Black Friday falls on 25 November, just in time for payday. But is the spending event all it is cracked up to be?
Speculation remains about whether the “discounts” advertised are actually such. In a survey of more than 1 600 customers by Payflex, a platform that allows consumers to buy now and pay later, 18% believed that Black Friday was a marketing trick and that the same deals or better pricing could be found at other times of the year.
Laurian Venter, a director at online marketplace OneDayOnly.co.za, said that globally, Black Friday is all about discounts, some as high as 99%, whereas in South Africa consumers are accustomed to discounts of 20% to 30%.
“Sometimes an offer seems too good to be true because it actually is. To ensure that the deal they are getting on a product is actually a discounted deal and not a ‘fake’ offer, shoppers are advised to perform their research before Black Friday comes around,” Venter said.
Prices artificially inflated
She added that “sometimes items appear to be heavily discounted, but upon closer examination, customers will note that the ‘original pricing’ may be artificially inflated, and the discount is not a fair reflection of the item’s value”.
Casparus Treurnicht, a portfolio manager at Gryphon Asset Management, said Black Friday simply entices consumers to spend more than they should on goods that they don’t need or cannot afford.
“It is a sales tactic used by the retailer to lure customers through the doors and then, once they have them, they sell additional items at confusing price points. I seriously think the consumer would be better off holding back on splurging – and keep shopping habits conservative in this inflationary environment,” Treurnicht said.
Ethel Nyembe, the head of consumer high net worth at Standard Bank, said the consumer will need to keep a discerning eye on deals and be discount savvy. This means knowing the original price of an item will help them decide whether they are truly getting a bargain.
“By deciding in advance how much to spend [and sticking to it], the consumer can better budget for those deals that do appear lucrative,” Nyembe said.
Even though it seems as if Black Friday is not all it is cracked up to be, consumers will probably take advantage of sales and discounts, because they have been feeling the pinch with rising inflation affecting food, fuel and electricity prices.
On Wednesday Statistics South Africa announced that inflation for October rose to 7.6% year-on-year, up from 7.5% the previous month.
The main drivers were food and transport costs. Food and non-alcoholic beverages increased by 12% year-on-year, with the oil and fats category emerging as the biggest contributor to higher prices,the Mail & Guardian previously reported.
Storage facility XtraSpace said in a note that rising costs could mean that consumers are more motivated to take advantage of Black Friday deals, and will probably be looking to stock up on groceries and basic consumable goods at discounted prices.
Treurnicht said: “I think the consumer is probably becoming more desperate this year following all the inflationary headwinds that we’ve seen … I really want people to reconsider falling for this trap. The one other thing that I cannot repeat enough is that the consumer is undergoing enormous stress and this will be interesting to see how it plays out.”
According to Venter, about R17.3 billion in additional sales are anticipated during the Black Friday promotional period. This forecast represents a 6.7% increase over the Black Friday period in 2021.
Banking group FNB said its cardholders spent R2.5 billion on the day in 2021. That was 25% more transactions compared to 2020, when the Covid-19 lockdowns were in place.