Black Friday, the American deep discount shopping phenomenon that has gained traction in South Africa over the past two years, is right around the corner.
This year, it falls on Friday, November 23 - before the official pay day date (the 25th) of many South Africans.
Fortunately because pay day falls on a weekend, consumers should expect their salaries to come through on 23 November. Just in time for Black Friday.
“The payroll procedure for most companies is to pay their employees on the last working day before the 25th of the month to ensure funds reflect in people’s accounts before the end of the month when most debit orders are deducted," said Ethel Nyembe, Head of Card Issuing, Standard Bank SA.
"In November 2018, payroll runs will be done on Thursday the 22nd and funds will reflect in people’s accounts early on Friday morning. This means that consumers will be able to take advantage of specials that will be available on the 23rd."
Given the tough economic environment and pressure on households, it has become crucial for South Africa retailers to capitalise on the payday period.
Guy Hayward, CEO of Massmart - which owns Game and Makro - recently told Reuters that, given all the pressures on household incomes, South Africans "only have money for about three to five days of the month when they get paid”.
Many retailers are either extending their Black Friday sales period, or starting earlier to accommodate payment dates.
According to TakeAlot’s CMO Julie-Anne Walsh, South Africa’s largest online store is expecting a second spike of purchasing as salaries start coming in. This is one reason why they have extended their Blue Dot Sale Black Friday specials through to November 27th.
“Customers who can't shop before payday can take advantage of great deals once their salary comes through,” said Walsh.
Kali Moahloli, commercial head for South African market insights at the international research firm GfK, says the payday gap shouldn't affect sales. Their past data of Black Friday shows consumers are willing to buy products even before their cheques hit the bank accounts, especially when it comes to electronics.
In 2016, Black Friday fell on payday - while in 2017 in fell on the 24th. Yet Gfk’s data showed a massive increase of 47% in TV unit sales and 63% in smartphone unit sales over that time.
During the week of Black Friday 2017, TV unit sales shot up by 300%, from 14,200 to 56,500. Also, cellphone sales were 66% higher than average during the Black Friday at 337,200 units, with a further 322,000 in the week of Cyber Monday.
“The two-day gap between Black Friday and payday is certainly something brands should bear in mind as they roll out their specials and promotions. While some consumers will be spending on their credit cards or will have saved money to spend on the day, many others will need to wait until there is money in their bank accounts before splashing out,” said Moahloli.
According to Walsh, shifting the Black Friday date to a later weekend is not feasible as the association with the American sales day is already deeply entrenched in South Africa.
“In the connected world we live in, South African online shoppers take advantage of Black Friday deals offered by both local and international retailers and so the post-Thanksgiving sales day is here to stay,” said Walsh.
More on Black Friday Deals:
Also from Business Insider South Africa: