Nedbank has identified a small number of significant trends in consumer spending behaviour during the recent Black Friday period, which it says not only point to the continuing evolution of South Africa’s retail landscape, but also to a greater awareness by South Africans of the importance of sound personal financial principles.
According to data reported by BankservAfrica, the South African banking industry experienced a 6% decline in Black Friday card transaction volumes. Yusuf Hassen, Head: Product Management Card at BankservAfrica, notes that while this decline may initially seem concerning, it’s essential to understand the broader context influencing consumer behaviour. “Financial constraints faced by consumers were clearly visible in this year’s Black Friday spending patterns, Hassen notes, “and we are also mindful that promotions extended throughout the month of November, which could have resulted in the muted figures for Black Friday itself.”
According to Hassen, the timing of Black Friday in relation to payday appears to have a noteworthy impact on spending habits. “Last year’s Black Friday fell after payday, which for most people in the country is the 25th of the month,” he explains, “but Black Friday being on the 24th of the month this year, before most employees would have been paid, may have negatively impacted consumer spending power.”
From a Nedbank perspective, Privesan Naidoo, Executive Trading Product VP at Nedbank says that Black Friday delivered something of a mixed bag in terms of transaction volumes and values, but that it clearly demonstrated the resilience of Nedbank’s card transaction processing platforms..
He notes that Nedbank operates on a well-architected, robust and resilient IT platform as demonstrated by the 100% uptime for the Nedbank technology stack throughout the day.
According to Marijke Guest, Divisional Executive: Payments at Nedbank, the secure, stable and reliable platform is a reflection of the significant investment Nedbank has made in modernising their payment landscape to continue rendering extraordinary, consistent and reliable client experiences. “The IT team did apply additional diligence for these high volumes days,” Guest says, “but in reality, every day is Black Friday for IT at Nedbank, so they were well prepared for these important high-volume days.”
In terms of actual transactions processed by Nedbank, Naidoo says that despite a decrease in physical card transactions, there was a continuation of the shift towards e-commerce, evidenced by a robust 35% growth in online payment transactions. “The digital transformation of South Africa’s retail landscape over the past two years is undeniable, and it continues to drive consumer preferences towards online shopping,” Naidoo observes.
Nedbank’s own data also reveals a pattern that appears to bear out Hassen’s opinion about the payday mis-timing of Black Friday. The bank saw a slight decline in the growth of volume and value of transactions on the day itself, followed by a significant recovery over the weekend.
Nedbank’s issuing base mirrored this trend, remaining flat year-on-year but showing a strong weekend recovery into Cyber Monday. Notably, e-commerce transactions involving Nedbank and American Express cards increased on Black Friday.
“The trend towards contactless payments is particularly encouraging, demonstrating a 47% volume increase and a staggering 93% value growth compared to 2021,” says Naidoo, highlighting the fact that this was not a passing fad relating to the pandemic, but rather that consumers now recognise the convenience and security that these contactless transactions offer.”
The highest number of transactions by a single Nedbank cardholder on Black Friday dropped significantly, coming in at 64 in 2023, compared to 100 in 2022. Naidoo says that this datapoint is indicative of a broader trend observed by Nedbank towards more discerning and mindful spending by consumers. “From our data, it would appear that the combination of challenging economic times and the ongoing education that Nedbank has been providing to help its clients better manage their finances during the recent inflationary period, has made them more aware of the importance of not getting caught up in the Black Friday frenzy, and rather spending their hard-earned money wisely,” he says.
“Nedbank remains committed to providing this financial management education and support, and also to offering the secure, innovative payment solutions needed to meet the evolving needs of its individual and business customers in the increasingly dynamic South African retail environment,” Naidoo concludes.