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DPO Group: Black Friday Lessons Provide a Festive Boost for Local Ecommerce Stores

While the Black Friday and Cyber Monday weekend may have been a relatively muted affair this year, online merchants have enough time to salvage the last trading quarter if they apply lessons learned and aggressively tackle the festive season, says South Africa’s largest payment service provider, the DPO Group (including PayGate, PayFast and SiD).

“The number of PayGate transactions saw a very solid 40 percent year-on-year growth this Black Friday weekend, although we didn’t see any of the big spikes in transactions we have seen in previous years. The more sustained traffic was likely a response to retailers shying away from the show-stopper discounts of previous years,” explains Peter Harvey, MD at DPO South Africa. “The good news is that we have seen a definite uptick in first-time online shoppers, which means our merchants have a bigger potential market to appeal to ahead of the festive season.”

DPO Group, supports more than 100 000 merchants, including many of Africa’s largest online stores, showed a 46% increase in PayGate transaction volume, but data shows the average value of transactions in 2020 were lower than those in 2019.

“PayGate’s traffic was definitely higher this year, with the peak number of transactions per minute up 25 percent from last year. This was driven by more, smaller-value transactions, although the biggest transaction was for an amount of R437 568 in the travel and tourism sector. On average we saw volumes reach four times higher than a normal day’s trade. The lower card present transaction data points to a subdued in-store weekend trade which is supported by what shopping malls have reported,” Harvey says.

Although the Black Friday sale period was over a longer period this year, with some stores opting for week-long specials, Harvey says the lack of midnight sale opening and start-of-day traffic spikes highlights two things: A consumer who has less disposable income; as well as a one who is not seeing discounts sufficiently enticing to warrant staying up late.

However, Harvey says there is definitely still reason for optimism.

“Our SiD Secure EFT platform was a great success again this year. With zero downtime and a 70 percent growth in transactions compared to last year, we can see that people are becoming more familiar with online transactions and shopping online. It also points to the trust customers place in instant EFT,” Harvey says.

Another positive indicator was the strong uptick in first-time online shoppers. PayGate data shows a healthy 26% increase in the number of cards used for the first time online. When added to a more mature logistics environment – with most online stores offering faster delivery times than last year – Harvey says there is reason for cheer ahead of the festive season.

“The resurgence of the COVID threat obviously enticed people to try online shopping this year. This means South Africa now has a larger number of confident online shoppers which means e-tailers have a broader base to appeal to in the weeks ahead. What’s more, If they offer genuinely enticing deals along with good digital marketing campaigns they could see a meaningful boost in festive sales,” Harvey explains.

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