What Can the US & UK Learn For Black Friday From China Singles Day?
Following another record-breaking Singles Day for Alibaba in China, what can retailers in the US and UK learn from the Chinese eCommerce giants?
November 12, 2019
This year’s Singles Day in China brought in a record $38 billion in sales for Alibaba. Over $1 billion was spent in the first minute, and the Chinese behemoth had actually already beaten last year’s record just 16.5 hours into its November 11 sales day, claiming a total of $38.4 billion at close.
That’s an increase of around 25% on 2018’s $30.8 billion, a slightly lower growth rate than between 2017-2018, which was 27%. Analysts believe this is due to China’s slowing economy and trade war with the US.
What is Singles Day?
Singles Day – November 11, chosen because the date is written as four ones – was formed as an anti-Valentine’s Day holiday in China, originally targeting people who aren’t in relationships to treat themselves to gifts. Alibaba started offering Singles Day discounts in 2009 and the event has grown to become a 24-hour bonanza of online shopping in China.
It has eclipsed the Black Friday/Cyber weekend sales period as the largest eCommerce event in the calendar. Adobe Analytics estimates that the long US holiday shopping weekend this year will generate total retail sales of $29 billion – around 75% of the Singles Day total.
Is it just Alibaba?
Alibaba’s competitors – eCommerce giants such as JD.com and brick-and-mortar retailers – have also jumped on the bandwagon, making Singles Day an even bigger event. The day has also seen traction outside China, with Alibaba’s Southeast Asia sister company Lazada offering discounts in Singapore, Malaysia, Indonesia, Thailand and Vietnam.
The event has even reached the US and UK, with brands including Nike, LEVI’s, boohoo, Elizabeth Arden, ASOS, Superdrug, Jo Malone, and Dorothy Perkins offering Singles Day discounts on their websites.
Why is it so big?
But China dwarfs these other markets, for several reasons. When it comes to eCommerce in China, the market is far more mature than its UK and US counterparts. Remember, eCommerce effectively skipped desktop in here. This is essentially a mobile-first eCommerce market, with eCommerce platforms, which reside in mobile super-apps, delivering excellent mobile shopping experiences. In China, eCommerce is engrained in the mobile experience as part of a wider ecosystem of gaming, social media and payment platforms.
How do retailers prepare?
To prepare for Singles Day, Chinese retailers organise their goods well in advance, with consumers registering their interest beforehand and completing transactions on the day. This means that retailers have advanced knowledge of what will be sold, with the whole functionality existing to facilitate flash sales.
The amount of revenue generated during Singles Day requires a different approach to Black Friday. This is about organised purchases rather than surprising consumers with offers – hence that $1 billion spend in the first minute. Many consumers already know what they want to buy before the eCommerce doors open.
What can other retailers learn for Black Friday?
So, how can retailers prepare for Black Friday? At a macro level, UK and US retailers need to know who their customers are to best prepare themselves for a sales launch. From a customer experience perspective, they need to be sure that they’re capturing a database of customers – after all, those deal-driven consumers who purchased goods last Black Friday are likely to return this year if the deals are as good.
Consumers will rarely visit websites or apps they haven’t been to before on Black Friday. Instead, people will return to buy products they’ve previously seen, rather than using the discount period as an opportunity to search for new brands. Therefore, retailers need to focus on generating interest in their products well in advance of the discount weekend.
With this year’s Black Friday falling on payday weekend, we expect it to be the biggest ever. Traditionally Black Friday sees consumers self-gifting, but being the last payday before Christmas means consumers will also be seeking Christmas gifts. While this represents a massive opportunity, it’s also a threat to the existence of many traditional brick-and-mortar retailers.
The day has evolved considerably since the days where shoppers fought over televisions in supermarkets, and queued outside shops from the early hours. To have any success, you need to incorporate a new level of planning and strategy, particularly online.
More than ever before, retailers must cut through the noise and be in the public consciousness as early as possible. Announcing Black Friday deals early encourages consumers to save products to shopping cart and prime them for deals to drop ahead of competition. While Black Friday will remain a day of discounts, we can expect retailers to start making noise about the event earlier than ever.
This trend means preparation is the difference between success and failure – especially with the day falling on payday weekend this year. Not only does planning months, or even a year, ahead help you capture the attention of consumers, but it’s vital in meeting some of the greatest challenges of the season, including discount rates, products, stock and delivery.
Podcast – How retailers can make the most of Black Friday 2019.
On 30th October, Andy Mulcahy, Strategy and Insight Director at IMRG, sat down with Elliott Jacobs, Director, Agency and Commerce Consulting EMEA at LiveArea EMEA, to discuss the upcoming peak period and provide advice for those retailers looking to make the most of the event.