The result of the four days of Black Friday and Cyber Monday (BFCM) shopathon is in. The Australian Retailers Association (ARA) had forecasted shoppers to spend around AU$6 billion but in reality, Australians have spent nearly AU$9 billion, a 22% YoY increase, all thanks to retailers offering value-for-money deals and driving strategic digital engagement to boost their sales.
Bigger, better and longer deals
Originating in America, Black Friday started to gain major sales traction in Australia from 2017. It is now considered to be one of the dominant sales periods, and this year it has been tipped to be the sales event of the year, superseding 2022 Boxing Day sales, with retailers offering better and longer deals than ever before.
The $9 billion spend amount might come as a surprise to most, especially after the tough year. With 13 interest rate hikes driving up mortgages and rents, regular families have been feeling the pinch as the cost of living continues to rise.
During October, retail sales dipped 0.2% to an unexpected low from September, according to the Australian Bureau of Statistics (ABS). Analysts believe that apart from everyday groceries and essentials, customers were saving up to splurge on the holiday season purchases when there are great deals available to maximise their spending budgets. The research commissioned by Shopify also supports this, as their survey revealed that 76% of Australians reduced their expenses prior to BFCM period and a whopping 63% of respondents revealed their plan to shop during the BFCM weekend.
One of the big four Australian banks, Commonwealth Bank (CBA), also conducted their own survey paralleling similar customer sentiment. 78% of CBA respondents were saving up for the sales period to grab a bargain deal for their holiday shopping. And it seems like the retailers were listening to the market scenario, slashing their prices by 27% on average, and starting sales earlier than the usual time frame, with more than 40% of retailers beginning promotions at least 2-3 weeks early. This allowed customers a larger window to do their research in search for better bargain deals on non-essential items.
It wasn’t just big retailers or e-commerce platforms who offered lucrative promotions, even some supermarkets and banks joined in this trend, from Woolworths to Westpac and even Ikea. On Black Friday alone, the National Retail Association reported online sales to be up between 10% to 24% from last year, alongside strong foot traffic in stores.
No slow down for the Boxing Day spending predictions!
According to the Australian Retail Association, they have forecast about $1.25 billion in spending on Boxing Day itself and $23.9bn for the entire sales period, which lasts until 15 January. That is a YoY increase of 1.6%.
Partnerize saw a YoY increase in conversation rates across their partners by 70% on Boxing Day. This was followed by a steady combined increase of 39% in conversions YoY from Boxing Day through to New Year’s Day.
This indicates that despite the woes of inflation, higher cost of living, rising interest rates and a looming recession, the trading period of November to December will see Australians spending up to $67.4 billion, which is still an increase of over 1% from 2023.
Embracing a hybrid shopping experience
eCommerce seems to have stabilised in recent times, after experiencing an unexpected boom during the pandemic. Without lockdown and restrictions, more customers have returned to physical stores, but having said that, the fundamental shift that digital shopping experiences created during the pandemic is here to stay. Most households tend to shop both in-store and online during major sales events, especially during the months November to early January. The Australian Online Shopping Report conducted by Auspost revealed that in 2022, a record 6 million households shopped online just in the month of November.
In a nutshell, brick and click retailers seem to benefit more from embracing the hybrid approach, unifying their in-store experiences with eCommerce to maximise their reach. The Lightspeed research highlighted that in Australia, in-store shopping increased by 26%, while their online cart sizes were four times higher than the in-store amount. The spending spree saw online sales shooting up by 14%, 78% of them being mobile phone driven.
In conclusion, Australian marketers are left wondering whether these large sales cycles are sustainable for retailers. Should consumers expect the same cheap deals next year or will we see a correction as rate rises ease? Perhaps consumer behaviours will repeat themselves and shoppers will continue to wait for the good deals before they pull the trigger. Time will tell.
Want to learn more about peak holiday shopping insights and how you can better prepare your partnership program for the 2024 peak holiday season, reach out to us at firstname.lastname@example.org.