search trends might include queries like “Black Friday electronics deals” or “best Black Friday laptop offers.”
Insight – Retailers can leverage this phase by highlighting specific products, offering competitive pricing, and providing clear comparisons to similar products.
The aftermath phase
Following Black Friday, the consumer focus shifts towards the holiday season. Key aspects of this phase include:
* Gift searches: Searches pivot towards gift-oriented products like toys, games, and fashion accessories. Terms like “best holiday gifts” or “affordable Christmas presents” become common.
* Last-minute deals: Shoppers look for continued sales, hoping to snag deals they might have missed on Black Friday. Retailers often extend their sales to capitalise on this behaviour.
* Online versus in-store shopping: Consumers dynamically switch between online shopping for convenience and in-store visits for immediate purchases, especially for last-minute gifts.
* Return and exchange queries: Post-Black Friday, there’s an increase in searches related to returns, exchanges, and warranties, as consumers reassess their purchases.
Insight – Retailers should focus on extended deals, gift guides, and hassle-free return policies to attract shoppers in this phase.
Our data and insights are obviously very focused on the performance marketing space. We have however had a chance to look at broader data from the payment gateway providers that play a major role in the e-commerce ecosystem.
Looking at this much larger data set we see some supporting trends and insights which add to what we saw in the marketing space. Overall just over a billion Rand in transactions were processed which was around a 12% drop on the previous year. However as with the marketing data the data shows an increase in intent from consumers to purchase online.
Timing-wise both online and physical sales peaked on the 25th of November which was the day after black Friday and closer to the typical payday.
Forward-looking strategies: preparing for the future
As businesses in South Africa reflect on these trends, it becomes evident that adapting to consumer spending habits and strategic timing is essential. Payment solutions like “buy now, pay later” are gaining importance, helping maintain revenue flow even when consumer budgets are tight.
Looking ahead to 2024 and 2025, with Black Friday falling on 29 and 28 November respectively, businesses must continue to evolve their strategies. The lessons learned from the mixed patterns of 2023 will be invaluable in navigating the future, ensuring that e-commerce continues to thrive even amidst burgeoning economic challenges.