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Black Friday: Online shopping grows as in-store sales dwindle

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 29 Nov 2023
The highest single transaction processed by Bankserve Africa amounted to R113 000.
The highest single transaction processed by Bankserve Africa amounted to R113 000.

This year’s Black Friday period showed more South Africans focused on filling their online shopping carts, with e-commerce showing positive year-on-year growth, while brick-and-mortar sales declined.

This is according to BankservAfrica’s data, which tracked shopping payment levels across its local bank members during the Black Friday weekend.

As the largest automated payments clearing house in Africa, the organisation clears and processes billions of low-value card, ATM, EFT and card-not-present transactions annually across its banking ecosystem.

According to its data, while this year’s overall Black Friday shopping trends show a slight downturn from 2022, e-commerce shopping levels remained relatively high, with activity increasing by the hour, while in-store shopping was slower.

Getting a head start on the online bumper Black Friday specials, South Africans began shopping at midnight, with 30 770 transactions tracked in the first hour – showing a 4% annual increase from the same period last year, it says.

After slowing down following this rush, online sales picked up again and peaked between 10am and 11am on Friday, with 93 814 transactions recorded during the hour.

The final hour of Black Friday reflected the strongest hourly year-on-year online growth of 37%, with 34 157 transactions.

“In-store shopping was slightly down from last year's levels compared to online, which delivered again, as merchants upped their Black Friday promotions and attracted interest from eager consumers,” says Shergeran Naidoo, BankservAfrica head of stakeholder engagements.

“BankservAfrica’s online card authentication service recorded a Black Friday total of 1.4 million transactions, to the value of R1.39 billion. This represents an 11% growth on the 1.2 million transaction volumes and 29% improvement on the R1 billion registered in 2022.”

According to Naidoo, the total volume of in-store card transactions amounted to 5.9 million, declining by 6% compared to 6.3 million in 2022. The total value of transactions amounted to R3.1 billion, declining by 21% year-on-year from the R3.9 billion recorded last year.

The highest single transaction value by card, according to Bankserve Africa data, amounted to R113 000 at a luxury jewellery boutique, while the highest number of swipes by a single cardholder was 644, compared to 827 in 2022.

The e-commerce sector, which currently contributes less than 5% of overall retail sales in SA, was predicted by the Bureau of Market Research to make a higher-than-normal contribution to overall retail during the 2023 Black Friday period.

Shergeran Naidoo, BankservAfrica head of stakeholder engagements.
Shergeran Naidoo, BankservAfrica head of stakeholder engagements.

BankservAfrica says consumers stocked up on well-priced grocery goods, with spending at supermarkets in the lead, followed by department stores.

It does not process interbank card transactions for all of the local banks – which means its data is only a representation of its member banks, comprising SA’s big-four banks, as well as banks belonging to the Dandyshelf Group, which include Capitec, CitiBank and Investec Bank.

Stephen Smith, marketing director of Zapper, says the company saw twice the average daily value processed and 30% more payments on Black Friday. “For the rest of the weekend, a 20% to 30% increase in value was processed and 10% more payments.”

Zapper is a fintech firm that has integrated its payment technology with a growing number of mobile apps, online sites and merchants’ electronic points-of-sale.

When comparing the ratio of online transactions to in-store transactions across Zapper’s ecosystem, Smith points out there was a 75:25 ratio, with most of the Black Friday weekend payments from online channels.

The spike in volumes on online channels versus physical channels is an indication of positive growth in SA’s online shopping industry, he notes.

The highest transaction on Zapper was R129 999, conducted via Samsung Online's Website, and the highest number of transactions made by a single consumer was 17, made on OneDayOnly's Website.

“Black Friday 2023's transactional value was actually 5.5% lower than 2022; however, the entire Black Friday weekend was 6% higher than the previous year. Cyber Monday was 20% higher this year than 2022. The hype of Black Friday has potentially decreased, with offers available for weeks prior and after, extending to the whole month of November.”

Brendon Williamson, MD of online payments provider Payfast, says this year’s Black Friday saw more online shoppers in SA than last year, but the growth was not as significant as previous years, such as during the lockdown period.

“There are two main reasons for this: firstly, the economic downturn, and secondly, the normalisation of Black Friday. In previous years, Black Friday was a novel event, where a lower base of online shoppers actually came online to shop the sales.

“We saw large increases in volume over Black Friday and as expected, as e-commerce grows, the large increases in online shoppers normalised and wasn’t as significant,” explains Williamson.

Payfast reported a record-high Black Friday payment, with one individual spending R627 000 in one transaction for a travel package. The average basket size of R1 364 was lower than in 2022, which recorded an average of R1 689 per basket.

“We are seeing more locals looking to avoid the in-store rush, and opting for online shopping. For first-time buyers, there is often the added benefit of being rewarded with additional discounts on websites, just for choosing to shop online.

“Retailers with general merchandise or convenience food stores, family clothing stores and discount stores came out on top, as people stocked up on essentials and treats alike, after a tough financial year, with men's and women's clothing stores coming in close behind,” says Williamson.

Glenda Steyn, head of enterprise sales at Peach Payments.
Glenda Steyn, head of enterprise sales at Peach Payments.

Online payment platform Peach Payments says over the four-day weekend, it processed more than 1.1 million transactions, to a total value of over R872 million.

“Retail industry activity grew by 52% in transaction count and by 41% in rand value over 2022 figures,” comments Glenda Steyn, head of enterprise sales at Peach Payments.

“Likewise, the food and beverage sector grew by just over 57%, both in rand value and in number of transactions. Overall, the travel and accommodation industry saw growth of a staggering 341% compared to 2022.

“These figures make sense within the broader South African context, as families try to manage their expenses in the face of rising food inflation and interest rates.”

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