Which are the key takeaways from this year’s Black Friday that merchants should keep in mind for the Christmas shopping season?
Despite conservative industry predictions driven by inflation-related concerns, economic uncertainty and soaring fuel prices, this year’s Black Friday edition revealed surprising results, with numbers well surpassing previous years. This once again confirms higher confidence among consumers in online shopping, coupled with increased interest in one of the most important shopping events of the year.
Read more to find out how this year’s Black Friday edition looked like in top growing countries across the globe and how to leverage on key insights for December shopping and beyond.
High-growth markets across Europe, Africa and Latin America are definitely top e-commerce destinations for merchants across the globe, with consumers adhering more and more to online shopping not only in peak seasons, but as part of their daily lives. Black Friday used to be that moment of the year when discounts boomed, online shopping experienced the highest growth and merchants witnessed ascending revenues. Was Black Friday still the biggest e-commerce event in 2022? Let’s find out.
In South Africa, the total amount spent increased by almost 60% since the 2021 Black Friday, while the average basket value also registered a 54% growth. Bigger ticket items were the main shift, with consumer spending jumping by 208% at the midnight hour, in comparison to last year on Black Friday. Additionally, “we saw a 408% increase in the usage of tokenized cards compared to last year, indicating the rising importance of easy checkout flow with regard to speed, trust and comfort”, according to Karen Nadasen, CEO PayU South Africa.
In Romania, transaction volumes increased by 14%, while the number of transactions increased by 20% on a year-over-year basis. The average cart amount on Black Friday was USD 123. Similarly, in the Czech Republic, consumers spent 18% more in online stores paying through PayU and the average shopping cart was higher by 12% than on a usual day.
Overall, the PayU Latin American markets witnessed an almost 40% increase in total payment volumes, as compared to last year’s Black Friday. At a country level, Argentina is the regional leader (with a 112% total payment value growth year-over-year), followed by Panama (66%) and Brazil (52%). In terms of online transaction volumes, Chile and Colombia registered the highest growth as compared with 2021, with 51% and 40% respectively.
Notably, Turkey saw an almost 146% increase in transaction volumes on November 25th, while the number of transactions jumped by 27.1%, as compared to the previous year. Last but not least, during Black Friday (November 25th -27th), India saw a 30%-40% jump in transaction volumes compared to 2021.
The insights above point to the ongoing opportunities when it comes to e-commerce development and growth in emerging economies during the peak sales season. Also, online shopper behaviour this Black Friday has revealed some key lessons for growth-minded merchants ahead of Christmas, as online shoppers aren’t ready to put away their wallets just yet.
There is still a goldmine of sales opportunities in December that online merchants can leverage to increase their online revenues. In fact, this year, despite global uncertainty, consumers are eager to get into the holiday spirit.
According to an Ipsos study carried out across 12 countries, 85% of respondents feel excited about the end of year celebrations, with a third saying that they are even more excited than in 2021. What’s more, between November 1 and December 31, online shoppers globally are estimated to spend almost USD 210 billion on holiday shopping only.
Against this backdrop, which are some key takeaways that merchants should keep in mind for the Christmas shopping season?
For a successful holiday sales season, merchants must consider how preferences are changing with the wider macroeconomic environment. Amid the rising cost of living, Buy Now Pay Later (BNPL), instalment payments, and other alternative credit products are becoming an increasingly powerful part of the e-commerce landscape, particularly in emerging markets. In South Africa for example, during Black Friday BNPL saw a 255% growth since last year, cementing itself as a valuable option for consumers.
Customers will continue to prioritise purchases from merchants that are equipped with the right payment mix and offer streamlined checkout journeys.
Therefore, merchants should always provide payment methods that online customers prefer and enable the local currencies in which consumers are used to pay. By offering a range of relevant global and popular local payment methods including BNPL, digital wallets, and other alternative payment methods, business leaders can improve conversions in local markets and successfully expand beyond geographical limitations.
Additionally, the delivery processes play a key role, so deals such as free shipping and rapid delivery are effective at making merchants stand out from their competitors by shipping the right product to the right customer on time. Compared to last years, consumers expect to see at checkout multiple delivery options that will offer them a cost and time flexibility of either picking up their delivery at a certain nearby-home location, or even picking it up in store. The more options, the higher consumer interest in successfully completing a purchase.
In 2022, the shopping cart abandonment rate across all e-commerce industries was 69.9%, according to research by the Baymard Institute. Unexpected costs, such as shipping costs were the top reason for cart abandonment during checkout for 48% US online shoppers.
The closer we get to Christmas, this rate could spike even higher, especially once customers find out their item won’t arrive before Christmas or their preferred payment method is not available at checkout. Alongside with a streamlined delivery, transparency on when the products will arrive at destination, as well as open communication on any expected delays, together with a clear refund policy are key in unifying the bridge between a one-time shopper and a returning customer.
In the e-commerce space, the Black Friday and Christmas-related boom also brings hackers and data breaches onto the scene. That’s why online merchants should find the right partner that can help them address the challenge of keeping fraudsters out, securing the checkout process, protecting buyer data as best as possible, and thus enabling a smooth payment process.
On the consumer side, with the cost of living rising, concerns related to payments fraud are higher than ever, with overall increased expectations for a more secure online buying experience. And rightfully so: a recent study on digital payment fraud in high growth markets found that 90% of respondents (business decision makers) experienced an increase in online fraud over the past 12 months.
Technology (and analytics in particular) has advanced to a point where gaining real-time insights to unlock value from data is no longer impossible. Merchants need to use payments data to gain greater visibility and insights into consumer payments preferences and online shopping behaviour across markets.
Understanding how customers navigate around the merchant website, what products interest them or what types of discounts encourage them to make the purchase can significantly help brands deliver personalized digital services and experiences, while also increasing conversions and enabling new revenue streams.
When looking at emerging markets and beyond, the sales holidays remain among the biggest events of the year for growth-minded e-commerce leaders, as they continue to power e-commerce growth and highlight the immense opportunity for brands to expand and diversify their geographical reach.
Traditionally a merchant’s most lucrative selling retail date, Black Friday always gives us a good indication of the payment trends and customer e-commerce journeys to pay attention to not only throughout the Christmas holiday season but also in the years to come. With the buying experience no longer a linear journey, in order to play the winning card in the e-commerce game, online merchants need to constantly align with consumer’s needs, experiences, expectations and – why not – sprinkle a bit of extra magic to maximise their sales potential.