Black Friday is killing Christmas
While still a relatively new retail trend in South Africa, Black Friday is likely to have the same impact on local retail sector as it has had in the USA and the UK – massive pressure on retailers to make a profit over the lucrative Christmas shopping season.
According to a recent study done by auditing firm PwC, Black Friday is expected to draw almost 40% more interest and consumer spending in 2016.
While consumers love the day – where retailers often introduce massive discounts on merchandise – retailers, specifically those who operate physical retail stores, approach it with more dread than excitement.
The reason for this is the day’s proximity to Christmas, which is a big spending season among consumers.
Typically, in the USA where Black Friday started, the discount day signals the start of the Christmas shopping season. However, analysis by The Guardian has shown that it has become the main Christmas shopping day, at the cost of the weeks that follow.
This has created a rather ironic retail problem – where Black Friday does not generate extra sales in the run-up to Christmas as before – it simply brings sales forward and encourages people to buy their presents at a discount rather than full price.
Simply put: Black Friday is killing the Christmas shopping season.
The problem is even worse for physical retailers: PwC’s research showed that over three quarters of Black Friday shoppers are electing to make their purchases online or via tablets. These sales play into the hands of online stores like Amazon, which do not have the overheads that physical retailers carry,
According to analysts, retailers struggle on Black Friday to match the discounts and sales that online retailers put up, as their profit margins are much thinner as a result. In a tough economic environment as was seen across the globe in 2016, this spells bad news.
Black Friday in South Africa
Black Friday is still in its infancy in South Africa, but that has not stopped the imported trend from being the country’s busiest online shopping day of the year, according to Facebook.
Retailers are expected to see a record surge in sales in 2016, having seen spending increase by over 80% during Black Friday 2015.
Most of South Africa’s Black Friday deals are happening online – but many physical outlets such as Makro are also taking part.
South African online retail is still limited in its reach due to lower broadband penetration rates; however, considering the pace at which Black Friday has been adopted in the country, global trends sound a strong warning to retailers to not get ahead of themselves.
Read: Like it or not, Black Friday is officially a thing in South Africa – here’s why
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