Black Friday & Cyber Monday sees strong support for local retailers

South African consumers defied economic challenges to participate in the Black Friday and Cyber Monday shopping frenzy, with online retailers like Take-a-lot and Payfast reporting record spending. Despite facing a cost of living crisis driven by inflation and interest rate hikes, shoppers flocked to bag their favorite deals, indicating a resilient consumer base. Tumelo Ramugondo, Head of Credit Card at Standard Bank South Africa, and James Williams, Marketing Manager and Data Analyser at Wonga, discussed the spending patterns and trends observed during this shopping extravaganza. The Black Friday spending spree saw remarkable transaction amounts, with Payfast processing a single transaction exceeding 600,000 rand and Take-a-Lot reporting a transaction close to 370,000 rand. Ramugondo shared insights from Standard Bank, revealing the largest transaction observed on Black Friday reached an impressive 900,000 rand, primarily for essential items like agricultural goods and water storage facilities. The number of transactions surged compared to the previous year, but the focus remained on essential purchases like groceries, clothing, footwear, and dining out. Williams discussed consumer spending patterns from a credit perspective, noting a cautious approach to spending, with over 80% of transactions made using debit cards and checking accounts. While there was demand for credit, the shift from debit to credit spending remained relatively stable. The average festive spend basket showed a slight decrease year-on-year, emphasizing a preference for essential items. Additionally, a significant portion of consumers relied on loans and credit cards to navigate the festive season. The discussion touched on the growth of online transactions, which witnessed a substantial increase during Black Friday and Cyber Monday. Ramugondo highlighted the surge in online spending, particularly on Cyber Monday, underscoring the shift towards e-commerce. The adoption of mobile payments also saw significant growth, reflecting consumers' preference for electronic transactions. Despite economic pressures, consumers across income segments displayed similar spending behaviors. Luxury item purchases declined, with a shift towards essential goods indicating financial strain on households. The absence of furniture purchases, a notable category from the previous year, highlighted changing consumer priorities. Ramugondo emphasized the need for economic improvements to alleviate consumer burden in the future. Overall, the Black Friday and Cyber Monday shopping events in South Africa showcased consumer resilience amidst economic challenges. The data presented by industry experts revealed shifting spending patterns towards essential items, cautious credit usage, and a growing preference for online shopping. As the economy grapples with inflation and high interest rates, understanding consumer behaviors becomes crucial for businesses navigating the retail landscape.