Buyer activity against the backdrop of the November sales is lagging behind last year’s
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This year, contrary to the expectations of retailers, the first stage of the November sales did not lead to an increase in demand. In the first days of the promotions, buyer activity decreased by 4–7% year on year, although the chains’ turnover in money is increasing due to rising prices. Market conditions this year are radically different from last year: against the backdrop of currency exchange rate fluctuations, Russians made large purchases without waiting for Black Friday and Singles’ Day. But marketplace sellers may be able to make money on sales.
This year, the activity of buyers against the backdrop of the November sales is lagging behind last year. As follows from the “Check Index” review prepared by the fiscal data operator “OFD Platform”, the number of purchases on November 1–7 decreased by 4–7% year-on-year.
Analysts note that following the results of autumn sales, consumer demand is unlikely to reach last year’s levels.
At the same time, according to the OFD Platform, retailers at the first stage of sales recorded an increase in sales in monetary terms by 15%, which is associated with a price increase of 12–20% year on year. Anna Mankova, senior director of the retail real estate department at CMWP, also noticed a decrease in demand, although the turnover of chains these days increased by 5–15% year on year.
The end of the year is a busy period for retail. In November, the sales season begins, timed to coincide with Singles’ Day celebrated on November 11 and Black Friday, which falls on November 24 this year, and smoothly flows into the pre-New Year’s rush. In recent years, sales have been launched earlier than usual, Yukassa notes. Active sales, according to Evgenia Khakberdieva, director of the NF Group retail real estate department, continue until the end of January, when new collections arrive.
Check Index analysts partly attribute the general decline in demand to the high base: at the beginning of last November, the number of purchases increased by 20-30% year-on-year.
This was explained by the pent-up demand effect characteristic of last year: until the end of autumn, consumers adhered to the savings model. This year, many Russians approached the sales having already made large purchases, as indicated by good sales in October, according to the OFD Platform.
In the “Clothing and footwear” category at the beginning of November this year, the number of purchases, as indicated in the “Check Index” review, turned out to be 8% lower year-on-year, although in October they were talking about an increase of the same 8%. In the case of electronics and home appliances, sales in November fell by 7%, and October growth was estimated at 9% year-on-year. In the perfumes and cosmetics segment, a decrease of 6% was recorded at the beginning of November, while in October there was an increase of 5%.
Baon President Ilya Yaroshenko says his company has its peak sales in November. But this year, expectations for sales are low due to the prevailing warm weather, which does not encourage purchasing winter items. “It was a cold October, when significant sales were noted,” notes Mr. Yaroshenko. According to Stockmann CEO Gennady Levkin, this year sales in the first week of November were below expectations, but he expects demand to increase in the near future. Letual notes an increase in demand in the category of perfumes by 12% year-on-year, products for face and body care – by 30%, makeup – by 21%.
M.Video-Eldorado talks about double-digit sales dynamics year on year at the first stage of November sales. The company prepared for them by increasing inventory by 40%. But analysts do not predict records. “Chains of household appliances and electronics usually carry out promotions most successfully, but with the jump in the exchange rate, many buyers have already made their planned purchases, you shouldn’t expect a strong rush,” says Vyacheslav Katsegorov, director of strategic development of the Magazin Magazin company.
The decline in sales is not noticeable in all categories.
According to Check Index, purchases of sporting goods in early November increased by 25% year-on-year, household goods and repairs by 12%, and jewelry by 3%. But the most pronounced dynamics in November were shown by online platforms, where sales grew by 30–35% year on year. “The main beneficiaries of the growth in demand on marketplaces are their sellers,” states the OFD Platform.
Ozon is talking about a larger sale this year: 68.3 million products are participating in the Singles’ Day promotion, which is 2.5 times more than a year earlier, and 70% of sellers are involved. The marketplace expects to reach a record in terms of the number of orders and turnover of the site. Lamoda is counting on significant discounts due to the brands’ desire to sell winter collections.
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