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Black Friday sales moving beyond retail

Adam Zuchetti
Adam Zuchetti
27 November 2019 4 minute readShare
Black Friday sale

This week’s Black Friday sale is tipped to be a sales bonanza for Aussie businesses, and it’s not just retailers looking to boost revenues in the lead-up to Christmas.

Discount department store Kmart and Amazon Australia are among big-name retailers to get into the spirit of Black Friday, but it’s not only retailers that are now getting in on the US-led shopping bonanza.

Service providers including Lawpath are offering Black Friday specials on their offerings. Finder.com.au also lists other service providers including PureVPN, Virgin Australia and RateSetter as getting in on the action. Finder is anticipating Aussie shoppers to spend $3.9 billion on Black Friday sales this year.

New analysis from point-of-sale software provider Vend and pollster YouGov is helping to shed some light on why Australian businesses of all sorts are increasingly looking to partake in the Black Friday sales.

Vend found that across the 3,462 retailers using its platform, over the past three years, independent retailers have seen revenues surge by a third.

Indeed, on Black Friday last year, participating retailers took in an average of $3,082, more than double their average daily estimate of $1,261.

According to the software provider, Aussies spent more than $10.6 million on Black Friday in 2018 — a 16 per cent surge on the same day in 2017.

“While Black Friday has traditionally been synonymous with large US retailers, we have observed that there has been a growing cultural shift towards shopping independently on Black Friday in Australia in recent years,” Vend APAC managing director Dave Scheine said.

“The increase in the amount of customers and money generated by independent retailers over the last few years is proof of the changing habits of Aussie consumers.”

And, Mr Scheine suggested, the trend is more of a boon for SMEs than retail giants.

“Today, shoppers are placing a far greater emphasis on local high streets and retailers, who offer bespoke products and unique in-store experiences,” he said.

“With campaigns such as Buy from the Bush in New South Wales, we’re seeing growing momentum and sentiment for supporting local retailers. These independent retailers are the small business[es] across Australia that add a diversity and charm to our high streets.”

Likewise, the Australian Retailers Association’s (ARA) Russell Zimmerman said that Black Friday could be a windfall for local businesses.

“Australians are already searching for this year’s Black Friday event, according to Google Trends, after ‘Black Friday’ searches soared by 50 per cent from 2017 to 2018,” he said.

“We hope retailers are ready.”

The ARA, in modelling done with Roy Morgan, has tipped Australians will spend close to $53 billion in the six-week period between 14 November and Christmas Day, including Black Friday.

What are shoppers most interested in?

While Black Friday is often seen as being synonymous with discounts on electronics, sales data suggests other products being offered with a discount are increasingly attractive to bargain hunters.

According to the Vend data, cosmetics, beauty supplies and perfumes saw the biggest uplift in Black Friday sales in 2018 from the previous year, surging by 70 per cent.

Furniture stores saw the next highest surge, at 60 per cent, closely followed by men’s clothing (up by 57 per cent).

Similarly, the ARA has forecast pre-Christmas sales growth, including for Black Friday, will be highest away from electronics.

It expects to see a 3.7 per cent lift in sales in “other retailing”, which covers a range of miscellaneous goods.

Spending on food is projected to rise by 3.2 per cent, and on clothing/footwear/accessories by 3 per cent.

Household goods and department stores are in for a tougher time, however, if the ARA’s predictions ring true, with much more modest sales increases of 0.6 per cent and 0.5 per cent, respectively.

Hospitality is expected to enjoy a boost of 2.3 per cent.

‘Join forces to take on the big guys’

Groupon’s APAC boss, Steve Traplin, is urging SMEs to join forces in order to take on the big end of town and maximise their opportunities to drive business as part of the Black Friday sales.

“SMEs can still expect stiff competition from larger businesses, especially with challenges like lack of manpower and leaders often burdened with becoming a jack of all trades. But failing to prepare for online sales can really hurt small businesses during this season,” he told My Business.

“Thankfully, technology has really helped to level the playing field, with plenty of online tools for small businesses to leverage. Platforms such as Google, Facebook and Groupon are helping SMEs to reach new audiences by democratising access to information.

“Smaller businesses are often better placed and more agile to respond to customer information they receive from these platforms and can adjust their Black Friday promotions to reflect customer demands.”

According to Mr Traplin, SMEs can better compete with larger businesses if they “build strength in numbers by collaborating with other businesses, giving them the ability to grow quickly and to scale as needed in this busy period, as well as distribute losses, like their larger counterparts”.

“Examples of collaborations include creating a joint online gift guide or sharing your products or services on an online marketplace, making your products and services visible to a significantly larger customer base,” he said.

Not everyone convinced Black Friday is a good thing

Despite commentary from the retail industry that Black Friday is a good way for Aussie businesses to boost sales volumes, there have been concerns that deep discounting is actually doing more harm than good.

Accounting firm Deloitte recently expressed concerns that the much-hype sales are eroding margins and teaching consumers to expect heavy discounts.

Even Vend itself expressed disappointment at the sales figures from last year immediately after the Black Friday sales in terms of the benefits for independent retailers.

At the time, Mr Scheine said that “there have been reports that [the] Black Friday weekend has now become the biggest trading period of the year. This may well be true for big-box stores and major online retailers, but our data shows this doesn’t necessarily translate for smaller businesses.”

‘Beware scammers’

According to Australia’s competition watchdog, scammers are also looking to cash in on Black Friday, either by imitating stores with fake websites and online stores or through false classified postings.

“Scammers often try to take advantage of people doing their Christmas shopping including in the upcoming Black Friday and Cyber Monday sales,” said ACCC deputy chair Delia Rickard.

“Reported losses have tripled over the last three years, and it is concerning that losses from this year are already so high.”

She added: “Some of the most commonly reported products that scammers are attempting to sell this year are shoes, smartphones and tickets to events, with losses from these items so far exceeding half a million dollars.”

Black Friday sales moving beyond retail
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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