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Johannesburg – Online retailer Takealot.com launched #BlackFriday in South Africa five years ago. While at the time the event was meant to be a promotional effort for the brand, CEO Kim Reid now thinks of it as an annual exam.
Speaking to Fin24 at the Takealot warehouse east of Johannesburg on Tuesday, Reid shared the retailer’s expectations for this year’s event, known as the Blue Dot Sale, on November 24.
Commenting on the first #BlackFriday in 2012, Reid said: “We just brought it because we thought it was an interesting marketing opportunity to create an event in the country … it has grown in stature and impetus.”
#BlackFriday in 2015 was significant for Takealot as revenue generated amounted to R17.5m. In 2016 this more than doubled to R56m.
Reid expects this year’s event to be well received. “This year we reckon we will do anything between R80- to R130m, depending on how the day goes. It is a big day for us.”
Reid also expects sales to be “heavy” on Monday and the remainder of the week.
“The Blue Dot Sale officially runs from one minute past midnight on Friday the 24th (of November) until Tuesday the 28th,” said Reid.
Promotions run through the whole weekend and include Cyber Monday and Takealot Tuesday. The retailer will also be having a few early bird sales, for app users from Tuesday November 21, and Thursday November 23.
All hands on deck
Takealot has been making arrangements with suppliers three to four months in advance and has secured in excess of 15 000 different deals. Discounts could go as deep as 80%, said Reid.
The retailer will be releasing different deals throughout the day and a range of products are on offer including books, electronics, even fragrances and kitchenware.
Every year from January onwards, Takealot prepares for the buying period between October to December.
“October to December is what we call ‘season’, where things run hard." No one can take leave during this period, Reid explained.
On #BlackFriday traffic increases five times as much as a normal day. It is important for Takealot to have all the logistics in place such as enough drivers to deliver the goods and enough pickers and packers in the warehouses.
Takealot has two warehouses, one in Johannesburg and the other in Cape Town.
“We need to make sure we have the right amount of stock in the warehouses so that we do not run out of stock.
“We have to make sure we also do not have too much stock, If the volumes do not come then we will be sitting with a whole lot of stock that we will have to get rid of at even lower rates,” he explained.
Takealot also has to make sure its site and the payment mechanisms stay up. “We have gone down every #BlackFriday, without fail,” he said.
Last year multiple sites worldwide went down, but Reid assured that his team in Cape Town were “fired up” and dedicated to make #BlackFriday work by making sure that Takealot’s platforms are stable and that the volumes are handled.
“But things go wrong. Last year we had a payments issue where Bankserv went down.” This caused a lot of problems as Takealot could not take payments, he explained. “This year we are looking to mitigate that.”
Last year the retailer also had a challenge at its warehouses, which they are also trying to mitigate this year. Reid emphasised the importance of having back-up plans to ensure Takealot can continue to operate.
“We've pretty much done, I believe, what we can to make sure that we are in as good a position as we can be to run #BlackFriday,” he said.
“Every year is a test. This is exam time.”
Reid admitted that it may be a stressful period, but it is also a good time of the year to grow brand reputation among consumers.
“It is not normally necessarily as profitable as the scale that it gets run at, because the discounts are heavy especially over #BlackFriday periods. But we bring a lot of customers in and we create brand recognition,” he explained. The event also helps create confidence among consumers in the business through its execution.
#BlackFriday sales account for 2.5% of Takealot’s Growth Merchandise Value, this is a different measure to revenue as it considers the value of the sales it makes as a retailer and as a marketplace seller.
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