PriceSpy - Black Friday Report 2022 - Part One

Black Friday and the cost-of-living crisis

Introduction

Across the last few years, Black Friday has grown exponentially in both size and popularity. In New Zealand alone, it has fast become one of the country’s biggest sales events in the calendar year.

Last year, the amount of total sales generated between Black Friday through to Cyber Monday was reportedly worth $248.2million in New Zealand****.

With Black Friday appearing to have made its mark in New Zealand, how will this year’s sale season shape up amidst the ongoing cost-of-living crisis?  Do Kiwis trust the discounts being offered by retailers? And, how can shoppers ensure a sale price is trustworthy?

Using insights captured from a new PriceSpy-commissioned survey amongst New Zealanders, as well as PriceSpy's own comprehensive data, this Black Friday Report aims to answer these questions and more.

The Black Friday Report 2022 will be split into two parts:

Part one will focus on Black Friday and the cost-of-living crisis.

Part two will focus on how much of a discount Kiwis can expect to receive, whether consumers can trust Black Friday deals plus tips to ensure shoppers aren’t getting ripped off by a fake sale.

*More information about the survey and how it was carried out can be found at the bottom of this report.

Black Friday Background 

Fun facts

• Black Friday first originated in the United States and traditionally marks the start of the Christmas shopping season.
• Many stores heavily promote sales at discounted prices and often open early (sometimes as early as midnight on the eve of Thanksgiving) or stay open late. Some stores’ sales continue online to Monday (Cyber Monday) or for a week (Cyber Week)**.
• Black Friday has routinely been the busiest shopping day of the year in the United States since 2005**, and last year (Black Friday 2021) saw 88 million Americans shopping online***.

When is Black Friday?

This year Black Friday will take place on Friday, 25^th November 2022.

Sales are running earlier - Black Friday is becoming Black Week

Traditionally, Black Friday is known for being a standalone sale day that’s followed by a long weekend of additional discounts online (Cyber Weekend and Cyber Monday).

Recently, retailers have been offering early Black Friday deals and discounts to entice consumers to spend even earlier and over a more prolonged period of time.

Black Friday is becoming Black Week.

Black Friday is BIG

In comparison to the likes of other big sales events, such as Boxing Day, Black Friday is still a relatively new sale event in New Zealand.  In saying this, let’s not underestimate just how big Black Friday is! 

Consumer purchase interest is at its highest on Black Friday

Based on historical click data from PriceSpy (2021 data), consumer buying interest starts to build in the week that leads into Black Friday (Black Week). 

On Black Friday itself, consumer buying reaches a significant peak – above that of any other shopping day in the calendar year between 1^st January through to Christmas Day.

After Black Friday, another peak in consumer shopping interest appears on Cyber Monday, before dropping back down to normal levels.

Overall, Black Friday creates the biggest opportunity for retailers to generate sales ahead of Christmas Day, as this is when most are looking to shop.

Black Friday is popular amongst Kiwi shoppers

PriceSpy's latest survey results also highlight how popular Black Friday and Black Week is amongst Kiwi shoppers:

• Three out of five (60 per cent) respondents say they have previously purchased something on Black Friday or Black Week.

But in comparison to PriceSpy's 2021 survey results, this figure was found to have dropped – down -16 per cent year-on-year.

A reason for this may be because people were in Covid-19 lockdowns across much of the year and consumer purchase behaviours have now changed.  We will cover more about this later in this Report.

With consumers and retailers both facing a cost-of-living crisis, how will this year's sale season shape up?

Kiwis are worried by the cost-of-living crisis

No one is immune to the cost-of-living crisis – and PriceSpy's recent survey reveals a staggering nine out of 10 Kiwis (93 per cent) felt worried by it.

Kiwis are noticing price increases

Shockingly, the PriceSpy survey also highlighted that more than nine out of 10 Kiwis (95 per cent) say they’ve noticed that price points across consumer goods, fuel and grocery items have risen this year.

And PriceSpy research confirms - price points have indeed risen

Unfortunately, new research undertaken by PriceSpy confirms that price hikes have taken place across several shopping categories over this last year.

PriceSpy’s research found average price points across the most popular cookers, fridge freezers, TVs, mobile phones, vacuum cleaners and game consoles had all increased in 2022 compared to 2021.

So, will retailers be able to afford to offer good Black Friday discounts this year? Or will their own increasing costs hold them back?

This year's big question... Do Kiwis plan to buy this Black Friday?

According to PriceSpy's new consumer survey results, the answer to this question is yes!

Half of Kiwis intend to buy this Black Friday or Black Week

Even though many New Zealanders are understandably worried about the cost-of-living crisis, and disposable incomes are being squeezed, this year’s survey results from PriceSpy reveal that over half (53 per cent) still intend to shop on Black Friday or Black Week this year.

Compared to pre-Covid-19 times (PriceSpy’s 2018 survey results), this number has increased – and is up by almost a fifth (18 per cent).

But compared to last year, this number is down

In comparison to last year’s results (2021) however, this number was found to have dropped  - and is down -12 per cent year-on-year. Meaning every one in 10 people that planned to shop on Black Friday or Black Week last year don’t intend to this year.

And this year, two out of five survey respondents say they do not intend to buy this Black Friday or Black Week.

Interestingly, this year, PriceSpy's survey found that two out of five Kiwis (42 per cent) do not intend to buy something this Black Friday or Black Week, presenting a year-on-year increase of +13 per cent.

Why is this?

Potential reasons as to why Kiwis are unlikely / do not intend to buy this year, include:

Covid restrictions are no longer

Aside from the wider cost-of-living crisis, this year’s drop in purchase interest may potentially be attributed to Kiwis coming out of full Covid-19 lockdown restrictions and life almost returning back to normal.

