In the lead up to Black Friday, industry leaders expected that numbers would well surpass previous years. When looking at markets such as Europe and Latin America, the sales holidays have remained the biggest event of the year for emerging e-commerce leaders
- confirming industry leaders’ estimates. Indeed, PayU data found that Latin America is on track to become the new powerhouse for e-commerce globally.
Yet, figures show that e-commerce growth in the US is slowing, reaching only
$8.9 billion this year compared to $9 billion last year. While only a small difference, and there are a number of factors at play this year, it does further highlight the opportunity for emerging e-commerce leaders to tap into unsaturated markets such as
Latin America and Central Eastern Europe. If you read my previous
blog you’ll already know a little bit about this.
The pandemic has sparked a global transformation in the retail space, with more consumers using e-commerce platforms than ever before. Likewise, the shift in consumer behaviour has been noticeable around the world, and this Black Friday was no exception.
Here are some of my observations and thoughts for merchants to capitalise on this potential.
Behavioural change amongst consumers
As I just alluded to, consumer behaviour has continued to adapt globally and COVID-19 has only encouraged markets to accept and embrace e-commerce more rapidly. This Black Friday and holiday season we saw this trend maintained, just as we’ve seen throughout
the pandemic. In fact, in Turkey, during November and Black Friday this year, PayU saw an 86% increase in transaction volume, while the number of transactions jumped by 57%.
Over in Romania, the volume of transactions by online customers during its Black Friday totaled
10 times higher than on an ordinary day. The total value of online transactions made through the PayU platform reached RON 357 million, while their number reached the threshold
of 658,000 transactions, up by 22% year-over-year.
In South Africa, in spite of a significant increase of 30% in transaction volumes compared to 2020, the total spend for the day was up by only 6% year-over-year, according to our data, balancing a key trend from the pandemic-driven 2020 which already brought
about higher consumer confidence in online shopping and lockdowns accelerated the shift to online.
Additionally, we are seeing other initiatives to support e-commerce growth introduced such as VAT free days in high-growth markets. Colombia has introduced VAT free days encouraging wider adoption of e-commerce within the country. In total, PayU processed
over $184 million worth of transactions within the country. Given the success of these dates, I believe it won’t be long until we see more governments introducing ‘Black Friday’ and ‘VAT-free’ days throughout the year to encourage e-commerce and support national
merchants. E-commerce leaders can partner with payments providers in order to stay aware of these initiatives and to ensure they are set up in the correct markets to capitalise on such events.
Innovation in the retail space
In the lead up to Black Friday this year, many merchants faced challenges in terms of preparation due to global supply chain issues. To combat this, we saw many turn to payments and e-commerce platforms that could be integrated into their internal supply
systems so as to avoid any disappointed customers. This meant staff were automatically updated on orders in real-time via e-commerce platforms. This has only been made possible through new and improved emerging technologies such as Artificial Intelligence
and Machine Learning automation. Integrating these technologies into business processes can massively improve efficiencies for e-commerce organisations, especially those with the wellbeing of their staff front of mind. This will be increasingly important for
organisations as consumers dictate the gradual move away from in-store experiences to online.
Another trend that we’re beginning to see, that will no doubt have a big impact on future Black Friday events, is the use of virtual experiences. For a long time, VR experiences have been used in-store to entice customers back to the high-street, but in
an effort to compete in busy markets online, global merchants are getting creative with their customer journeys.
Mobile commerce boom
This year, more merchants turned to mobile journeys in order to serve the ever-increasing smartphone penetration and adoption amongst younger generations. Indeed, 18–24-year-olds are increasingly using their smartphones to transact online, creating even
greater retail opportunities for global merchants. In fact, the number of
Gen Z P2P mobile payment users will more than double from 20.5 million in 2021 to 41.1 million by 2025.
It’s also important to highlight that while this adoption can be seen generationally, it’s also very prominent regionally. In Poland, of the 20.3 million internet users that shop online, 59% do so from their mobile phones. Additionally, Mexico is now second
only to South Korea for using mobile devices to buy online, with 15% of all e-commerce sales taking place on mobiles. As we continue to see sales holidays feature as key dates in retailers calendars, I believe we will start to see more creative applications
of mobile-friendly retail journeys.
Local payment experiences
While mobile payments are gaining momentum, we’re continuing to see a growing adoption of alternative payment methods too - especially as events like Black Friday help to break down the barriers of financial inclusion and encourage more shoppers online.
As this continues, merchants will need to utilise payments data to gain greater visibility and insights into payments preferences for customers across markets. We’ve been witnessing a continuous increase in merchants turning to payment partners to help them
with these processes. I’d extend this recommendation to any US merchants expanding into Latin America and Europe hoping to capitalise on the growing markets. In Columbia for example, nearly 1 in 2 transactions through our platform was carried out via PSE,
a local, popular alternative payment method.
Equally, in South Africa alternative credit offerings including RCS, Mobicred and Payflex have witnessed an increase and more customers have chosen to spend their loyalty points online. Our data indicates that the Discovery Miles’ ‘D-Day’ promotion saw the
loyalty scheme’s spend jump by 210%.
Unsurprisingly, Black Friday also showed us that customers prioritised purchases from merchants that could offer streamlined checkout journeys. For new customers shopping online for the first time, entering all their details while racing against the clock
could be deemed unnecessary admin. As a result, we saw an increase in merchants offering one-click payments at checkout so as to avoid a loss of sales caused by tedious registration processes. In Romania for example, 62% of transactions (+60% as compared with
the previous Black Friday edition) were made with a card saved in the PayU system or via Google Pay.
Once again, Black Friday did not disappoint. Innovation within the payments landscape has been key to much of the success this year, making e-commerce more accessible to previously overlooked markets. Black Friday always gives us a good indication of the
payment trends to pay attention to in the year to come. Merchants would do well to take note of this as they make plans for their customer interactions and journeys in 2022.