Sam Clarke, CEO at Skynamo

Black Friday: Fewer discounts expected this year due to supply constraints

As South Africa heads towards Black Friday, it has been predicted that supply-chain disruption caused by COVID-19 could mean that there’s insufficient stock to meet demand come 26 November.

This is according to Sam Clarke, CEO at Skynamo, South African provider of a field sales CRM and mobile ordering app for manufacturers and distributors. “Around 90% of traded goods are transported via sea. But, with bottle necks at ports due to the pandemic, the result could be that knockout deals this year are fewer and far between. Similarly, retailers’ profit margins are already being squeezed, so there are likely to be fewer deals and smaller discounts on offer.”

It is expected that 66% of South Africans will participate in Black Friday sales, either in the days leading up to it, on 26 November itself, or on Cyber Monday. Products that are the most in demand include clothing, shoes, groceries, electronics and home appliances. “However, this year Black Friday will be one like no other, as businesses and retailers are faced with the challenge of meeting consumer demand while facing shortages due to supply chain disruptions,” says Clarke. “This means that it may be harder to source the items they need in preparation for Black Friday. For example, cotton is in short supply worldwide, which affects the availability and price of certain clothing.”

One way for retailers to circumvent supply issues is to offer a longer lead time for delivery

One way for retailers to mitigate this is to ensure that they are organised early. “In order to have enough stock of the bestsellers, businesses should determine early what products they would like to discount and then speak to their suppliers as early as possible.

If it’s unlikely that stock will arrive in time for Black Friday, retailers need to make sure that they have a back-up plan, adds Clarke. “Perhaps have other merchandise on hand that you can sell instead. Similarly, if items that customers order online are going to take a while to be delivered, make sure that this is communicated immediately to manage their expectations or give them time to find an alternative.”

One way for retailers to circumvent supply issues is to offer a longer lead time for delivery, says Clarke. “The other thing retailers can do is to give customers the option to pick up their merchandise from a drop-off point rather than deliver door-to-door,” he says.

With the fourth wave of COVID-19 expected to hit in early December, retailers will be wanting to maximise sales before Christmas, which means Black Friday is perfectly timed. “Retailers will just have to adjust their expectations in line with supply constraints and a more muted shopping mood,” concludes Clarke.

For a look at how supply chain disruptions have affected South African industries, follow Skynamo’s monthly Industry Thermometer updates of sales order volumes captured by hundreds of their customers across 26 industries. https://skynamo.com/industry-thermometer-2021/