“I think it’s grown over time” is how Takealot CEO Kim Reid describes Black Friday. And he’s not wrong.
In November 2016, South African retailers saw a 10% increase in sales over the same period in 2015, this due to the increase in popularity of Black Friday and Cyber Monday. This year, Takealot itself is forecasting gains of nearly R80-million over last year’s haul of R56-million for the Black Friday weekend.
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But for the Cape Town-based etailer, that forecast stems from years of planning.
We recently sat down with Reid to discuss the formidable day, the business’s operations as a whole, and preparation for its big year-end push.
“If you have a look at Black Friday, we kind of pioneered it in early 2012,” Reid grins, continuing his aforementioned thought.
“There are some other retailers who claim they were the first, but that was 2014.”
Initially Black Friday was seen as a marketing opportunity for Reid’s company, but it has since blossomed into Takealot’s most important sales period.
“We thought we needed to bring people online. There seemed to be these events that were happening off shore, and we saw Black Friday happening, and Cyber Monday happening.”
Now, both days are now earmarked in pen on the calendars of shoppers and retailers alike. In 2016, Black Friday was made an even more lucrative prospect Reid noted, as more brick and mortar stores adopted the craze.
Black Friday replacing Christmas?
This year, a simple walk through a local mall is testament to Black Friday’s influence on stores, and therefore shoppers alike. And this growing influence is also important for Takealot.
“There’s this natural channel shift happening worldwide, and it’s now happening in South Africa as well where people are coming online,” he explained, suggesting that more and more South Africans are shopping online yearly.
The younger, more tech-savvy generation gravitate towards keyboards rather than queues because it’s “natural” for them, Reid claims.
This shift has had a marked impact on the company’s end of year push.
“We’ve been growing year-on-year for September-October above 70%,” Reid revealed, citing that even Christmas was being usurped as an important shopping holiday in comparison to its November counterpart.
“We definitely see a drop off in the last week before Christmas,” he notes.
While volumes ebb and flow throughout the year, Reid explains that Takealot focuses wholeheartedly on October through December, even after shoppers are covered in scrunched up balls of discarded wrapping paper.
“What we really do is start in January and build into season,” he adds, “that’s how the whole business is geared.
“Even as far as leave is concerned, no one can go on leave between October and December. You take your leave in January or February or June or something like that, and then you start preparing for the seasonal push.”
“It’s like that because (the holiday) season is different: the volumes are much higher and the stress on the business is much higher. So every year we have to improve to be able to service those volumes on a year-on-year basis.”
But what of service? Traditionally Black Friday lives up to its name quite literally for websites across South Africa and the globe. With increased traffic hitting unprepared servers and platforms, website crashes, sloth-like loading times, and sluggish responses by customer care become the theme of the day.
‘Even as far as leave is concerned, no one can go on leave between October and December’
But Takealot has a plan this year.
“We’re taking the learnings from the previous year, and we’re applying it to the current year all the time. The best way to learn is through feeling the pain from the previous year,” he admits.
“We’ve done a lot of work on the platform, to make sure it stays up during the season. Will it stay up, I have absolutely no idea.”
In 2016, the company was forced to disable access to its mobile app for a period, citing increased traffic. A Bankserve crash also left a slew of payment options unavailable on the website itself.
“We’ve now put in a contingency system to deal with that,” Reid claims.
But the load is part and parcel of the period.
Reid claimed that there a “70% or more increase in volume [during Black Friday] over the previous peak”, and the company has been looking at implementing improvements to the warehouse operations, more visibility in the call centre, drivers, and app improvements.
A vast majority of said volume comprises of electronics, with PlayStation consoles, mobile phones and external hard drives leading the category. However, other goods prove popular too. Dog food and baby essentials prove the most popular goods on the Takealot app.
Even fidget spinners have a place, although sales of these gadgets have dropped significantly. Reid revealed that Takealot has shipped over 20 000 of these to date.
Even with a plan however, Reid admits that things will almost always go wrong.
“We’re not perfect. I wish we were, but we’re not perfect”.
“We don’t go out and say ‘you’re the person we’re going to pick on today’, we do it completely randomly.”
Reid explains that its how the company addresses issues that are key to earning consumer trust.
“We have a WhatsApp group called ‘The War Room’ right now, (so) that if something’s happening, everyone is hands on deck and try to solve the problem. It’s that level of immediacy that’s required.”
And that WhatsApp group is set to be busy a fair deal this week. With its forecasts higher than ever, the company is set to have its hands full when its sales commence at 12.01am on 24 November, through to 28 November.
“All I can say is check us out in the day. There will be 15 000 deals available in the period,” he quips.
But is he ready for Black Friday?
“[I’m feeling] a mix of excited and terrifying,” he answers, smiling.