South Africa’s retail sector is anticipating a bumper Easter weekend, with online retail shopping sales forecast to reach R158 million.
This is one of the key findings of a study conducted by the Bureau of Market Research (BMR) on behalf of local fintech firm Capital Connect.
The research forecasts that the total retail sector will benefit from a R2.219 billion boost in turnover during the Easter period, with the e-commerce sector expected to provide a significant portion of this – R158.4 million.
Positive macro-economic trends are expected to help sustain a recovery in retail sales throughout the year, following a difficult 2023, when higher interest rates, persistent inflation and low growth dampened consumer spending, it says.
With the e-commerce sector currently contributing 7.2% of overall retail sales, South African e-tailers are preparing to cash in on one of the busiest shopping periods of the year for retail, it says.
“The Easter season holds promise for retailers that are able to capitalise on the latest consumer trends,” comments Steven Heilbron, CEO of Capital Connect.
“More than half the South African adult population have already made use of online shopping. The percentage of the population shopping online has been growing strongly for the past decade and it is expected that such growth will continue.”
Retailers’ online presence will be a strong facilitator of Easter sales, helping to run discounts, special offers and sales promotions to optimise online sales, according to the report.
With inflation tapering off and interest rates set to decline, macro-economic forecasts for 2024 are pointing towards an emerging turnaround in the business cycle, which could greatly benefit savvy and innovative retailers this year, it states.
The overall retail economic growth rate is expected to increase from 0.5% during 2023, to about 1.4% during 2024,notes the report.
Retailers that are able to quickly expand their product ranges and offerings when there is an upsurge in demand, and react fast to volatile market conditions, will outperform the rest, it says.
“Clothing and shoe sales are expected to generate about a quarter of the online retail sales value. Other major online retail categories expected to be popular are electronic and digital devices, jewellery, leather goods (including bags) and accessories, food and beverages, and household appliances,” adds Heilbron.
Diversification of product lines and channels to market are proving to be particularly successful approaches for retailers in these uncertain times, notes BMR.
Last year’s Black Friday shopping showed brick-and-mortar sales experienced a slight downturn from 2022, while e-commerce shopping levels remained relatively high, with activity increasing by the hour, while in-store shopping was slower, according to BankservAfrica.
Carel van Aardt, research director at BMR, tells ITWeb the growth in the number of online shoppers and the total retail value generated via online shopping is being driven by a combination of variables, including the increase in South Africans with access to the internet and smartphones.
“Other contributing factors include a growing number of South Africans having an income source or other form of incomes (including grant incomes); a growing number of South Africans being banked – resulting in a debit card which could be used for online retail purposes; and an increasing number of South Africans being active on social media where there are links to online retail facilities, as well as advertisements of online sales.”
Optimising retail performance during the Easter shopping season will require a combined, innovative onsite and online multi-business strategy, to better understand customer preferences, create seasonal promotions, enhance visual merchandising, optimise online presence and ensure ample inventory, concludes Van Aardt.
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