For example, the pent-up purchase demand that consumers may have experienced last year as a result of not being able to buy goods normally may have significantly dropped this year, as shops are operating normally.

Life is returning back to normal

Let’s not forget last year, the majority of Kiwis were also being encouraged to work from home last year and many schools were closed.  Consumers, therefore, did not have to spend so much on fuel and transport costs – they could afford to splurge more frivolously.

With the majority of Kiwis now back in the office for at least some of the working week and schools fully open, the level of disposable money available may be less.

Consumers are choosing to shop more consciously

Shoppers, this year, may be choosing to shop more consciously.  Some of this caution may be driven by the cost-of-living crisis, but some may simply opt out of sales events as they do not want to buy for the sake of buying.

Priorities have changed

Another factor to consider this year is that people may also want to spend any spare money on meaningful experiences that they couldn’t otherwise have done because of the pandemic and restrictions.  So, travel and holidays, catching up with friends and family etc. might be higher on the agenda.  People’s priorities have changed!

And PriceSpy's consumer purchase data reflects this insight - with the popularity of travel-related products increasing.

Cost-of-living crisis

Finally, with the cost-of-living crisis is causing worry and alarm, consumers may want to save and put away what spare money they have for any difficult financial times ahead.

Shoppers still intend to spend big this Black Friday season!

Despite nine out of 10 survey respondents saying they feel worried by the cost-of-living crisis and fewer shoppers saying they intend to shop on Black Friday or Black Week this year (compared to last year's survey results in 2021), of those that do intend to purchase:

• Almost two-thirds (63 per cent) say they are looking to spend over $500 on Black Friday or Black Week (a four per cent rise on last year's results and a 22 per cent uptick compared to 2020’s survey results)

The average amount shoppers are looking to spend is an impressive $731.40.

Interestingly, in comparison to PriceSpy’s 2020 survey results, the average amount Kiwis intend to spend this Black Friday has increased by 57 per cent.

Why is this?

Shoppers are evidently still looking to buy across Black Friday and Black Week this year and surprisingly, the amount they are looking to spend is still high. 

With a cost-of-living crisis on everyone’s mind, one reason that could explain why people are still looking to spend a sizeable amount of money this year over Black Friday and Black Week, is to make the most of the discounts offered.

For example, if a consumer tried to purchase a high ticket item earlier this year, such as a fridge freezer or washing machine, but was put off by the elevated price point it was being sold for, they may be delaying their purchase to buy it at a cheaper time – with a Black Friday discount (more about what kind of discounts consumers can expect to receive across Black Friday will be revealed in part two of The Black Friday Report).

Retailers should brace themselves - almost half of Kiwis plan to shop in-store!

Even though Black Friday was traditionally an in-store affair, in recent years, and especially since it’s become popular in NZ, its online presence has grown - with lots of stores offering Black Friday sales pages online.

Across the time that PriceSpy has run its surveys (since 2018), consumer shopping preference in New Zealand for Black Friday and Black Week has been in-store over online.

Last year (2021) however, the survey results were different. And for the first time in four years, the number of Kiwis that planned to shop online equalled that of in-store. 

This change was largely driven by the Covid-19 lockdown restrictions, which changed the shopping landscape – people perhaps felt safer shopping online, rather than mixing with others in-store.

This year is different

With life almost back to normal, PriceSpy's survey results this year indicate that once again, Kiwis prefer the hype and in-person experience of shopping in-store:

• Almost half of the respondents (48 per cent) surveyed say they plan to do most of their Black Friday and Black Week shopping in-store – a year-on-year uplift of 10 per cent.

Key takeaways

• Kiwis are clearly concerned about the cost-of-living crisis.

• Many consumers have noticed price increases happening across consumer goods, fuel and grocery items this year.

• Consumer shopping behaviours have changed.  Compared to last year, less Kiwis intend to buy this Black Friday or Black Week. Key factors driving this change, include:
  • • The cost-of living-crisis
    • Covid lockdown restrictions being lifted
    • Life is almost back to normal (e.g. people are returning back to the office and children are back at schools.  Consumers therefore have more outgoings on fuel, transportation, car running costs etc)
    • Consumers are choosing to shop more consciously
    • People’s priorities changing

• But, compared to pre-Covid times, buying interest has increased. These last few years have just been very unusual.

• Consumers that do spend this Black Friday and Black Week will spend big, with the average amount equating to $731.

• Kiwis will do most of their Black Friday and Black Week shopping in-store, so expect malls and retail stores to be busy.

With lots of discounts being offered over the next month, PriceSpy’s key piece of advice to consumers looking to secure a good deal is to ensure they carry out essential price comparison research first.

More information about the types of deals people can expect this Black Friday season (not to mention tips on how to spot a fake sale or a price hike) will be released in part two of The Black Friday Report.

The PriceSpy consumer omnibus survey

* The PriceSpy consumer omnibus survey in 2022 was conducted by 3Gem, in October 2022, on 500 New Zealand respondents.

* The PriceSpy consumer omnibus survey in 2021 was conducted by 3Gem, in October 2021, on 500 New Zealand respondents.

* The PriceSpy consumer omnibus survey in 2020 was conducted by 3Gem, in October 2020, on 500 New Zealand respondents.

* The PriceSpy consumer omnibus survey in 2019 was conducted by Savanta, in October 2019, on 506 New Zealand respondents. * The PriceSpy consumer omnibus survey in 2018 was conducted by VIGA (now Savanta), on 30 October 2018, on 527 New Zealand respondents.

Other sources

**Source: Wikipedia

***Source:  Trulyexperiences

****Worldline on Scoop