Black Friday 2024 is set to significantly impact South Africa’s economy, with projections of R88 billion in additional economic value generated during November.
Research by Capital Connect and the Bureau of Market Research highlights the effects on the retail, wholesale, and fuel sectors, presenting both opportunities and challenges for industry stakeholders.
Projected Economic Impact
Capital Connect’s research anticipates that Black Friday 2024 will contribute R22 billion in direct retail revenue, R28 billion in indirect economic impact, R32.1 billion from the wholesale sector, and R6.2 billion from fuel sales. The combined R88 billion contribution represents a 17.3% increase in November retail sales, from R116.1 billion in 2023 to an estimated R136 billion this year.
“The positive outlook for Black Friday 2024 suggests a recovery for South African retailers after a challenging economic period,” says Steven Heilbron, CEO of Capital Connect. “Among the factors that have helped to improve the economic outlook include reduced load shedding, the introduction of the Two-Pot Retirement System, an interest rate cut, and lower inflation.”
Shifting Consumer Trends
Consumer spending patterns have changed since the pandemic, with shoppers spreading their purchases throughout November and focusing on practical items over luxury goods. Standard Bank’s 2023 data revealed that groceries accounted for 27% of Black Friday weekend spending, up from 26% in 2022, while electronics and appliances saw reduced dominance, with clothing and department store items gaining traction.
“More people are shopping for groceries on Black Friday than for electronics and other discretionary items,” says Tumelo Ramugondo, Head of Credit at Standard Bank. He also highlighted growing consumer interest in experiences, such as travel and entertainment, which showed higher spending but lower transaction volumes.
The Role of E-commerce and Digital Payments
Digital wallets and online platforms continue to transform the Black Friday shopping landscape. Standard Bank reported that 37% of all online purchases during Black Friday 2023 were made using digital wallets such as Apple Pay, Samsung Pay, and Google Pay. Digital wallet transactions grew by 81% year-on-year, and FNB noted a 93% increase in virtual card transactions during the same period.
“Shoppers are making fewer but higher-value transactions in online stores,” says Chris Wood, managing executive for product at Absa, reflecting a shift towards mindful spending.
Opportunities for Retailers
Black Friday 2024 presents an opportunity for retailers to attract consumer interest through tailored promotions, omnichannel strategies, and enhanced customer engagement. Heilbron suggests that retailers:
- Expand omnichannel options to meet diverse customer preferences.
- Introduce loyalty programs to encourage customer retention.
- Adjust product offerings to appeal to budget-conscious shoppers and those with higher disposable income.
“The final months of the year offer retailers a chance to capitalise on increased consumer spending by securing appropriate stock and implementing effective promotions to drive sales,” he says.
Challenges and Risks
While Black Friday offers significant economic benefits, it also carries risks such as cybercrime. “Phishing attacks continue to be a significant threat wherein fraudsters send deceptive emails pretending to be legitimate companies such as retailers, streaming services, and banks,” says Dr. Belinda Rathogwa, Standard Bank’s head of digital and e-commerce.
She advises shoppers to “carefully examine the web address for typos or missing characters before making online purchases, as scammers often create sites that closely resemble those of legitimate retailers.”
“Deals that seem too good to be true usually are. Be cautious if someone pressures you to make a quick payment to secure a deal. Also, watch for fake websites that closely mimic legitimate retailers,” she adds.
Looking Ahead
Black Friday 2024 is expected to influence the festive season, with November promotions often extending into December. For jewellers, this period offers an opportunity to showcase both everyday and aspirational pieces while leveraging targeted promotional strategies and digital innovations to capture increased spending.
