Monday, July 22, 2024

Household Spending Will Fall 10% On Black Friday

A slightly lower participation than last year and with a shrinking budget. In this way, Spaniards face Black Friday , the discount campaign that is the kick-off for Christmas shopping, which this year is celebrated around November 27.

Amid the social and economic ravages caused by the coronavirus pandemic , there will be fewer consumers willing to buy, and those who do will spend less than on other occasions. In any case, the online sales channel seems destined for great success, due to capacity limitations and the recommendation to avoid crowds.

If last year 64.1% of Spaniards had bought something during the so-called Black Friday, in this edition they expect to do so only 60.3%, which is equivalent to a decrease of 3.8 percentage points, according to the latest study prepared by iAhorro on trends and purchase intention of Spaniards on Black Friday 2020.

From the banking comparator they emphasize that “it is the first decrease since 2018, the year in which the first report was made.” Likewise, 59.3% of those surveyed took advantage of the discounts last year and will do it again now, 4.8% bought in 2019 and this 2020 does not plan to do so, 34.9% did not join the initiative and They confirm this decision, and 1% will buy in this edition, although in the previous one they did not.

The biggest difference, however, will be noticed in the budget that will be allocated to these purchases, 10% less compared to last year and 8% less than in 2018.

The average expenditure for 2020 will be 128.20 euros. 22.3% of buyers will only spend between 0 and 50 euros on Black Friday, 27.4% between 50 and 100 euros and 20.4% will spend between 100 and 150 euros. Only 10.5% will get from their pocket this time between 150 and 200 euros and the remaining 19.4% more than 200 euros.

In general, 54.6% of those surveyed will maintain their budget, while 34.4% say they will spend less and only 11% will increase it.

While the amount of money allocated to Black Friday decreases, only 29.7% of those surveyed claim to have created a budget, or, what is the same, more than seven consumers out of 10 have no planned investment they will make in their shopping.

Regarding the form of payment through which they face their purchases, 52.3% do so with their income for the month, 23.4% with a credit card and only 15.5% with savings accumulated in previous months .

The reasons for the declines in participation and budget lie, on the one hand, in the impossibility for many to face this type of purchases, because their economy has deteriorated or as a precaution for the future.

On the other hand, in the fact that it is about purchases that they deem unnecessary. In this, the financial expert of iAhorro, Antonio Gallardo, sees a part of ” saving as a precaution “, and another almost obligatory, “for not being able to make certain consumption expenses such as, for example, leisure”, due to the limitations derived from the health emergency.

In this sense, travel appears as the major victims on this Black Friday. If in past editions this item used to account for between 8% and 10% of all purchases, this time it plummets to 2%, the largest drop by segment.

In the rest of the categories there are few changes compared to other years. They lead the ranking of fashion and accessories (62.1%) and computer science and electronics (44.1%). With 16.9%, video games is the only one that shows significant upward changes (16.9%).

This year, electronic commerce has become especially important for the acquisition of goods and services, since 45.4% will choose this channel during Black Friday, while 20.3% prefer physical stores and 34.3% will use both possibilities.

Always according to the iAhorro survey, the convenience of home delivery is the main reason why customers prefer to buy online.

A fact that, possibly, is closely related to the second pandemic wave , to the point that, for the first time, this reason exceeds that of finding the best discounts as the reason for choosing to buy online (35.4 % versus 30.5%, respectively).

“The digital channel has established itself as the absolute leader in purchasing decisions and this year it can multiply its weight”, reasons Sergio González, professor at The Valley business school. “There is no doubt that this year there are people who will not go to the physical point, or should not do so, at least not en masse.

However, there are many who continue to prefer the physical channel because they can live the experience of touching, seeing and testing the product or service on site ”, he clarifies. In fact, those who prefer to buy offline (20.3%, according to iAhorro) point to the fact of seeing or trying on what they want to buy as the most important reason for their choice.

The uncertainty derived from the evolution of the Covid pandemic and the dark clouds that hang over the Christmas celebrations will also affect the purchases of one of the most anticipated sales campaigns of the year.

“Black Friday has a lot of occasional shopping component for oneself and the gifts will be adjusted this year to a smaller budget”, Gallardo predicts.

“If the limitations continue, it is most likely that the decline will be much more pronounced mainly in leisure, but also in food, due to the decrease in family gatherings, although these purchases are usually concentrated after the holidays in early December”, adds.

Be that as it may, 33% of those surveyed affirm that among the main reasons to buy during Black Friday is to save on Christmas shopping, while 42.5% do so without looking for anything in particular and 20 , 6% have a fixed purchase objective.

The remaining 4.75% will buy for other reasons. The majority (42.3%) expect that the discount they can obtain will be up to 20%, 23.4% of buyers expect to obtain a discount of between 20% and 40%, and 21.8 % of respondents, between 40% and 60%. Only 12.5% ​​trust in achieving savings above 60%.

If more than half of the consumers surveyed by iAhorro finances their purchases on Black Friday with the income they have received this month and only 15% with the piggy bank established in the previous weeks, almost one in four do so with the card of credit. Most of those who use this payment method (44.2%) establish a fixed monthly payment fee.

On the contrary, 39.4% prefer to return the entire amount at the end of the month.

“Both options are valid”, says the Marketing Director of imaginBank, David Urbano, “it all depends on which one is more suited to the way in which each one manages money”. Paying everything at the beginning of the month, for example, will prevent the bank from charging commissions. Also setting a spending cap is another of Urbano’s tips.

Another factor to take into account during Black Friday is fraud in electronic commerce, since it tends to increase in initiatives of this type, although the European Directive on Payment Services has increased security in purchases made online. Even so, “in case of theft or fraud, blocking the card will be the first step to follow,” emphasizes Urbano.

And, if what has to be stopped are compulsive shopping to avoid surprises at the end of the month, it will not hurt to “make a selection of what we want to have for Black Friday,” he suggests.

“In this way, it will be possible to decide if the expense is affordable or if everything that is on the list is really needed,” he adds.

Special care with prices is what they advise from the Organization of Consumers and Users (OCU). Last year, only 17% of the products became cheaper, compared to 29% that became more expensive. Average prices in the month prior to the 2019 edition of Black Friday increased globally by 0.55%.

For this reason, the organization’s spokesperson, Ileana Izverniceanu, recommends “keeping track of the products that are needed and comparing between establishments before buying.”

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