Black Friday (23 November 2018) is typically associated with the start of the festive season shopping frenzy as consumers rush to get the best deals from retail outlets and online stores. But how important is having alternative digital payment solutions available to create a more enabling shopping environment?
Those sceptics who feel the day is only a US institution that has very little local relevance should reconsider their views. Since arriving in South Africa in 2014, Black Friday has grown significantly over the years. Shoprite Checkers reported they served more than one million customers on that day four years ago. Today, 87% of South Africans are confidently aware of Black Friday and are willing to spend over R1,600 on purchases. Last year, i-Pay saw the value of transactions processed by its merchants increase 10-fold over Black Friday weekend compared to its previous average, and the volume increase five-fold. In challenging economic conditions, this is not something to blindly dismiss.
But what can retailers (both physical and online) do to prepare for the expected onslaught of sales? Barring marketing campaigns and having great product deals available, there needs to be an environment that makes it easy for consumers to complete purchases. And with the festive spending season going until January, there are clearly opportunities to be had to boost the financial bottom-line.
Preparation for a successful Black Friday is key. This is not only limited to stock availability and innovative bundles. Retailers must also think about the customer journey and how they will experience making a purchase. This talks to both store and online environments and must be as smooth as possible.
With so many retailers offering competitive deals, the way to effectively differentiate is by empowering the customer from the moment they go to the store through to the point where the purchase is completed. And while many tend to focus on teaser campaigns, redesigning store layouts, and other marketing initiatives, the point of purchase often falls by the wayside.
One of the most effective ways of changing this is to provide customers with as many payment options as possible. This is especially true in a country like South Africa with a large unbanked population, and a high percentage of people accessing online shopping via their mobile phones.
In addition to all the usual suspects, businesses need to be more open to alternative payment solutions. This is where Instant EFT (through platforms like i-Pay) become imperative. By foregoing the limitation of online transaction requiring a credit card, Instant EFT directly links the shopper to the seller. Furthermore, no registration is needed, and no personal details are stored by the provider.
This makes the transaction a more fluid process with goods dispatched as soon as the payment is made. No more waiting for funds to clear or proof of payments to be sent. In this way, more consumers can transact and experience Black Friday for themselves.
Furthermore, Instant EFT has the additional benefit of being available to any mobile user. Naturally, the retail store needs to have a mobile-friendly site to further drive traffic to its deals. Once that is done, giving consumers the option of using this alternative payment method will result in fewer abandoned shopping carts and a more integrated customer experience.
Even better, the response time using a platform such as i-Pay is virtually instantaneous. In other words, there are no long delays that can potential time-out transactions using more traditional payment methods. This means businesses can focus on stock and store management and worry less about the back-end financial issues.
Instant EFT offers another advantage over traditional payment solutions – the providers are not reliant on Switch, the automated clearing house that connects card machines to the banks. Providers like i-Pay go direct to the bank, which means if Switch gets overloaded and goes down, as it did in 2017, merchants have an alternative that isn’t plugged into the same infrastructure platform.
i-Pay is expecting to see an increase of between 300% and 400% in both transaction values and volumes this year, and has scaled up its infrastructure accordingly. Some retailers have kicked off their Black Friday offerings, and transaction values and volumes have already started to rise.
All told, Black Friday creates the perfect foundation for businesses to grow. People of course do spend more on the day buying things they don’t need but i-Pay’s statistics show that the increase in volumes experienced over Black Friday weekend didn’t drop back to previous levels afterwards. They reset to a higher baseline, and have grown since. For retailers, this is a good sign of demand – they just need to have the payment systems in place.