Nedbank observes shifting Black Friday trends

Nedbank observes shifting Black Friday trends. – Nedbank has identified a small number of significant trends in consumer spending behaviour during the Black Friday period. It says not only to 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.

Data reported by BankservAfrica

According to data reported by BankservAfrica, the South African banking industry experienced a 6% decline in Black Friday card transaction volumes. Yusuf Hassen 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. We are also mindful that promotions extended throughout the month of November. That 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, is the 25^th of the month. Being on the 24^th of the month this year 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. Demonstrated by the 100% uptime for the Nedbank technology stack throughout the day.

Every day is Black Friday for IT at Nedbank

According to Marijke Guest at Nedbank, the secure, stable and reliable platform is a reflection of the significant investment Nedbank has made in modernising their payment landscape. By continuing to render extraordinary, consistent and reliable client experiences. “The IT team applied additional diligence for these high volumes days. In reality, every day is Black Friday for IT at Nedbank. 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 revealed 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. This followed 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 & 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. That highlights the fact that this was not a passing fad relating to the pandemic. It’s rather that consumers now recognise the convenience and security that these contactless transactions offer.”

More discerning and mindful spending by consumers seen

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 the datapoint is indicative of a broader trend observed by Nedbank. That being more discerning and mindful spending by consumers.

“From our data, the combination of challenging economic times and the ongoing education Nedbank has provided, has helped clients better manage their finances. Especially during the recent inflationary period. They are more aware of the importance of not getting caught up in the Black Friday frenzy. Rather spending their hard-earned money wisely.”

“Nedbank remains committed to providing financial management education and support. They also offer secure, innovative payment solutions. Meeting the evolving needs of individual and business customers in the increasingly dynamic South African retail environment,” Naidoo concludes.