Unboxing the economics of Black Friday

Australian shoppers are tipped to spend $1.54 billion in four days across the Black Friday to Cyber Monday sales period this year. Purchases on everything from sofas to washing machines to the latest fashions are forecast to boost sales 5.6 per cent on last year.

“Last year the biggest spend was $91.5 million on household appliances and furnishings – up 6 per cent on 2022."

Black Friday domestic spending across Australian states in 2022 and 2023

{image1}

And judging by previous years, most of the action is expected to happen online. E-commerce dominated the spending last year with 76.52 per cent of all transactions.

The expected rise in spending – based on ANZ card transaction data – contrasts with the $1.46 billion spent from Black Friday to Cyber Monday in 2023.

The research comes at a time in when many Australians have been facing a cost-of-living crisis, with higher inflation and interest rates.

In the US, Black Friday is the busiest sales period of the year and is seen as the start of the Christmas shopping season, coming immediately after their Thanksgiving holiday.

The trend has caught on in Australia driven by in-store and online sales, with the four-day shopping event this year kicking off on November 29. ANZ card data shows what people spent last year also increased 2 per cent on Black Friday spending in 2022.

And what do shoppers spend their cash on over the four-day sales blitz?

Last year the biggest spend was $91.5 million on household appliances and furnishings – up 6 six per cent on 2022. The second-largest category was clothing and accessories at $88.6 million – a decline of 1 per cent on the year before.

Top Black Friday spend categories in 2023

{image2}

Perhaps reflecting the high inflationary environment, $56.5 million was spent at discount stores last year - a rise of 9 per cent. Bricks and mortar stores saw a 2 per cent decline, compared to the year before, with $47 million being spent.

Technology sells

The category which saw the biggest surge in spending was digital goods which jumped 42 per cent to $13.9 million. This was driven mainly by Apple which had a 30 per cent share of this spend. Sales of Apple products alone surged 157 per cent compared to 2022.

The other top digital merchants where consumers snapped up deals included PlayStation Network, Spotify, Xbox, Steam and Audible.

Women spend more on the day, splashing out $728 million last year (up 1.6 per cent), with an average spend of $516. The biggest category was clothes and accessories where $61 million was spent, followed by furnishings and appliances with $47.2 million.

Men spent $709 million (up 1.2 per cent), with an average spend of $512. Last year, men spent $43.3 million on furnishings and appliances, $26.3 million on clothing and accessories and $23.6 million on motor vehicles, parts and accessories.

And which age group splashes the most cash over the weekend?

Gen X ($496m) and Millennials ($464m) lead in total spend, showing higher purchasing power. Both spend big on clothing and accessories. Gen Z has the lowest transaction value ($42m) compared to other generations.

Yiken Yang is Deposits and Payments Lead with ANZ