Major Australian retailers are preparing for a bumper holiday shopping season thanks to a COVID-induced shift in spending habits, with this weekend’s Black Friday sales expected to be bigger than ever.
Kicking off on the last weekend in November, Black Friday sales run for four days and culminate with the online shopping-focused Cyber Monday. An American import, the shopping holiday was largely ignored in Australia for many years but has recently gained popularity, even threatening to eclipse Boxing Day in sales volumes.
Retailers expect this year will be no different even in the face of a COVID-weakened economic environment, with Afterpay’s co-chief executive Nick Molnar expecting a sales boom fuelled by a reduced spend in other sectors – at least in the millennial crowd.
“We’re seeing consumer spend in the retail landscape grow as a result of the fall in hospitality, travel and other areas,” Mr Molnar told The Age and The Sydney Morning Herald. “And we’re seeing the younger generation really drive that retail spend.”
“I’d probably go as far as saying that Cyber Monday, Black Friday will be the same size, or potentially bigger than Boxing Day, at least from an online perspective.”
Boxing Day last year was a $2.6 billion event in Australia, and analysts and industry bodies are expecting shoppers to spend between $3 billion and $5 billion on Black Friday sales this year. Total Christmas spend, which tracks sales from November 12 to December 24, is expected to grow 2.8 per cent to a whopping $54.3 billion.
According to Paul Zahra, the head of the Australian Retailers Association, COVID-19 related restrictions may actually help drive this year’s record sales as more retailers are starting their discounting early to give COVID-restricted customers more chances to shop.
“Most retailers are doing their damnedest to remain COVID safe, which means they’re spreading the event over several days and therefore customers will have more time to shop,” he said.
Major shopping centres, such as Chadstone and Westfield Sydney, have already kicked off many of their Black Friday sales in order to better facilitate COVID safe shopping.
Much of this year’s growth for the shopping holiday is expected to come from the e-commerce sector, which has boomed during the pandemic as many shoppers have been forced to buy online.
Tim MacKinnon, the head of e-commerce giant Ebay’s Australian operations, said more retailers than ever before had expressed an interest in participating in the online marketplace’s Black Friday event.
“I think this will be the biggest Christmas period ever,” Mr MacKinnon said. “And this is not just an online phenomenon. Consumer confidence is very high and there’s a lot of government stimulus flowing through which is helping people.
“So everything suggests this will be a big Christmas.”
Mr Zahra agrees, saying the various forces at play due to COVID meant it looked like the “stars were aligned” for retailers this week. The former David Jones chief also watered down concerns that the bumper sales weekend could drag sales away from the Christmas period.
“Retailers might actually be getting two bites of the cherry, because as you get closer to Christmas the consumer mindset moves away from price and towards convenience,” he said.
Mark Schiavello, the head of retail at accountancy firm BDO, said the sales period may draw some trade away from December sales, but retailers should be factoring that in.
“This is now a key sales period that needs to be factored into annual forecasts because it’s not going away,” he said.
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