Australians spent $6 billion on Black Friday and Cyber Monday sales last year and despite rising inflation, retailers are anticipating another busy trading period from Friday.
Core items:
- Black Friday is now the biggest trading period for Australian retail
- ARA forecasts $6.2 billion in sales from Black Friday through Cyber Monday
- Australia Post delivered 52 million parcels between Black Friday and Christmas Day last year
“Black Friday and Cyber Monday have become very important to the retail industry,” Paul Zahra, chief executive officer of the Australian Retailers Association (ARA), told The Business.
“Actually around 25 percent of the turnover from all Christmas shopping [period] will be done in this one week.
“So it’s a big event that has US heritage, but it’s become a global phenomenon and it’s really appropriate for Australian consumers right now.”
Black Friday shopping events began as long weekend Thanksgiving sales in the US, and Cyber Monday was later added as an online version.
Now they’ve joined forces for a four-day sale-athon, though many retailers start discounting up to a week before Black Friday.
ARA expects shoppers to spend about $200 million more than the same period last year, taking retail to $6.2 billion between Black Friday and Cyber Monday.
Historically high inflation is not expected to impact sales
Although inflation is at its highest for more than 30 years, retail numbers show consumers are still shopping more.
The latest data from the Bureau of Statistics showed an increase in spending in September, partly due to higher prices.
But sales volumes were also 10 percent higher in the September quarter of 2022 than in the same period in 2021, when millions of homes in the southeastern states were under lockdown for months.
Data like this gives retailers like online womenswear store St Frock confidence that this super sale phase will be strong.
“Black Friday and Cyber Monday is the most exciting time of year for St. Frock,” Founder and Chief Executive Officer Sandradee Makejev told The Business.
“This is where we measure ourselves against our best numbers – it accounts for 7 percent of our annual sales.”
The company expects to sell 35,000 items and generate approximately $2 million in revenue.
Large trade figures are not only expected in fashion.
“Black Friday is huge, we would expect Black Friday to be over 500 percent up on our average days,” Ruslan Kogan, the founder and CEO of Kogan.com, told The Business.
He’s confident consumers will be shopping a lot now looking for a deal.
“We’re a values-based retailer, we’re all about efficiency and we’re trying to drive costs down for customers and they’re starting to appreciate that more and more in this current inflationary time where there’s a lot of cost of living pressures.”
Mr. Zahra expects all retailers will have sales to attract consumers.
“Every retailer goes out with big deals and big offers to entice customers to shop,” he said.
“While we expect Australian consumers to be affected by the pressure on the cost of living, we have yet to see them stop spending.
“It’s shopping week.”
The trading event of the year
Analysis from ANZ shows that Black Friday is now the busiest time for retailers in Australia.
But the last two shopping events have coincided with the end of COVID-related lockdowns, where pent-up demand has seen consumers open their wallets wider than usual.
With inflation now above 7 percent, ANZ senior economist Adelaide Timbrell told ABC News this weekend’s sales will be an indicator of consumer behavior in the coming months.
“Black Friday strength or weakness will give us some clues as to how quickly households will rein in spending in response to rate hikes.”
Ms. Makejev expects the improvement in her trading results for this fiscal year to lag behind the COVID years.
“In our first year with COVID we had 100 percent growth and in our second year we had 20 percent growth, but this year we expect 5 percent growth,” she said.
“We have started to see a slowdown [the second half] last fiscal year, starting in January, that most e-commerce and technology companies experience.
“Nobody was expecting the slowdown but it’s great for brick and mortar retailers, they’ve been able to reopen and have some of the love back and I’m more than happy to give it to them because I’ve had 100 per hundred growth in that first one year of COVID.
Australian Post will deliver millions of parcels
The national delivery service expects this year’s Black Friday sale period to be less chaotic than the last two as pent-up demand won’t be as strong.
“This year is a very different year because you might remember last year we came out of lockdown, 15 million Australians were on lockdown on the east coast and everyone was buying online and it just opened,” said Australia’s executive general manager Post. Customer and promotion, Gary Starr told The Business.
Despite the opportunity for more personal retail, Mr Starr still expects Australia Post to deliver more parcels this year than last year.
“In-store shopping is now available this year and we’re obviously seeing more of it so e-commerce volume has slowed down a bit, but we’re still expecting very modest growth of about 3 percent over the same period of the previous year.”
Between the Black Friday sales and Christmas Day last year, Australia Post delivered 52 million parcels.
“We start planning for the peak period around April or May every year and of course we have a lot of experience with large volumes now for two years,” said Mr. Starr.
“We’re recruiting 6,000 additional team members, we’ve added a number of processing sites across the country, giving us an additional 2.5 million package processing [capacity] per day and additional planes and additional vans and trucks.
“We are planning around the volumes we anticipate and we believe we have the capacity to deliver on the dates we have set for Christmas.”
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