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In 2024, Australian shoppers are navigating a stabilising economy, balancing their growing financial confidence with a more deliberate approach to spending. With Australian retail spending up by 3.4 per cent year-on-year in October 2024, cautious optimism is growing among both consumers and retailers.
Early results from BFCM suggest a positive outlook for retailers, with year-on-year growth in spending and a noticeable shift in consumer priorities. Shoppers are showing greater financial confidence while adopting a more deliberate approach to purchases, balancing value with quality. For retailers, this creates an opportunity to redefine engagement by leveraging personalisation, emerging technologies, and omnichannel strategies to meet evolving consumer expectations.
In Australia, BFCM has firmly established itself as a cornerstone of the retail calendar, rivaling Boxing Day Christmas sales. As we await final Australian BFCM results, initial numbers have been released from multiple sources, indicating positive year on year growth across all channels. Consumer confidence reached its highest level since May 2022 at 88.4, with the BFCM week sales resulting in a 12-point increase on the same week last year according to Roy Morgan.
Spending patterns reflected changing consumer priorities. NAB reported a 4 per cent rise in Black Friday spending compared to last year, with Black Friday outperforming Cyber Monday in total spend. Meanwhile, in-store shopping saw a notable resurgence, accounting for two-thirds of sales.
However, transaction volumes dropped by 4 per cent, indicating a more considered approach as consumers prioritise quality over quantity, opting for fewer items but higher-value purchases.
Mirroring Australia, globally, BFCM sales continued to rise, with Salesforce reporting US$315b in online sales, a 6 per cent increase, while U.S. online sales reached US$76b, up 7 per cent year-on-year.
While in-store sales dominated consumer spending over BFCM domestically, online sales – particularly mobile commerce – continue to dominate, with 74 per cent of online purchases made via mobile devices, up 23 per cent year-on year according to Power Retail.
Personalisation also played a crucial role, with retailers leveraging AI to drive product recommendations, promotions, and customer service. According to Salesforce, 20 per cent of global online sales during the period were influenced by AI-driven personalisation, achieving a 2 per cent higher conversion rate over than those who did not. Prominent examples include Sephora’s Virtual Artist, which uses augmented reality to allow customers to try on makeup virtually, and Nike Fit, which provides accurate shoe sizing recommendations through machine learning.
The adoption of buy now, pay later (BNPL) services in the US also increased, with Afterpay reporting 10 per cent growth in usage. In addition, according to Adobe, revenue from affiliate and partner channels in the US, including social media influencers, contributed to 20 per cent of revenue on Cyber Monday – a 6.8 per cent year-on-year increase, highlighting the growing influence of social platforms on shopping behaviours.
While promotional activities support sales for retailers, the emergence of ‘Black Friday month’ has challenged many retailers with promotions starting early November and potentially diluting December sales. To maintain momentum, retailers must shift from heavy discounting to offering new and exciting product launches in December.
Heading into 2025, consumer confidence is looking promising, with Roy Morgan reporting a 2-point rise in Australians feeling financially optimistic for the year ahead. This sentiment will likely spur strategic spending during key sales events, allowing retailers time to refine omni-channel strategies and leverage personalisation to enhance customer loyalty.
These trends underscore the need for retailers to develop agile strategies that capitalise on peak sales periods while building long-term customer loyalty. By staying ahead of these shifts, organisations can drive growth and adapt to evolving consumer demands.
To explore how these insights can inform your retail strategy, connect with our team of experts who can guide your organisation in areas such as buying and planning, supply chain logistics, store network optimisation and more.
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