CAPE TOWN – Even though it is tempting to relegate Black Friday as just another marketing gimmick, the reality is that it signifies the start of a month-long consumer spending frenzy that significantly boosts retail revenues.
Recent research from SME funder, Retail Capital, showed the impact that it had across several sectors of the local market.
Card turnover the Friday before Black Friday is 10 percent less than the average spend for the seven-week period around Black Friday. On Black Friday it jumps to 33 percent more than the average and a week later it’s still 14 percent higher. There is a hold back on spend before Black Friday, but once Black Friday hits, there is a sustained increase in turnover.
“These statistics reflect how local consumers have embraced the concept and want to get the most value for their money. It also indicates that the period following Black Friday and Cyber Monday are vital to capitalise on the momentum these days bring,” said Karl Westvig, chief executive of Retail Capital.
The same holds true in FMCG sector that is up an average of 99 percent before Black Friday, 132 percent on Black Friday and 119 percent post Black Friday.
Credit card turnover
The food and beverage sector shows a credit card turnover of 94 percent, 112 percent and 112 percent, weekend before Black Friday, Black Friday weekend and the weekend thereafter respectively.
General retail also sees significant activity during the period with numbers showing credit card turnover at 78 percent the week before, 155 percent on the day, and 108 percent the week after.
Further research shows that there are massive increases in credit card turnovers in Gauteng (137 percent), the Western Cape (126 percent), and KwaZulu-Natal (122 percent) on Black Friday. These are however not limited to only on the day.
Examining the lead up to Black Friday, the week before sees an average card turnover in Gauteng of 86 percent, KwaZulu Natal of 87 percent, and the Western Cape of 90 percent.
The period following the event (highlighted by Cyber Monday – typically associated with online deals) sees the momentum continuing with 112 percent growth in Gauteng as well as 111 percent growth in both KwaZulu-Natal and the Western Cape. This carries on into the first week of December with Gauteng seeing a 106 percent increase and 111 percent growth in both KwaZulu Natal and the Western Cape.
Spend, spend, spend
According to Retail Capital research, the Black Friday/Cyber Monday weekend shows credit card growth across clothing (239 percent), FMCG (132 percent), food and beverage (115 percent), and general retail (155 percent).
What begins on the Friday grows strongly into Monday with more than 56 percent of purchases coming from online sales. Local businesses must therefore ensure that the specials they offer are significant or they risk losing out to more aggressive competitors.
“As our comparison of credit card turnover across the various retail sectors show, Black Friday presents companies in South Africa with a vital platform for growth. It has a marked effect on turnover heading into the festive season and one that must be capitalised on. Companies must embrace all available platforms, ensure their finance is in place, and manage stock to accommodate demand. If you are not going to capitalise on the likes of Black Friday and Cyber Monday, you are going to lose out,” adds Westvig.
And with consumer awareness around Black Friday increasing annually, there is no better time to start planning than now.
BUSINESS REPORT ONLINE