SUREN NAIDOO: Black Friday is formally on November 25 this yr – which is that this Friday – and it’s going to be a bumper begin for gross sales for the month-end weekend. You’ll have already seen all of the Black Friday advertisements and that type of factor.
Learn: Checkers vs PnP as Black Friday battle kicks off
Becoming a member of us now on the present is Kobus Eksteen, sub-Saharan Africa analytics industrial lead at NielsenIQ, talking in regards to the Black Friday gross sales phenomenon, and analysis by the group which reveals that Black Friday gross sales surpassed Christmas gross sales final yr. Welcome to the present, Kobus.
KOBUS EKSTEEN: Hello, 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 yr, primarily based in your analysis?
KOBUS EKSTEEN: Precisely proper. Such as you say, Black Friday has formally handed the Christmas season as the largest 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 real looking protection of the FMCG market. So after we attempt to unpack what occurred on Black Friday final yr, we check out over 300 classes that we analysed, and a few actually attention-grabbing insights has come out for us.
Within the final couple of years Black Friday has taken the lead, however simply the extent to which it’s been rising and increasing its lead over Christmas has actually shocked us. I imply, it went from 2% larger in 2020 to six% final yr in 2021 – which is a large soar in a single yr while you’re having a look on the whole FMCG trade in a single yr. So Black Friday is actually taking off, and momentum simply continues to develop yr on yr.
SUREN NAIDOO: Your analysis is especially on FMCG. Do you’ve got perception on different sectors? Might we are saying that Black Friday gross sales throughout the spectrum are larger than Christmas gross sales, or solely FMCG, primarily based in your analysis?
KOBUS EKSTEEN: That’s a tricky one to say. Sadly, this explicit piece of analysis is barely FMCG, so the sort of groceries that you’d purchase at your native grocery retailer and your Decide n Pay, Shoprite, Checkers, and so forth, which you’d discover in your kitchen pantry. I can’t converse for any of the opposite merchandise however, if that is something to go by, I’m certain that plenty of the opposite classes exterior of FMCG can be experiencing an identical sort of development.
SUREN NAIDOO: Properly, 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 type of expectation round Black Friday gross sales development? What was the expansion in FMCG gross sales final yr and over the interval, and what are expectations probably for this Black Friday?
KOBUS EKSTEEN: A superb query.
Once we checked out 2021 final yr, we noticed that greater than R8 billion went via 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 via 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 common month-end week and 55% larger when it comes to quantity that went via on promotion. So clearly an enormous funding by the trade for that single week.
And when it comes to the expectation for this yr, for certain, we speak in regards to the shopper in South Africa being a little bit of a promo … shopper; South Africans simply love an excellent deal. South Africa constantly ranks within the high 5 most price-[conscious] markets throughout the globe that NielsenIQ measures. And should you throw into the combination issues like inflation pressures, value of dwelling growing, your gas costs going up, electrical energy costs going up, and so forth, then our expectation is that Black Friday this yr will proceed to be a bumper week as shoppers 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 shoppers are shopping for? You talked about the main target 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, possibly immediate espresso in addition to gin and whisky. These classes are nicely distributed and throughout most households in South Africa. What we discovered is that a few of them had been going nicely over 80%, even touching 90% of the amount that we noticed in tills throughout that week was on the discounted value. In order 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 taking place in that single week throughout Black Friday, which I suppose simply sort of bodes nicely for a way profitable they’re throughout Black Friday, and the way a lot funding goes into it.
However I suppose there’s additionally a double-edged sword factor to it, as a result of nearly 1 / 4 of your gross sales would disappear in a single day should you stopped collaborating throughout Black Friday week. So I suppose there are professionals and cons to it for the trade. However you’ll be able to positively simply see when 90% of your gross sales throughout that week are taking place on reductions. It simply exhibits the funding and the quantity of focus that’s going into driving that gross sales uplift through the week.
SUREN NAIDOO: I don’t know if that is essentially a part of your analysis, however I’m simply going to ask the query. Are individuals really getting large discounted offers, or is it throughout the context of spiking meals costs? Are they actual reductions, or are they only getting caught up with the frenzy, because it had been?
KOBUS EKSTEEN: That’s a really related query. I feel 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 at the least 5% or extra versus its ongoing regular value was labeled 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 at the least a drop of greater than 5% to ensure that it to even be labeled as a promotion. I feel should you simply take a look at the overall development throughout the trade, there are plenty of promotions taking place because the trade tries to sort of offset these value pressures and the pressures on the pockets that customers are going through. There’s even some sentiment that doubtlessly [it is] coaching customers to be promo-only patrons in the intervening time.
As extra shoppers see costs of merchandise at a cheaper price level, the extra sensitised you grow to be to a value level, nearly the extra allergic you grow to be to paying the traditional on a regular basis value level. So I feel as an trade as an entire, sure, we’re selling loads.
If we ignore Black Friday and simply take a look at your regular annual gross sales, upwards of 32% of quantity is bought at a reduced value all through the common of the yr, not even Black Friday.
In order 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 go away it there. Thanks a lot to your time. That was Kobus Eksteen from NielsenIQ.