Black Friday deals end 14 months of price hikes
If we are to believe the large billboards advertising goods at half price ahead of Black Friday, Kenyan businesses will cut product prices for the first time this year, having consistently raised prices every month due to increasing input costs and passing on new taxes to consumers.
According to the Stanbic Bank Purchasing Managers Index, companies have been hiking prices each month, reaching a 14-month high in August before beginning to taper down ahead of the Black Friday shopping spree.
For over a year now, prices of consumer goods have been soaring, forcing families to budget with their dwindling incomes and cut back on discretionary spending for the better part of the year.
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Shopping scene bursting with deals
But as the year comes to an end, Kenya’s shopping scene is bursting with deals as companies try to push out their inventory in a year that saw demand for consumer goods plunge due to costs and declining incomes.
Firms are using November and, more specifically, Black Friday this week to push crazy deals, knowing Kenyans’ love for discounts would be encouraged by the sale offers.
“Average prices charged by Kenyan companies continued to increase at a considerable rate during September. Despite softening from August’s 14-month high, the overall rise was still among the quickest recorded in the series near-decade history. Higher charges were overwhelmingly linked to the pass-through of input costs to clients,” Stanbic Bank said in their October PMI.
Black Friday has become an annual November event with its roots in mid-20th-century America, where retailers mark the start of the Christmas shopping season with massive offers and discounts the day after Thanksgiving. Black Friday has since evolved into a major international shopping event globally with widespread popularity.
Aiding it, too, has been the technological advancements that brought services like e-commerce into the limelight, with global players like Amazon, Ebay, Alibaba, Jumia, etc., moving into the space and dominating the shopping scene. Such players have notably marked Black Friday in recent years, making it a growing sensation in the global shopping scene.
Interestingly, the name Black Friday has no affiliation with African people, and from its place of origin in the US, it may be used to describe two different occasions.
Black Friday
Aside from the shopping definition, Black Friday may also refer to September 24, 1869, the day when gold speculators sparked a financial panic in the United States. Banker Jay Gould and railway tycoon James Fisk attempted to corner the gold market, leading to widespread panic and the eventual collapse of the financial system on what has since been known as “Black Friday.”
Black Friday was considered the busiest shopping day in the US, then it became a common phenomenon that gained traction and is now being observed here in Kenya. Technically, it’s supposed to last a day, but merchants and stores at times push their offers for weeks or the entire month of November.
Locally, e-commerce giants like Jumia, Kilimall have their Black Friday offers running from 3rd November all the way to 30th November. They offer crazy discounts, flash sales, offers, with some of them being at odd hours in the night. At times, we’ve seen phones being advertised for flash sales from as low as Kes10.
Crazy discounts are everywhere and on all products from kitchenware, household electronics, phones, health and beauty, etc. Discounts ranging from 15 percent to as high as 50 percent of the total item cost are being offered on all these sites.
Among Kenyan youth, Black Friday is the best time to buy a phone, riding the general consumerist mood around Black Friday, which has been widely accepted and loved for its benefits and offerings.
More value for money
People save up and look forward to buying things at such opportune times because they’ll get more value for their money. The competition from stores and merchants also makes sure there are plenty of options that are all good and available to choose from.
For instance, Jumia’s discounts on TVs are known to be quite good; currently, a TV that would cost you Kes18,999 now costs Kes9500 after applying a 50 percent discount.
Kilimall, on the other end, has a live Black Friday sale from 1st – 30th November with crazy deals all around, with their notable products being phones. Products such as the newly released Itel S23 are being sold with discounts as high as 41percent off, translating to a buying price of Kes11,749 from Kes20,000.
Oraimo, the accessories giant, hasn’t been left behind, dubbing its campaign “Oraimo Green Friday.” The firm has discounted practically everything on its site, from earbuds to beard shavers, vacuum cleaners, external Bluetooth speakers, and much more.
In addition to that, home appliance giants like HotPoint, LG, Mika, etc., all have sales with great discounts on their products. Items like fridges, microwaves, dishwashers, washing machines, and so on are all part of the products included in their agenda towards this explosive shopping season.
Ideally, most if not all sorts of businesses and service providers have offers, incentives, and discounts concentrated in the months of November and December, making it one-half of the most popular and profitable shopping season that’s largely influenced by the festivities around the period.
Read also: Nyar Sindo’s guide to a supermarket floor
Windfall for media
As companies seek to push sales through advertising and campaigns, the media which has had a rough patch over the last couple of years as companies strategically trimmed marketing budgets post-Covid, has an opportunity to claw in much needed revenues.
Advertising spend according to media marketing firm ReelAnalytics fell from Kes71 billion in the first half of 2021 to Kes60 billion in the first half of 2022 before edging back up to Kes64 billion in the six months of this year.
“Overall advertising expenditure in H1 2023 increased by 2 percent compared to H2 2022. This was attributed to increased expenditure by advertisers within the Betting & Gambling, Media, Finance, Education and Agriculture sectors,” ReelAnalytics said.
Ever-rising cost of living
However, Black Friday coincidentally conflicts with an ever-rising cost of living that has been going past the roof , with fears it may see the lowest sales recorded over the last couple of years.
Kenyans have endured months of rising inflation from a declining shilling, absent rain, and a taxing government. Inflation rose to 6.78 in September close to the Central Bank of Kenya upper limit after all sectors recorded a general increase in prices.
More cost pressures are anticipated from government taxes and a jump in service fees, for instance, where, as per the new directives, you need no less than Kes2000 to replace a lost ID card or Kes50,000 to get a marriage license from the Attorney General.
Fuel prices have not gone down any bit and are expected to hit an all-time high of Kes300 per liter. The latest price hikes shot up after Energy and Petroleum Regulatory Authority pushed up fuel prices that has a big effect on inflation in the Kenya pushing up transport costs, power generation and agricultural produce, while kerosene is used in many households for cooking and lighting.
Additionally, with the impending El Nino, food prices may remain elevated on the threat of crop destruction. Unga prices still at the shocking Kes210 mark, sugar prices too haven’t gone down from Kes260 a kilo, and to make matters worse, grocery prices have began racing up. Onions, tomatoes, cabbages, potatoes have all had their prices rise significantly in the markets.
According to consumer research firm, Pierrine Consulting Kenyans are coping by taking matatus instead of driving or using taxi rides, buying less fuel- no more Jaza tank, have cancelled on online delivery and are spending less on new household items.
Literally, everything is on the brink of becoming too expensive or unbearable, and now an opportune moment to do your shopping comes up. The question is, will people afford it? Will people go out of their way to get these things considering the incentives?
Pierrine Consulting believe consumers may still make those impulse deal led purchases where advertising has good vibes, humor, celebrates everyday life moments, and leverage relationships in the lives of Kenyan consumers. The firm said brand engagements are light-hearted and create happy memories will score high on resonance now.
The firm said product launches must also be affordable because consumers are now more pragmatic and will buy new products if these are within their expected price range for the category.
“In spite of current headwinds facing consumers, we see the application of the lipstick effect; as the decline in spend does not apply to all product categories. Kenyan consumers have increased spend on local travels, beverages, beauty products, skin care,” Pierrine Consulting Ceo Seyi Adeoye said.
