Are Black Friday specials useful for growing a small online business in SA? 

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Are Black Friday specials useful for growing a small online business in SA? 

A compelling delivery cost/offering may be the better option to attract customers and spike turnover

Cape Town, 9 November 2022 – There’s no two ways about it – Black Friday is a shopping frenzy.

Whether it’s in the malls or online, customers queue up in huge numbers to snap up discounted goods ahead of the festive season.

Data from payment services provider PayGate showed a 43.4% year-on-year increase in the volume of transactions for Black Friday 2021 in South Africa, and it’s now estimated that 47%, or 18.5-million people, of the country’s adult population takes advantage of these sales each year.

But while this traffic is obviously a major win for the big retailers, it might not always be the case for small and medium enterprises (SMEs).

Where the big retailers can easily afford to slash prices, small businesses have to be careful with their sales days. By selling items at vastly reduced prices their profit margins will obviously take a knock.

The other obvious drawback for SMEs is that they are competing with thousands of other businesses offering Black Friday deals, among them the “Big Boys” of retail. These companies have enormous marketing budgets that enable them to put deals in front of consumers everywhere they look, be it on TV, social networks or the print media. On top of it, the giant chains now advertise specials throughout the month of November, not only on November 25.

In other words, for SMEs to have a great Black Friday they have to offer something different to stand out from the crowd.

One way to do this is to pick up on the growing trend of social commerce.

What’s so appealing about selling on social networks like Facebook and Instagram is that it’s cheap and anyone can do it, from home industries to township spaza shops. Not only can you tailor your page however you want, but It also allows you to build up a community of contacts.

Another way to get consumers to focus on your business on Black Friday is to emphasise your delivery options on your website or social media page.

Seamless last-mile delivery is a deal breaker when it comes to keeping shoppers happy, and studies have shown that consumers will take their business elsewhere if they’re not satisfied with delivery of their orders.

While home deliveries are still popular, there has also been a big shift to the highly convenient click & collect model, where shoppers place their orders online and purchases are then delivered to a store near them for pickup.

Pargo reduces delivery costs through consolidated deliveries to its more than 3,000 Pickup Points around South Africa, including in areas where traditional couriers don’t deliver to door addresses. This model is especially useful to customers in far-reaching areas and townships who can now shop online and still have their orders delivered to them, no matter where they live.

It’s worth keeping in mind that the final part of delivery accounts for 53% of the total cost of shipping, according to a report by Irish ITC consulting specialist Accenture. Obviously this cost is usually pushed on to the consumer, which is why click & collect is a better delivery option in terms of cost savings. The click & collect model allows for a 100% first time delivery rate, unlike home deliveries which on average

At the end of the day Black Friday is all about saving people money on the goods they want, so it’s important that SMEs follow this line of sale while at the same time being careful not to become stuck in a financial rut.

ENDS
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About Pargo

Pargo is a Cape Town-based tech company that solves the challenges of last-mile logistics through its smart logistics platform and fulfilment solutions, which are anchored by a vast, nationwide network of thousands of Pargo Pickup Points. Pioneering Click & Collect back in 2015, Pargo continues to develop their technology and processes to make fulfilment solutions fit for the African logistics landscape, including Home Delivery, Returns and micro-warehousing. Clients that use their tech include Edgars, rain, TFG, Cape Union Mart, Clicks and HomeChoice.
Lars Veul is the CEO and co-founder of Pargo, a smart logistics platform that simplifies online delivery through its tech-enabled network of Pargo access points. Prior to starting Pargo, Lars was part of the founding team at Groupon, where he headed up the online marketplace, which exposed him to the challenges of online delivery. He is also an Alibaba eFounders fellow and is part of Endeavor.

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