Consumers blew a lot of money on appliances, food and booze

The economy might be in the toilet, but that didn’t stop consumption this Black Friday. And shoppers went large, with one splurging R1.6-million on an online purchase, while another put R739,000 on a debit card.

For the rest of us mere mortals, Black Friday was an opportunity to stock up on groceries, clothing and appliances during the biggest shopping phenomenon of the year.

Last year, NielsenIQ’s analysis of Black Friday in South Africa found it was bigger than the traditional festive season purchase week in December 2021, with more than half the volume of all fast-moving consumer goods (FMCG) products sold on promotion, equating to goods worth R4-billion sold on discount deals.

Black Friday has come to dominate the SA retail sector. In 2021, NielsenIQ sub-Saharan Africa analytics director Kobus Eksteen said FMCG basket sales were 23% higher than the average of all other month-end weeks in 2021, with volumes sold on promotion 55% higher.

NielsenIQ also found the Black Friday week and the week after it surpassed the two key December month-end weeks, from 2% higher in 2020 to 6% in 2021, suggesting sales were now pulled forward from December into November, which effectively eats into the traditional Christmas sales period.

The global information services company said last year in SA the biggest volumes of sales included 89% of coffee creamer sold on promotion, 75% of rice, 86% of washing powder, 74% of instant coffee and 66% of whisky.

This, Eksteen noted, meant some brands had become reliant on Black Friday sales to achieve their targets.

“The emergence of ‘promo only shoppers’ has resulted in these shoppers having a permanently altered perception of price point changes and extreme price sensitivity,” he said.

The cost of living crisis and inflationary pressures are driving this shopping behaviour, with most promotions last year relating to brick-and-mortar deals, and an increased use of e-commerce.

2022 saw last year’s expenditure on Black Friday deals and said “hold my beer”.

In the US, online Black Friday sales topped a record-breaking $9.12-billion according to Adobe Analytics, which tracks sales on retailer websites. American consumers spent 2.3% more online in 2022, with electronic devices, toys and exercise equipment the biggest sellers.

BankservAfrica, an automated clearing house that operates an interbank payment infrastructure for the big four banks in SA, says 2022 marked the return of the Black Friday bumper spend, as midnight and intra-day deals exceeded the 2021 figures. Online selling was the big winner, tracking significantly higher growth.

BankservAfrica says it logged about 1.2 million transactions worth more than R1-billion on 3D Secure, its online card authentication service.

For SA, this is a sizeable growth of 42% more transactions than the 737,985 total in 2021. Martin Grunewald, the company’s chief business officer, says: “In the hours between [1am and 5am], BankservAfrica recorded more than double the number of transactions compared to the same period in 2021, when shopping picked up from [6am].

“Shortly after lunchtime, BankservAfrica’s 3D Secure transaction volume was almost the same amount as the full-day transactions processed in 2021.”

There were 6.3 million card point-of-sale (POS) transactions, which represented a 21% increase from last year’s 5.2 million, with a value amounting to R3.9-billion. That’s 16% higher than 2021’s R3.3-billion.

Just between 4pm and 5pm on Black Friday, there were 526 595 card swipes in SA. The most swipes by one card were 827.

BankservAfrica says the highest unique successful transaction by credit card was for an online transaction valued at R1.6-million and R739,600 for an online purchase with a debit card.

Capitec’s card purchases exceeded ATM withdrawal values for the first time, which indicates a major shift in client behaviour.

In 2022, a total of 8.9 million POS for goods and services were made (up from 7,053,039 last year), worth just over R3-billion (compared to R2.7-billion last year and R1.7-billion in 2020). Online purchases rose sharply, from 2021’s R83-million to R134-million in 2022.

Capitec’s Cash Back at POS amounted to about R489-million, compared with R290-million the previous year.

FNB has reported seeing a 25% increase in Black Friday volumes by midday, with a 53% increase in brickand-mortar activity. On Black Friday, the bank’s customers spent over R3-billion – FNB’s highest Black Friday spending in four years.

R2.4-billion was spent in-store (card present), while over R670-million was for online shopping (card not present). FNB Virtual Cards accounted for over R137-million in purchases compared with R36-million during last year’s Black Friday (a 280% increase).

Chris Labuschagne, CEO of FNB Card, says with the rising cost of living, many customers wanted to take advantage of Black Friday deals. “As anticipated, the most popular spending categories, including travel and transportation, groceries, clothing and entertainment, experienced a robust recovery. The increase in travel is especially encouraging given that many consumers were unable to travel in the past few years due to global travel limitations, and it augurs well for the South African economy as the festive season approaches.”

FNB CEO Jacques Celliers says the bank’s total systems transactions per second peaked at 3,442, with just over five million transactions processed through its payment systems by midday.

“We are also seeing a continued increase in e-commerce transactions as some consumers opt to shop online instead of going into brick-and-mortar stores. By midday, e-commerce transaction volumes had increased by 40%.”

In the lead-up to the Black Friday week, e-commerce was already at almost 90% of 2021 values and volumes, with the travel and accommodation sectors already exceeding 2021’s value by 10%, he says.

Nedbank saw a 39% increase in contactless payments on Black Friday between 2021 and 2022. Privesan Naidoo, Nedbank trading products executive, says Black Friday weekend 2022 reflected a shift towards digital payments and online shopping. “Our data reveals a massive year-on-year increase of 88% in online transactions on Black Friday, whereas the growth in physical purchases [rose] by 30% on Black Friday.”

The bank says most transactions were made by customers younger than 50, with the biggest increase in spend proportion seen among consumers in their 30s. It increased from 21% of total spend across Nedbank channels in 2021 to 27% this year.

Nedbank customers splurged on groceries, general shopping and clothing, followed by fuel, alcohol and furniture. The merchants that saw the biggest support in terms of transaction volumes were Pick n Pay, Checkers and Superspar. Online retailers are smiling, with Takealot saying it had a record-breaking Black Friday. The e-commerce company’s CEO, Frederik Zietsman, says it saw 33% growth year-on-year in gross merchandise value (GMV) as well as more than three million visits on the day.

TVs, large appliances such as washing machines and dishwashers, load shedding essentials, laptops, smart watches, fragrances, sports equipment and household essentials were the first to go soon after midnight on Black Friday.

“The most orders placed by a single customer on the day was 58 orders and the biggest single basket value was R190,179.”

Its top item sold by unit was Ballantines Finest Scotch Whisky; the top item sold by GMV was the Hisense 58” Smart TV, and the most valuable item was a Samsung 75” Smart TV for R78,260.75 (the recommended retail price is R139,999).

“Close to 10,000 South Africans joined the Live Shopping streams with over 7,000 coupons issued to shop booster deals across top brands,” said Zietsman.