New spending data shows Kiwis spent $346m in-store this Black Friday, a 3.9 per cent decrease on last year but some retailers pulled through with positive results.
E-commerce site Mighty Ape had its biggest trading day in history with sales up 50 per cent on last Black Friday, according to chief gorilla/executive Gracie MacKinlay.
MacKinlay told the Herald Black Friday has surpassed Boxing Day as the company’s biggest sales day of the year.
She said the company started the promotion on Thursday but shoppers still waited for the fanfare of Black Friday shopping.
“Sales on Friday were up 20 per cent on Thursday,” with the average customer basket size (2.3 items) also up 5 per cent on last year and customers purchasing one item every 3.5 seconds on average.
“It comes down to people shifting to shopping online. We saw a bump in sales, so people are appreciating the benefits of shopping online,” she said.
MacKinlay said convenience is a major pull for customers as online retail allows for easier price comparisons and lets people avoid queues and traffic.
“I think all retailers were banking on Black Friday to be the biggest sales day for online and bricks and mortar stores. Customers can rely on retailers for the best deal,” she said.
However, Consumer NZ’s Abby Damen said its research showed actual Black Friday deals weren’t much of a bargain but more “persuasive” marketing.
“The proportion of bargains to bogus is low,” she told the Herald.
“We wanted to find whether shoppers would get a meaningful discount.
“You’re going to be looking for the bright, colourful marketing that suggests you’re getting a discount. We are more vulnerable and the best thing a consumer can do is do their research.”
She said tools like PriceSpy which compares product prices around the county can help consumers stay on top of how much they’re saving.
Retailers feeling the pinch
Retail NZ’s Carolyn Young said retailers faced further setbacks this Black Friday with general sales down 10 per cent however, “some brands have done better than others”.
“Not everyone had a decline but a majority have had a downtrend.”
Economic headwinds combined with a lag in Kiwis experiencing economic hardship have hit retailers hard this year.
“In recent months, card transactions have been declining. Whilst we have a new Government, it doesn’t mean people have more money in their wallet.”
Young said retailers faced the challenge of customers being more strategic in where they spend due to a drop in discretionary income.
“What we’re seeing is retailers had to start Black Friday sales early to get people in the door, but not everyone had the capacity to have sales earlier.”
Young said factors such as a tight labour market, increased freight costs and the cost of living crisis had increased operating costs for retailers.
“It has meant that it’s critically important to get a boost in sales now to make sure businesses are able to survive to next year,” she said.
Young said many retailers rely on a strong Black Friday and Christmas period: “This quarter’s sales give you a buffer to get through the quiet period. If retailers don’t see good sales in the Christmas period, they won’t survive until next year.”
Smaller smaller businesses may have more closures as a result.
Black Friday innovation
Clothing retailer Ruby also saw a sales boost, with Black Friday sales up 10 per cent on last year.
General manager Emily Miller-Sharma said this was the first year the company participated in the sale but wanted to do it with a positive environmental impact.
“For us to be up on last year in a crucial time in trade is quite a bonus because retail trade has been tough,” she told the Herald.
Miller-Sharma said the company rolled out its Take B_ack Friday initiative which encouraged customers to bring back a Ruby item for resale.
“We got back over 2600 pieces. We were hoping for 1500 so this was good.”
“We worked out resale price based on the condition, popularity and online peer-to-peer prices of a garment and offered customers 40 per cent of the resale price as a voucher. Then we put the garments into our Newmarket store for resale.”
She said the programme was a success with the sale rack still available at their Newmarket store until Christmas to see how sales measure up on a regular day.
“We decided to launch Take Back Friday because we knew there would be a lot of talk about Black Friday in the marketplace, media and online and we wanted to use that to show where the industry could be.
“The American side of it makes us feel like it doesn’t belong to us. With the cost of living crisis, we were aware that there were a lot of people looking for a way to buy something new for themselves at a lower price.”
Alka Prasad is an Auckland-based business reporter covering small business and retail.