By Chriszelle Joseph
South African shoppers may want to dial down their Black Friday expectations this year, with market data indicating a slowdown in consumer enthusiasm for the annual global shopping frenzy while retailers adjust their strategies toward a month-long approach that extends promotions across November.
According to statistics from Absa CIB, where consumer spending and transaction volumes on Black Friday once experienced double-digit growth—both in 2021 and 2022—this slowed to just 4% in consumer spending and 8% transaction volumes in 2023.
Moreover, on-the-day spending for Black Friday last year declined: the rand value of transactions dropped by 4%, in comparison to 2022. Furthermore, foot traffic on Black Friday 2023 plummeted, with an 80% decrease in in-store visits year-on-year.
While some of this downturn could be attributed to Black Friday falling before payday last year, the data also suggests a broader change in consumer habits.
Online shopping saw a 20% increase over the first 23 days of November 2023, while in-store spending rose by 8% for the same period, indicating that many shoppers are now seeking out deals throughout the month rather than waiting for a single day of discounts.
South Africa’s economic strain is fundamentally reshaping how, when, and where consumers choose to spend. Essentials like food, fuel, and electricity have seen sharp price increases, which means many consumers are reallocating their spending to cover rising costs of living rather than discretionary purchases.
Traditionally the fourth quarter is a king maker for the retail sector. This is where we see the uptick in consumer spending. However, we believe we will not see the same performance as previously because the consumer is still suffering and recovering from prolonged high interest rates, high inflation, unemployment, and low household income.
South African retailers are also facing economic headwinds that complicate their ability to fully capitalise on Black Friday’s potential. This has forced businesses to walk a fine line with pricing.
Additionally, competing with e-commerce giants has also led retailers to adopt a strategy of continuous offers throughout the year, eroding Black Friday’s status as a one-day event.
Online shopping and social media have also made consumers more price-savvy. They now expect competitive deals year-round, particularly with seasonal and post-holiday sales becoming more popular. This has contributed to what we might call ‘discount fatigue’—the sense that if deals are available frequently, there’s less need to act immediately on Black Friday.
To keep up, retailers have had to rethink their promotional strategy, offering regular price reductions to maintain consumer interest and avoid losing sales to their online counterparts who can afford to be perpetually competitive.
Retailers are increasingly shifting toward ‘Black November,’ a month-long approach that extends promotions over the period, rather than a single day. For consumers, this shift means fewer of the dramatic, one-day-only discounts that once defined Black Friday.
Instead, shoppers can expect more modest price cuts dispersed over the month, requiring a savvier, more patient approach to find the best deals.
Chriszelle Joseph is the senior coverage banker for consumer goods and services at Absa Corporate and Investment Banking.
BUSINESS REPORT