Kiwi retailers can no longer count on a busy December period and should play the long game when it comes to maximising sales in the Spring/Summer holiday season. This means shopping events like Black Friday are now as much a part of the Kiwi Christmas tradition as pavlova, pohutakawa and Queen Street’s giant Santa.
That’s the message from retail experts who say New Zealand consumers have changed their Christmas shopping habits in recent years and that local businesses need to adapt.
Last year many retailers were hit by a slower than expected December period. This came as a shock when Christmas is a period that has traditionally been the busiest time of year for retail.
But December 2018’s sales slump was driven by a significant change to the way shopping now takes place over the Christmas period, says Paymark’s Paul Brislen.
Kiwi shoppers may have taken a while to get on board with the American concept of Black Friday but it finally happened in 2018. There was a significant increase in the number of retailers offering Black Friday sales, and consumers made the most of these – leading to a 10.4 percent increase in retail spend for Black Friday year-on-year.
“Traditionally Christmas Eve has been the busiest shopping day of the year with a gradual build up during December. Last year, however, we saw something new – a big peak at the end of November around the Black Friday and Cyber Monday sales period. This has been heavily marketed by retailers in the last few years and seems to have built up quite a big following among shoppers.”
However that sales spike changed the December period last year “quite significantly”, Brislen says. “The peak around Black Friday was followed by a flatter couple of weeks before sales built up again around Christmas Eve weekend. Whether we’ll see that again this year remains to be seen.”
“Significant” changes to both work culture and consumer patterns have reduced the “last-minute nature of Christmas”, says First Retail managing director Chris Wilkinson.
“Major employers have tended to close on the Friday of the preceding week [and this] provides more time for people to browse and make purchases in stores.”
As a result, events like Black Friday are crucial to the overall Christmas shopping period, he says.
“Black Friday is very important as this helps ‘open wallets’ and gets people thinking about where they’ll be spending in the weeks ahead. Last Black Friday we saw big-ticket items like appliances and electronics driving the values up.”
Wilkinson says Christmas 2019 is likely to be “a couple of percentage points ahead, driven primarily by cost increases and retailers looking to claw back margin in pricing.
“Transaction numbers we believe will be in line with last year – possibly back somewhat, as the heat continues to come off the economy”.
Overall retail “is a good place to be”, he adds.
“We see the growth in e-commerce now stabilising and with increasing choice and value in our stores, we feel that retail will be a good place to be this year. The winners will be in apparel, cosmetics and personal care, and nesting categories [such as] homeware, DIY and garden.”