Black Friday mania takes the wind out of the pre-Christmas rush
Black Friday broke records, but shoppers were buying Xmas gifts, so the usual week before Christmas rush is suffering, and so are margins.
The popularity of Black Friday and Cyber Monday sales have taken the wind out of the week before Christmas rush for online retailers, according to Australia Post’s general manager of parcels and express services, Ben Franzi.
After an enormous trading weekend at the start of December saw e-commerce sales increase about 39% year-on-year, Franzi tells SmartCompany the customary week before Christmas sales peak, typically occurring around 17 December, has flattened out this year.
“We saw a lot of this Christmas peak shopping brought forward into the Black Friday sales period,” Franzi says.
E-commerce sales growth is tracking at an average 10-12% year-on-year this week, Franzi says, far below the 30-40% growth peaks experienced in previous years in the lead up to Christmas.
“We’re not seeing that second peak,” Franzi says.
Franzi has a better view than most of e-commerce shopping trends at this time of the year, perched at Australia Post headquarters, he has visibility over the largest parcel delivery network in Australia.
Black Friday and Cyber Monday sales, which this year ran into the first few days of December, were a massive hit with Aussie shoppers this year, more so than even 2018.
The week after Black Friday broke Australia Post records multiple times, with Monday, Tuesday and Wednesday all recording unprecedented parcel volumes.
Franzi says small traders, in particular, got in amongst the action this year, slashing prices to compete with larger chains.
But with shoppers now holding back in the lead up to Christmas Day, a trading week where retailers are usually able to move product at close to full margin, there are profit implications on the horizon.
“They’re not getting this second wave of higher-margin occasion buying,” Franzi says.
What about Boxing Day? Typically the biggest day on the annual retail calendar for bricks-and-mortar retailers.
Franzi thinks the influence of the post-Christmas shopping spree will wane again in 2019.
“There’s always been a historic view that Boxing Day had some of the biggest discounts, that’s lessened recently,” Franzi says.
“People aren’t seeing the same level of discounts on Boxing Day.”
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