Hi there,
Originally started as a post-Thanksgiving clearance sale, American retailers made Black Friday a global phenomenon. And, although somewhat muted in 2024, overall spending still rose by 3.4% year on year in the US – little growth if one factors US CPI at 2.7%. Nonetheless, Black Friday in the USA was still in the black. But did SA retail see a similar return this year? It’s a mixed bag.
Going into Black Friday in SA, retailers would have been keenly aware of local buyers' crunch and perhaps expected a more conservative buying approach. But to what extent have economic conditions impacted Black Friday in 2024?
To measure the impact of Black Friday on SA retailers, we analysed the 80 days of spending leading up to Black Friday at 28 retailers and compared this to the spending during Black Friday weekend (from Black Friday to Cyber Monday).
A major factor we looked at is just how much the daily spending increased over the Black Friday weekend compared to the 80 days leading to Black Friday – we call this the Black Friday Multiple (BFM).
Let’s dive in.
Emptying wallets before Black Friday?
The average spending across the 28 retailers leading up to Black Friday 2024, increased by 2% from the year before—slightly below the inflation numbers for November ‘24, which came in at 2.9%.
Some retailers made this period count, either through month-long promotions or simply better year-on-year (YoY) performance.
Growth in Spend: 8 Weeks Leading Up to Black Friday
It’s worth noting that both Amazon and Temu were excluded from this graph. These two have seen massive increases in spending, capturing 4% and 5%, respectively, compared to Takealot’s 27% of the 28 retailers analysed.
This is significant for Temu, considering they have only been around in South Africa for a little more than a year.
Percentage of Tracked Spending
How did Black Friday Impact Daily Spend
During the 2023 Black Friday period, the average increase (BFM) in daily spending across all retailers tracked was 179%. But in 2024, it had less of an impact, with Black Friday increasing daily spending by only 134%.
The reduced impact can also be seen by comparing sales and transaction values of 2023 with 2024:
- An 8% decrease in the number of transactions
- A 15% decrease in total spend
- A 1% decrease in average transaction values
Major winners in 2024 include Game Online (384%), OneDayOnly (385%) and CottonOn Online (419%). Takealot saw a somewhat less impactful Black Friday, with a daily spending increase of 166% in 2024 compared with a 254% increase in 2023.
Black Friday Multiple: 2024 VS 2023: Per Merchant
An interesting observation is that while Temu saw a great increase in YoY spending in the period leading up to Black Friday, it’s Black Friday numbers almost look the same as regular daily spending, with only a 37% increase over the Black Friday weekend.
One could argue that with the constant discounts and vouchers offered on Temu, customers might have become “immune” to additional offers such as Black Friday. Discounts become part of the expectation, and it makes seasonal promotions hard to identify.
The low Black Friday impact for Temu could also be due to customers reserving Black Friday purchases to buy bigger ticket items (TV, Fridge, etc). Massmart Online, Game Online and Makro Online average transaction values of R3’380.22, R3’075,23 and R3’403.98, respectively, seem to motivate this behaviour.
The big shift online
Compared head-to-head, online showed a remarkable ability to generate the “Black Friday Effect”, far outpacing in-store in its ability to increase daily spending from the pre- to Black Friday itself.
Daily Spend: Offline VS Online
Online also saw its share of spending increase from 60% to 63%, highlighting how marketing during the Black Friday period could bear much fruit for retailers with the right strategy.
Share of Spend: Offline VS Online
Nothing eats margin in e-commerce like delivery fees, and higher transaction amounts are often indicators of higher margins. Massmart and iStore (not surprising considering the costs of Apple products) lead the charge here. Temu, which offers free shipping on all orders, has an average transaction value 3 times lower than the online average.
Average Transaction Value: Online
Black Friday Conclusions
Retail is definitely feeling the pain of a cash-strapped consumer when not even the most enticing discounts of the year could fuel growth. There are, however very positive signs for e-commerce, particularly around its ability to clear stock at discounted prices.
It’s also clear that even in the midst of cash-stripped consumers, Black Friday can, for most retailers, push daily spending up by more than 100%.
Black Friday in SA was down this year by 12%, unlike the US, which saw some minor increases in sales. This further emphasises the strain SA retail has been under in 2024.
All things considered, it’s likely a black Friday most local retailers would like to forget.
Let’s hope the festive season brings some good news for local retail.
