Bumper Black Friday sales to create employment spike
The Black Friday period is expected to create over 150 000 job opportunities across the South African economy, with the ecommerce sector expected to encompass a significant portion of these short-term roles.
This is one of the key findings of research conducted by the Bureau of Market Research (BMR), on behalf of fintech group Capital Connect.
Black Friday takes place on 24 November this year, and the report covers the period from 29 October to 26 November.
The study shows that despite tough economic conditions - such as surging inflation and the rising cost of living forcing consumers to tighten their belts - South African e-tailers are preparing to cash in on the busiest shopping period of the year for retail sales.
SA’s online Black Friday sales are on track for a bumper year, with the retail industry predicted to record a turnover of R26.6 billion in 2023 – exceeding last year’s R19 billion for the same period, it says.
According to the report, the ecommerce sector, which currently contributes less than 5% of overall retail sales in SA, is set to make a higher-than-normal contribution to overall retail during the Black Friday period.
Retailers’ online presence will be a strong facilitator of Black Friday sales, helping to run discounts, special offers and sales promotions to optimise Black Friday sales, it says.
Professor Carel van Aardt, research director at BMR, tells ITWeb that the predicted sales boom is expected to boost short-term employment in the ecommerce sector’s entire value chain, including supply chain, logistics, fulfilment and warehousing.
The job opportunities to be created during this period include informal and contract work in the retail industry and the entire economy.
“Given the nature of these 150 000 job opportunities – most of them are either directly linked to brick-and-mortar (packers, salespeople, etc), while some are linked to ecommerce (delivery people, click-and-collect packers, etc),” notes Van Aardt.
During 2022, total online retail sales surpassed the R50 billion mark (4.2% of retail value) and this is expected to grow to about 15% of total retail value by 2030, says BMR.
However, the additional sales value for the 2023 Black Friday period is forecast to still be behind the R42 billion in additional retail turnover generated by the entire retail sector in the same period in 2021.
Following two years of weak economic growth, 2023 is not expected to reach the heights of 2021, when sales were lifted by more than a year of pent-up demand after the COVID-19 lockdowns, notes the report.
Steven Heilbron, CEO of Capital Connect, explains: “Black Friday 2023 and the festive season provide a unique opportunity for savvy retailers to capitalise on increased consumer spending. It also appears from a recent Capital Connect survey that many retailers are already implementing strategies to optimise sales.
“These include having a strong online presence, adding a ‘click-and-collect’ offering as part of an omni-channel, investing in delivery scooters and introducing ‘shoppertainment’ for better in-store customer experiences.
“Interest in online shopping is very strongly correlated with the Black Friday season. The implication of this is that instead of solely visiting shops/malls to make use of Black Friday offerings, consumers are increasingly buying such retail goods online during the season.”
The methodology of the BMR study entails a time-series econometric model populated with macro-economic, monthly retail and big data covering the period 2015 to 2023.
An autoregressive integrated moving average was used to complete the macro-economic, retail (by sub-sector) and big data (including interest in Black Friday) patterns up to December 2023.
The econometric model was tested for structural integrity and accuracy before being used to generate results required for the study.
According to the report, formal retail sub-sectorial analysis was conducted to determine what consumers will be buying during Black Friday 2023.
“Some of the categories that will be popular among online shoppers include clothing, shoes, beauty/cosmetic products, food and household goods, such as electronics and appliances,” says Van Aardt.
“Online-only sales contribute to about 5% of the retail sales value. However, ecommerce as part of the omni-channel contributes substantially more to retail income. With respect to Black Friday sales, it can be expected that the normal retail distribution between online-only and physical, as part of the omni-channel, will hold true.”
Some of the challenges expected to be encountered by e-tailers during this year’s Black Friday shopping season include very low investor confidence, crumbling infrastructure, load-shedding, low consumer spending power, and high producer and consumer price inflation.
Load-shedding will force online retailers to adopt contingency strategies that will enable them to circumvent downtime on digital channels, adds the research report.
“Although the load-shedding schedule for November 2023 is not known at this time, it can be surmised that load-shedding will have a significant impact on Black Friday sales. In the absence of load-shedding, Black Friday sales and the resulting number of job opportunities would have been substantially higher.”
Republished with permission from ITWeb Limited