SUREN NAIDOO: Black Friday is formally on November 25 this 12 months – which is this Friday – and it’s going to be a bumper begin for gross sales for the month-end weekend. You would have already seen all of the Black Friday advertisements and that form of factor.
Read: Checkers vs PnP as Black Friday battle kicks off
Joining us now on the present is Kobus Eksteen, sub-Saharan Africa analytics business lead at NielsenIQ, talking concerning the Black Friday gross sales phenomenon, and analysis by the group which reveals that Black Friday gross sales surpassed Christmas gross sales final 12 months. Welcome to the present, Kobus.
KOBUS EKSTEEN: Hi, good night.
SUREN NAIDOO: Kobus, I suppose Black Friday gross sales in South Africa are prone to surpass peak Christmas gross sales once more this 12 months, based mostly in your analysis?
KOBUS EKSTEEN: Exactly proper. Like you say, Black Friday has formally handed the Christmas season as the most important single week for the trade, the FMCG [fast-moving consumer goods] trade. We at NielsenIQ are fortunately in a singular place, I suppose, to have probably the most broad or lifelike protection of the FMCG market. So after we attempt to unpack what occurred on Black Friday final 12 months, we check out over 300 classes that we analysed, and a few actually attention-grabbing insights has come out for us.
In the final couple of years Black Friday has taken the lead, however simply the extent to which it’s been rising and lengthening its lead over Christmas has actually stunned us. I imply, it went from 2% larger in 2020 to six% final 12 months in 2021 – which is a large bounce in a single 12 months if you’re looking on the whole FMCG trade in a single 12 months. So Black Friday is admittedly taking off, and momentum simply continues to develop 12 months on 12 months.
SUREN NAIDOO: Your analysis is especially on FMCG. Do you might have perception on different sectors? Could we are saying that Black Friday gross sales throughout the spectrum are larger than Christmas gross sales, or solely FMCG, based mostly in your analysis?
KOBUS EKSTEEN: That’s a tricky one to say. Unfortunately, this specific piece of analysis is just FMCG, so the form of groceries that you’d purchase at your native grocery retailer and your Pick n Pay, Shoprite, Checkers, and so on, which you’d discover in your kitchen pantry. I can’t converse for any of the opposite merchandise however, if this is something to go by, I’m positive that lots of the opposite classes outdoors of FMCG would be experiencing an identical kind of progress.
SUREN NAIDOO: Well, talking to landlords, I do know some landlords and retailers have indicated that there was a shift within the gross sales, so it’ll be attention-grabbing to look at. Has NielsenIQ any form of expectation round Black Friday gross sales progress? What was the expansion in FMCG gross sales final 12 months and over the interval, and what are expectations probably for this Black Friday?
KOBUS EKSTEEN: An excellent query.
When we checked out 2021 final 12 months, we noticed that greater than R8 billion went by way of the tills in a single week for the FMCG trade, and greater than half of that, simply shy of 55%, was on promotion.
So over R4 billion in gross sales for the week went by way of the tills whereas on promotion. And after we went a step additional, we analysed it versus your common in a month-end week which usually additionally sees a bump in gross sales, we noticed that Black Friday was 23% larger than the typical month-end week and 55% larger when it comes to quantity that went by way of on promotion. So clearly an enormous funding by the trade for that single week.
And when it comes to the expectation for this 12 months, for positive, we speak concerning the client in South Africa being a little bit of a promo … client; South Africans simply love a very good deal. South Africa constantly ranks within the high 5 most price-[conscious] markets throughout the globe that NielsenIQ measures. And if you happen to throw into the combo issues like inflation pressures, value of residing rising, your gasoline costs going up, electrical energy costs going up, and so on, then our expectation is that Black Friday this 12 months will proceed to be a bumper week as customers attempt to seize maintain of these decrease costs than they might in any other case have needed to pay.
SUREN NAIDOO: Does NielsenIQ do analysis into what precisely customers are shopping for? You talked about the main focus of the report is on FMCG. We see advertisements for laundry powder, however what are the highest buys for FMCG merchandise which can be on the record?
KOBUS EKSTEEN: You’re precisely proper. Like I discussed, we analysed over 300 classes, so it’s fairly a bit of knowledge. What we did is we simply drilled down into a few what I suppose you wish to name home goods that you’d discover in most pantries. So we checked out issues like breakfast cereals or dishwashing liquid such as you talked about, we checked out rice, espresso creamers, perhaps instantaneous espresso in addition to gin and whisky. These classes are properly distributed and throughout most households in South Africa. What we discovered is that a few of them have been going properly over 80%, even touching 90% of the amount that we noticed in tills throughout that week was on the discounted value. So that’s an infinite quantity for a single week. In reality, after we checked out it a bit additional, my classes like your whisky, dishwashing liquid and biscuits, for instance, a few of them noticed upwards of twenty-two% of whole annual gross sales occurring in that single week throughout Black Friday, which I suppose simply form of bodes properly for a way profitable they’re throughout Black Friday, and the way a lot funding goes into it.
But I suppose there’s additionally a double-edged sword component to it, as a result of virtually 1 / 4 of your gross sales would disappear in a single day if you happen to stopped taking part throughout Black Friday week. So I suppose there are execs and cons to it for the trade. But you may undoubtedly simply see when 90% of your gross sales throughout that week are occurring on reductions. It simply exhibits the funding and the quantity of focus that’s going into driving that gross sales uplift throughout the week.
SUREN NAIDOO: I don’t know if this is essentially a part of your analysis, however I’m simply going to ask the query. Are folks truly getting large discounted offers, or is it throughout the context of spiking meals costs? Are they actual reductions, or are they simply getting caught up with the frenzy, because it have been?
KOBUS EKSTEEN: That’s a really related query. I believe there are some issues on the market referring to it. Look, when it comes to our examine, what we did is we stated something that had a drop of no less than 5% or extra versus its ongoing regular value was categorised as a promotion. So to ensure that it to have been counted as a promotion as a part of our examine, it must have had no less than a drop of greater than 5% to ensure that it to even be categorised as a promotion. I believe if you happen to simply have a look at the final development throughout the trade, there are lots of promotions occurring because the trade tries to form of offset these value pressures and the pressures on the pockets that buyers are dealing with. There’s even some sentiment that probably [it is] coaching buyers to be promo-only consumers for the time being.
As extra customers see costs of merchandise at a lower cost level, the extra sensitised you develop into to a value level, virtually the extra allergic you develop into to paying the traditional on a regular basis value level. So I believe as an trade as an entire, sure, we’re selling quite a bit.
If we ignore Black Friday and simply have a look at your regular annual gross sales, upwards of 32% of quantity is offered at a reduced value all through the typical of the 12 months, not even Black Friday.
So as an trade we do promote quite a bit, and it’s some of the efficient levers that the trade can pull to attempt to see a quantity uptake.
SUREN NAIDOO: Kobus, we’ll have to depart it there. Thank you a lot in your time. That was Kobus Eksteen from NielsenIQ.