This November could be the first to overtake the December shopping season in terms of retailer revenue – at least in e-commerce.
Traditionally, most Hungarians don’t start their Christmas shopping before early December. Until recently, the last two weeks before the holiday were the peak season in retail. According to the National Association of Retailers (OKSZ), shoppers spent more than HUF 100 billion in supermarkets and retail stores on gifts between the December 9 and 24 in 2017, about as much as on perishable goods over the same period.
This year, however, due to the rising popularity of Black Friday sales and online stores, the peak season in commerce might come earlier. “In 2018 we are anticipating a turnaround. Our forecast shows that spending in e-commerce will be higher in November than in December,” said Balázs Várkonyi, CEO of Extreme Digital, one of the leading Hungarian online marketplaces, at a press conference last week.
According to Várkonyi, last year December accounted for 60% of the Christmas season (starting on November 16) revenues for Hungarian online stores. By contrast, in Romania, November revenues were more than 20% higher compared to December. Romanian retailers started advertising Black Friday sales about five years earlier than their Hungarian counterparts, leading to earlier Christmas shopping in the country. This trend is expected to come to Hungary as well.
Although last year, less shoppers were drawn to Black Friday sales than in 2016, both online and offline retailers feel growing pressure to hold November sales to stay competitive. Currently, Black Friday discounts are launched primarily by online stores: more than 80% of online businesses and 60% of traditional stores have some kind of discount.
Apart from lower prices, there is another reason Hungarian costumers might want to buy Christmas gifts earlier. In the last two years, the Hungarian postal service and many delivery companies were overloaded with orders in the weeks before Christmas. In 2016, thousands of packages were delivered late, some not arriving until January.
In the following year, the postal service even advised people to order their Christmas presents in October to guarantee timely delivery. While several online stores boosted their delivery services or started one from scratch to decrease their reliance on the postal service, many consumers are still anxious about another case of “package chaos” in December.
Some businesses try to get an edge by launching their discounts even earlier: traditionally, Black Friday is on November 23, however, some retailers (including Extreme Digital) hold their “discount day” on November 16.
Companies also compete over discount rates; however, attention should be payed to how stores are advertising their rates. Last year, several businesses were fined by the Competition Authority (GVH) over their Black Friday ad campaigns. Most commonly, GVH found the use of the phrase “up to” problematic.
According to the authority’s ruling, a store may only advertise its biggest discount (i.e. “up to 80% off deals!”) as long as at that discount is available on at least 10% of its products.