27th November, 2023
Off the back of a boost from Black Friday sales, can retailers hope for a bigger Christmas trade period?
According to our latest research, three in four Australians (75%) are planning to shop during Black Friday this year.
This marks a substantial 13% increase on last year, as the cost-of-living crisis continues to make consumers price-conscious.
More than half (55%) of respondents said they were relying on the sales event to save money on Christmas shopping.
The research of more than 1,000 consumers also found one in two (52%) are concerned about managing their Christmas budget.
Price is the highest ranked factor in gift purchase decision making for 68% of respondents, followed by quality at 51%.
Forty per cent say they will pay for Christmas shopping with a credit card and 35% will dip into savings.
Four in 10 are feeling pressure to make personal sacrifices to afford gifts, with 67% cutting back on non-essential spending.
This includes dining out and alcohol, with 50% cutting back on essentials like groceries or reducing energy consumption.
Fifty-one per cent of respondents expect all businesses, large and small, to offer discounts during the Black Friday sales event.
“Between interest rates, groceries, bills, and general increase in costs, consumers are looking to make their dollar go further this Christmas with discount gift options,” MYOB’s General Manager – SME, Emma Fawcett says.
“While these large discount events can present a challenge for the smaller businesses, the good news is consumers are still looking to support local and Australian retailers.”
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Despite the pressure on finances, only 27% of survey respondents said they would be more focused on buying Christmas gifts through large discount websites such as Temu or Wish this year compared to previous years.
Forty-eight per cent said they are more focused on buying from small businesses this year.
The most popular destination for Christmas shopping is in person at Australian mainstream stores (49%), or in person at local shops or neighbourhood shopping centre (48%).
Thirty-five per cent said they will shop mostly online from mainstream Australian stores, and 29% said they would do the majority of their shopping from independent Australian stores.
The Australian Retailers Association (ARA) has tipped Aussies will spend $67.1 billion between November and Christmas Eve.
“Black Friday and the end of year festive season is vital for the revenue of many small businesses around the country,” Fawcett says.
“Consumers are feeling the pinch, but if retailers offer quality products and attractive deals they will look to shop local and support Australian businesses.”
More than a quarter of all holiday purchases in 2023 will be during the Black Friday and Cyber Monday sales.
Findings released by the ARA found online shopping traffic is up 5% but hasn’t driven a significant change in sales.
This suggests consumers are doing their research, making their own price comparisons and shopping thoughtfully and cautiously.
Shoppers are tipped to spend $6.36 billion across the four-day Black Friday/Cyber Monday weekend, up 3% from last year.
Shoppers win with increased competition, with global discounts predicted to reach an average of approximately 30%.
Retailers will also harness artificial intelligence, with 29% of online orders tipped to be influenced by AI.
ARA CEO Paul Zahra says the growing popularity of Black Friday will give retailers a much-needed boost.
“The Black Friday sales are the perfect opportunity to get a great deal at a time when every dollar counts,” he says.
“As the country continues to be gripped by a cost-of-living crisis, the importance of Black Friday will be more significant than ever before.
“We expect by the end of November more than half of the gift shopping in Australia would have been completed. It’s the season to shop early to take advantage of the promotions and have your gift list completed for a stress-free Christmas.
“Retailers are well aware of the economic pressure … and this increased competition will drive significant discounts.”
Pre-Christmas spending in 2023 is tipped to be in line with last year’s results as shoppers continue to tighten belts.
The ARA predicts $67.1 billion will be spent in the Christmas trading period (up 0.6% from 2022).
Retailers are likely already well advanced in their plans for this year’s holiday trade period. Much of that effort lies in baking in contingencies.