CAPE TOWN – If you are wondering if Black Friday is going to be very different this year, the answer is a resounding yes!
With stores navigating a Covid-19 minefield of hygiene protocols, limitations on customer numbers and social distancing against a backdrop of consumer financial constraints, Black Friday is moving online as a more viable alternative.
“There has been a surge in people embracing e-commerce both globally and in South Africa over lockdown,” said co-owner Jonah Naidoo of Dry Dock Liquor, which transformed from a boutique local outlet to a national e-commerce platform during the lockdown. “We see this translating into a new Black Friday experience, both for consumers and retailers.”
So how is Black Friday going to play out this year?
Redefining luxury
There has been a marked decrease in disposable income compared to last year, even for those who have not lost their jobs – given salary cuts and curbs on bonus and commission payments. This will impact on people’s buying power and motivation for discounted items.
For many shoppers the definition of luxury has changed, with the lockdown altering shopping behaviour and values, there is an upswing in attention on experiences.
“This has led to a spike in hiking and other outdoor activities, spending quality time with loved ones with a focus on home entertaining – so food and good wine may be preferable indulgences to spending money on bigger ticket items like a TV or fridge,” said Naidoo.
Replacing Frenzy with value
With the hype resulting from in-store crowds currently a thing of the past, stores will also need to rethink what the value of Black Friday is for shoppers.
Migration from physical to virtual store has empowered shoppers to do more comparative shopping. Ordering from five different stores is also much easier in the online scenario, as shoppers can easily look for the best deal for a particular item.
Black Friday is no longer a simple equation of marking down goods, value and meaning has entered the equation.
Offering exclusivity and being the only retailer to be selling a specific item will go a long way to attracting shoppers to your site.
“Consumer spending is tight. Changing up different offers from specials running from a week to the entire November month, to those on the actual day of the Black Friday weekend leading into Cyber Monday,” said Naidoo.
“Emphasis is on accommodating these and other shopper needs such as providing alternative payment options to meet the pain point of financial constraints. This can be either better payment terms or alternative payment solutions such as a buy now pay later plan.”
Online is where it’s at
This Black Friday, online trading is going to get a massive boost to levels never experienced before. There has been a massive shift to shopping online for the eight months since the onset of lockdown as more and more consumers transact in the digital environment.
Major players like the big retail stores are further galvanising this online move, focussing their messaging on e-commerce rather than having consumers visiting their physical stores.
Additionally, news of European countries going back into lockdown is weighing on customers’ minds, which is going to translate into South Africans not wanting to queue in physical stores.
Retailers are circumventing the previous norm of people flocking to stores by offering specials both online and in-store. In this way, people will have ample time and access to enjoy bargains without increasing the risks of contagion that crowds would bring.
Leveraging in-store hype in the online arena
With a bigger online shopping base, retailers are more emboldened to invest in technology and social media to support their Black Friday campaigns, changing the playing field associated with the biggest day in the shopping calendar.
Black Friday is really about surprising and delighting customers. The success of Black Friday 2020 really depends on how innovative retailers will be in the offering and promotions and how successfully they can push in-store customers online.
This could feature more bundles of offers online to replicate the in-store experience of buying more than you planned.
Recouping losses from lockdown
Black Friday and the year-end holiday season will be a major test for lots of retailers and might determine their survival in some instances.
There have been months of no trading activity over the lockdown, impacting retailers negatively.
And while some industries managed to find their feet in the post-Covid-19 environment, industries such as alcohol and particularly tourism are still struggling to survive.
Wine producers lost the Northern hemisphere summer season trade, not exporting to UK and Europe supermarkets. Additionally, wine farms with tasting rooms have lost the tourism market this year. This will continue to hurt producers until 2021.
“On the other hand, good news for consumers is that there’s a surplus of wine in some producers,” said Naidoo. “This presents an opportunity for local consumers to take advantage of stock at value-for-money deals.”
Discount focussed shoppers
It has been a tough year for the consumer, with job losses and reduced time as a result of lockdown. The credit data statistics out of TransUnion show consumers under strain, with accounts in early default (three months in arrears) increased by an alarming 21 percent year on year in the second quarter after rising 5 percent year on year in the first quarter.
In this financial climate, shoppers are bargain hunting. Whether it’s stocking up on gifts for the festive season or spending on items for the home, consumers will want to maximise Black Friday offerings to avoid paying higher prices later on.
“Whatever they may be buying and wherever they may be shopping – you can be sure of one thing: It’s going to be online!” said Naidoo.
BUSINESS REPORT