THIS YEAR’S Black Friday was likely to produce more winners than losers as retailers compete for the available disposable income in a tough economic environment.
Digital company Connect Group said 2020 had been a very tough year, particularly for retail and nonessential retailers. Chief executive Steven Heilbron said that the disruption had forced retailers to relook their business models.
Heilbron said there was still a fair amount of disposable income available that a retailer had to fight for. He said the group had advanced close to R600 million to retailers to compete and to position themselves have an online presence, improving store shopping experience by putting in coffee bars and entertainment, creating pick-up and drop-offs capabilities for their goods, extending hours and extending sales.
Heilbron said some managed to position themselves to take advantage of Black Friday. “There are some retailers who have done incredible work to reposition themselves, re-shaping their business models to get the attention the available spend,” he said.
“On the other hand we have people and businesses that do not respond well to change and have just continued to do what they were used to doing. The difficulty there is that there is going to be a group of people who have not responded adequately to the challenges.”
Lulalend (an online SME lender) co-founder and chief executive Trevor Gosling said that with a slow improvement of consumer confidence and spending, small and medium businesses remained hopeful that Black Friday and festive season trading would give them a boost to financially recover from the national lockdown.
Gosling said one of the most notable shifts had been the phenomenal growth in e-commerce. He said Salesforce’s Global Shopping Index showed a 71 percent increase in online spending in Q2.
“Throughout the value chain, industries have had to reinvent or evolve in order to stay up to date with the demands of its customer base,” said Gosling.
Mergence Investment analyst Lulama Qongqo said it was difficult to tell who the winners and losers would be because consumer spending patterns had been abnormal this year with few bonuses paid.
She said the economic environment remained tough with no changes expected going into next year because companies were tightening their purse strings.
“So I think the winners will be those that can make a fair number of sales over the whole festive season as opposed to Black Friday only, because I think consumers will be slow to part with their cash as they assess their financial stability more closely.
“If I take a wild guess, I’ll say those that offer value for money will win many wallets this festive season. We all need to make our shrinking wallets stretch further,” said Qongqo.