A Black Friday became, in a few years, one of the main dates for the retail Brazilian. The expectation for the event, which will take place on the 26th of this month, is for growth. However, experts cite challenges for the date, such as the inflation and the interest rate, which high discourage consumption, and supply chain problems, which should not lead to a shortage of products, but will keep prices high.
Combining the factors, the main consequence for the consumer on Black Friday this year is that the discounts are not expected to be as large as in previous years, according to experts. Even so, the reopening scenario generates optimism in the sector.
The challenges
One of the main difficulties that Black Friday will face this year is not an issue exclusive to Brazil. Problems in supply chains have led to shortages of some products, and the most affected sectors are those that demand semiconductors, such as automobile and electronics.
Disruption in supply chains has intensified with the pandemic, and everything indicates that it will remain in place until at least part of 2022. “It may affect, yes, because the main products sold on that date end up being impacted by this worldwide problem”, says Kelly Carvalho, economic advisor at FecomercioSP.
“The entrepreneur has already been working with a smaller stock because of this, and there is the question of the dollar. Many products are imported and can be impacted on the issue of price, with a smaller discount”, says Carvalho.
In general, however, Brazil was not one of the most affected by this crisis. Alexandre Crivellaro, director of market intelligence at the Brazilian Electronic Commerce Association (ABComm), says that the trade continued to sell well, with a large offer of technology products.
The lack of chips also does not affect all sectors in the same way, according to Jorge Nascimento, president of the National Association of Manufacturers of Electronic Products (Eletro). He claims that the problem has a greater impact on sectors that demand more powerful processors, such as automobiles and smartphones. The home appliance sector, on the other hand, has been little affected.
“In general, we are able to guarantee the supply, so we will not fail to supply the market under any circumstances,” he says.
He also points out that Brazil has been facing a high cost of production, resulting from the rise of the dollar, the cost of energy, fuel and the price of containers. This scenario limits the discount space for many companies. Before the pandemic, shipping via container cost an average of US$1,500, and today it is around US$15,000, which discourages imports.
Domestic X imported products
Nascimento states that consumers should not find changes in the quantity or variety of products, and that there will be no shortage of national products on Black Friday or on Natal.
In relation to imported products, he says that there is a risk of shortages with the global shortage scenario, but that this is more likely to occur at Christmas. As most Brazilian companies have domestic suppliers, the sector “has been fleeing from this crisis”, according to him.
Inflation and high interest
But if Brazil is better dealing with the supply crisis, the domestic crisis is a problem. The main “novelty” that should affect Black Friday is high inflation, as well as the interest rate, a combination that, in general, discourages consumption and reduces the population’s purchasing power, in addition to raising production costs.
“This scenario can interfere in relation to discounts, which used to reach an average of 40%. I think it will drop a lot because many equipment are up to 30% more expensive. For some categories, electronics and home appliances, you must pay, at most, the January price. Others such as fashion, accessories, home and decoration, prices are very linear, so there may be an interesting discount”, says Crivellaro.
Fernando Baialuna, business and retail director at GfK consultancy, says that the unemployment scenario is dollar already existed in 2020, so the impacts of these factors should be similar to those noted last year.
Studies by the consultancy show that, in general, Brazilian consumers are willing to buy and spend as much as last year, looking for a better product. “But even with this desire, this repressed demand, it is difficult to stimulate purchases, because prices are higher and there is income restriction”, he says.
Fuel price
Another problem that has intensified this year is the rise in fuel prices. As road transport is the main way to take the products purchased to the consumer, it is possible that this will impact Black Friday.
“If there’s an urgency, he’ll be willing to pay a higher price, but it’s worth seeing what delivery options are offered. The cost for delivery is higher with the rise in fuel prices and ends up, somehow, being passed on to the consumer”, says the advisor at FecomercioSP.
The expectations
Even in this scenario, there is a factor in particular that encourages the retail sector for Black Friday: the reopening. According to Kelly Carvalho, the e-commerce grew during the pandemic thinking about the share of retail billing, but the impact is still small.
“E-commerce went from 5% to 10% of retail sales, but the role of physical retail is still important. Therefore, reopening helps a lot. We have never gone through such a strong crisis. The recovery must be positive. Black Friday is a good thermometer for Christmas”, he says.
Both Abcomm and FecomercioSP expect an increase in revenue, but with an average ticket (price) paid by consumers less than that of 2020. The association’s calculation considers the expectation of retail sales in 2021 between R$ 150 billion and R$ 160 billion.
“Traditionally, Black Friday represents 4% of sales in the year, so less than R$5.5 billion will not be”, he says. The value would already be higher than in 2020, when sales also grew and were around R$ 5 billion, and Abcomm works with a ceiling of approximately R$ 6.4 billion.
Another factor that should help the date, according to the director of GfK, is a greater amount of promotions and installment options compared to 2020, a way that retailers have found to encourage purchases.
“In 2021, the percentage of promotional items is a little higher than in 2019. Consumers learned to wait for Black Friday to have this discount, there is this expectation”, he says.
The consultancy’s expectation is that the Black Friday of 2021 will keep the trend of 2020: an increase in sales, but with a smaller amount of units sold. A survey by the National Confederation of Commerce of Goods, Services and Tourism (CNC) goes along the same lines, pointing out that the date should grow 3.8% compared to 2020, but with sales volume falling 6.5%.
Jorge Nascimento says that the sector of home appliances has a more conservative expectation. “The scenario is not the best, if you tie [com 2020] or grow up to 5%, being optimistic 10%, we will be satisfied. It may be little, but the economic environment is complex”.
According to him, the function of Black Friday in Brazil is different from the original date, in USA. There, it is used as a stock-out before renewal at Christmas, and is restricted to one day.
In Brazil, Black Friday ended up expanding to the entire month of November, with the expectation of cheaper products and launches. “Brazilian consumers use Black Friday to give themselves, and Christmas to give gifts to others. Efforts are being made to have much more interesting prices, considering the day-to-day situation and high inflation as well”, says the president of Eletro.
Fashion and food
There is also the expectation that other types of products will gain more space on the date, such as food and fashion. Food was heavily affected by inflation, and the date could be used by supermarkets to sell more, as they entered e-commerce with greater intensity during the pandemic.
“In the case of fashion, it’s promising because it took almost two years with the population changing priorities, clothing is no longer a priority, so, imagining that last year was difficult, it’s positive, but Natal tends to be better. Food is the opposite, as 2020 was a spectacular year, with people more at home. With the resumption of social meetings, the more sophisticated food sector can work on the event to have good sales”, says Baialuna.
Even so, electronics are still expected to dominate the date. “We are betting that Black Friday is a resumption, a return to consumption, even with the economic insecurity, even to help the economy”, says Jorge Nascimento.
Reference: CNN Brasil
I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.
.jpg "Charles Spencer on the death of Princess Diana: “Losing a sister is like suffering an amputation”")
