Black Friday 2018 to be SA's biggest yet
Black Friday sales this week are expected to draw more South Africans online than ever before, with local e-commerce players expecting to double their earnings from last year.
Instead of facing hordes of people in traditional bricks-and-mortar stores, the trend over the years has seen price-conscious South Africans increasingly choose to rather scramble for deals online.
Black Friday, which takes place this Friday, is traditionally the day after Thanksgiving in North America, which marks the day when retailers move into profitable territory (the black). The trend has been embraced globally in recent years and is regarded as the start of the festive shopping season.
Arthur Goldstuck, World Wide Worx MD, says: "The appeal of Black Friday lies entirely in ridiculous prices. The unspoken deal is that shoppers will get a quarter, third or half off the price of a product. Many people who are in the market for a specific product that falls under Black Friday deals will wait for the day to try to get the same product they were going to buy anyway, but at a substantially lower price."
He says Black Friday shopping online is probably doubling every year, "versus overall online retail going up by 25% a year, according to the Online Retail in South Africa 2019 report that World Wide Worx released at the beginning of November. It could reach half a billion rand this year, if we include the so-called Cyber Monday that follows."
According to the report, only around 4% of South Africans shop online regularly, although Goldstuck says far more do so on an ad hoc basis.
He says those consumers who are regular online shoppers will stay away from stores completely, and only shop online.
"Many other shoppers, who have been reticent to shop online, will be persuaded to try it out both by the madness in malls and by the superb deals being offered online. This should result in a big boost in the number of South Africans shopping online."
Julie-Anne Walsh, CMO at Takealot, says within the first hour of Black Friday 2017, there was a 280% year-on-year uplift in visits to the site, generating more than R6 million. In total, for the whole day, there was a record number of 2.2 million visits, with the company making R87 million in gross merchandising value (GMV) compared to R56 million in 2016.
She anticipates the growth to continue this year. "We expect to see a 75% increase in traffic during Black Friday 2018 and 2.2x growth in terms of GMV."
This means a GMV of more than R175 million is expected on Friday for Takealot, in a single day of sales.
Klyne Maharaj, head of brand at Superbalist, one of SA's largest online fashion retailers, says last year's Black Friday (before the firm's merge with Spree) was its biggest trading day to date, with 118% year-on-year growth and double 2016's sales figures.
"Since Superbalist.com first took part in Black Friday in 2014, sales and traffic have more than doubled each year. This year, Black Friday comes just two months after the merge with Spree and so we expect to see an even bigger increase considering the newly joined Spree database of customers."
Bidorbuy CEO Jaco Jonker says: "We believe consumer interest will be at its highest this year. Black Fridays are traditionally exceptionally high, and this year we expect better results than ever."
John Bradshaw, head of marketing at Pick n Pay, says the retailer's online shop will launch its Black Friday deals at 00.01am on 23 November, when there will be selected online-only deals.
"For a convenient and stress-free Black Friday shopping experience, we invite customers to shop online. For Black Friday weekend we have added additional delivery and Click n Collect slots to minimise any delays in customers receiving their Black Friday purchases."
Last year, Takealot and other online retailers struggled to keep their sites up as overwhelming volumes of people tried to score a deal at the same time.
"Over the past year, we have prepared intensively for Black Friday," says Takealot's Walsh. "We've bolstered resources across the business, from our engineers and developers to customer service shopping assistants and warehouse staff, and have increased our Takealot delivery team drivers from 1 300 to 3 000, to manage the increase in volume.
"In terms of online infrastructure, we've looked at all options to ensure an excellent experience and efficient management of traffic to the site over the period."
Superbalist's Maharaj says the team is also taking every possible measure to keep the site up.
"Our engineering team is preparing ahead of Black Friday, testing our systems rigorously to pre-empt any possible issues that may arise. If the site does go down, we will have contingencies that allow customers to shop Black Friday deals in the subsequent days."
Parcelninja CEO Justin Drennan expects a 500% spike in sales this Friday.
"Many online shopping sites' IT infrastructure buckles under the load, and payment providers often struggle with the high number of transactions," says Drennan.
However, he says the biggest problem is deliveries. The delivery company has geared up for the increased demand by employing more staff over the period, scaling up servers, and investing in advanced IT systems that allocate deliveries across multiple couriers, based on load and delivery volume commitments from couriers.
"This means that we never end up giving too much volume to a single courier, which can cause delivery problems."
Last year, the top-selling category for Takealot was TVs, followed by small kitchen appliances, cellphones and wearable tech.
Maharaj says women's fashion was the most popular category sold last year, followed by sneakers, with the most in demand product being the Adidas Originals Superstar Foundation in black and white.
"In keeping with the Black Friday themes, we also found the most popular colour across all products sold was... black!"