While pre-Covid-19 e-commerce played on the periphery of retail in South Africa, BankServ figures show online sales surging 62% year-on-year (YoY) on Black Friday as virus-wary South Africans shunned in-store shopping.
On the other hand, brick-and-mortar sales figures saw a 30% YoY decrease as South Africans took to their laptops, tablets, and mobile phones, in search of a good deal.
This marked move in Black Friday shopping behaviour signals a major turning point for the South African e-commerce landscape.
Paul Behrmann, CEO of part-payment platform Payflex, says this massive shift away from the crowds, chaos, and long lines characterising previous Black Fridays was inevitable given concerns over social distancing and contracting the virus. “However, the sheer rise in numbers reflects a more long-term consumer behavioural shift to the convenience and speed associated with online retail.”
Behrmann outlines five key takeaways from this year’s Black Friday.
Burning the midnight oil
Shopping activity started to increase a few days before Black Friday, intensifying as soon as the clock struck 12 am on Thursday night.
This continued from midnight on Thursday night right through to 6am on Friday morning, with Payflex processing the number of transactions of a regular full day within the first six hours of Black Friday.
People were online and shopping from the get-go, long before they even started their work day. We saw spikes in activity between 1am and 3am in the morning.
Covid-19 erodes overall sales
Despite the phenomenal growth in online retail this year, Black Friday 2020 still represents an overall drop in sales figures with various factors contributing to the subdued year-on-year sales.
This overall decline makes sense from a macroeconomic point of view.
One of the key issues has got to do with stock or rather, reduced stock because companies weren’t able to import sufficient amounts of products due to Covid-19 restrictions.
The exchange rate also played an instrumental role, with retailers unable to forecast what the selling price would be.
Online growth increases
The Payflex platform experienced substantial year-on-year growth in November, supported by hundreds of new merchants added in 2020 and the shift to online sales.
Surprisingly, the biggest seller across the board was socks.
In terms of categories, the top five were fashion; tech; home; cellular; and beauty.
The figures speak for themselves. Businesses have to move online and go digital in order to reap the reward of sales.
South African shoppers’ promo FOMO
Consumers are still teetering on a financially fragile tightrope. TransUnion estimates the national household bank debt as 85% of disposable income, with the increase in use of credit cards indicating budget stress.
A Nielsen study has also found that South Africans have had to adjust their promotion obsessed purchasing habits during the Covid-19 lockdown, with R14-billion fewer goods being sold on promotion during April and May 2020 compared to the same time last year.
This has led to a perception of price increases largely due to a reduction in promotions with an average of 64% of offline and online shoppers saying that prices are going up and 33% saying less promotions are available, according to the study.
“This heightened attention to price has moved South Africans to search harder and longer for bargains, which in turn fuelled the demand for online Black Friday discounted deals,” says Behrmann.
A reshaped retail landscape
The pandemic has permanently transformed the South African retail sector with Black Friday 2020 statistics further entrenching consumer adoption of online shopping.
It is clear that the global response to this virus has fundamentally changed the retail playing ground. The shift from offline to online has become second nature for consumers. And even as social-distancing rules ease, this trend will consolidate.
Retailers have to adapt and evolve alongside the online arena, especially if they want to remain relevant, overcome challenges, and capitalise on new opportunities in the next normal.