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PEAK 2017 From Singles Day to Black Friday planning

The way people shop over Black Friday and Christmas tells us far more than how people are getting on with their present shopping. The changing way that shoppers are buying becomes magnified thanks to the sheer volume of transactions at this time of year. In addition, time-pressured shoppers look for, and adopt, new ways of doing things that they may then continue over the rest of the year. With this in mind, InternetRetailing is devoting a regular twice-weekly slot to peak shopping season 2017, highlighting the stories that struck us as most interesting over the last few days. This week, the focus is on Singles Day, the John Lewis ad, and getting ready for Black Friday.

Starting with Singles Day

We’re starting our Peak 2017 coverage with Singles Day. The Chinese shopping event marks all the ‘1’s on 11/11 and has in recent years become the de facto starting point of the peak shopping season.

This year WorldPay is predicting a bumper day for retailers marking the event. Last year, it says, it processed 39% more Singles Day-related payments, handling 14.9bn transactions worth £451.1bn, than it did the previous year. Its systems were busier on Singles Day, handling 137% more orders, than on Black Friday. The benefit was by no means restricted to China – WorldPay handled 19% more transactions for UK businesses than it had the previous year. This year it predicts an even bigger benefit as the weak pound looks likely to attract Brexit bargain hunters.

Maria Prados, VP global retail at Worldpay, said: “For UK businesses looking to break into the huge Chinese eCommerce market, Singles’ Day should be an important landmark in the calendar year. The current economic climate means international shoppers get more for their money when buying British. Combined with the rising purchasing power of the Chinese consumer, the pound’s performance could mean big bucks for UK brands on 11 November, but only if they are well prepared.

“To turn browsers into buyers, it is essential to tailor the online shopping experience to local tastes. For Chinese consumers, this means focusing on your mobile proposition. Shoppers expect to use their preferred payment option – increasingly e-wallets like Alipay and WeChat Pay – and merchants should offer a cutting edge checkout experience to attract tech savvy consumers.”

Meanwhile, the Royal Mail [IRDX VRYM] also flags up the size of the opportunity in its latest Delivery Matters report. It says that 55% of China’s online shoppers bought from the UK in a three-month period, spending an average of £104 per month on items from British retailers. Why? Many (87%) like to buy British brands, and most (76%) trust items from UK sites not to be counterfeit. China is a good source of custom: the average online shopper spends £123 a month over the internet, compared to £89 in the UK. It’s important in selling to the market, says the Royal Mail, to take into account Chinese shopping preferences, with 79% buying from a smartphone, compared to 28% of UK shoppers.

“By 2020, China’s e-commerce market is set to be larger than those of the US, Japan, Germany, the UK and France combined,” said Nick Landon, managing director of Royal Mail Parcels. “UK brands are really clicking with China’s shoppers and have a unique advantage as their goods are perceived to be of premium quality. UK retailers should feel confident that exporting to China can deliver benefits to their business. Breaking into this market has been made much more straightforward thanks to Chinese third-party platforms such as Alibaba’s Tmall.”

When it comes to delivery, says Royal Mail, China’s online shoppers have high expectations and 88% spend time hunting for websites with free delivery. When China’s shoppers are satisfied with their delivery, 92% are more likely to buy from retailers again in the future. The study, part of Royal Mail’s annual Delivery Matters report, asked 1,500 online shoppers in China about their shopping habits and preferences. Returns are more important to China’s shoppers, in comparison to 2015, with over nine in ten (91%) more likely to shop with a retailer that has a clear returns policy.

The John Lewis Christmas ad

The other start of the 21st century Christmas shopping period is the launch of the Christmas ads, and while retailers such as Argos and Currys have already released theirs, there’s always huge interest in the John Lewis ad. As in previous years the Moz the Monster ad has been released across digital channels – the John Lewis website and on its YouTube channel – as well as on TV and via social media.

Craig Inglis, John Lewis’s customer director, said: “This year’s Christmas campaign brings to life the power of children’s imaginations and the joy of great friendships. Moz and Joe’s story is magical and heartwarming and I’m sure it will be loved by all of our customers, young and old.”

Black Friday planning

There’s debate over just how much UK households are preparing to spend online this Black Friday and Cyber Monday weekend. GoCompare Credit Cards says it will be £3bn, with each UK household spending on average £108. It says almost a third (31%) of households will check out the sales – 49% online, 21% on the high street, and 9% via their smartphone – and that clothing and accessories, toys and games, and health and beauty products head this year’s sale shopping list.

But Finder.com puts the figure at more than £4.5bn, as Britons spend an average £300. It questioned 2,000 UK adults and says more than 14m adults will have saved up for the event.

Either way, it adds up, and Raj Sond, general manager of First Data says it pays to be ready. “UK retailers must prepare for the significant spike in sales that will occur on Black Friday and Cyber Monday,” he said. “We’re expecting a large uptick in card transaction volumes on these dates. Perhaps more importantly, both of these shopping peaks are making significant gains year over year. In 2015 there were 329,000 transactions on Black Friday, growing by 22% in 2016 to over 400,000. Similarly, for Cyber Monday – there were 217,000 transactions in 2015, and in 2016 we saw a 24% growth in volumes to 270,000. It is more than likely this trend will continue and we will see transactions increase again this year.

“Also, consumer awareness is at an all-time high and there are increasing expectations for Black Friday and Cyber Monday deals to be found. This means people are looking for somewhere to spend money and SMEs would be wise to entice them with promotions rather than let them go to the big retailers to spend their cash – it’s a great opportunity to attract new customers.

“When it comes to the Black Friday rush and the Cyber Monday deal hunters, retailers need to make sure they’re prepared with plans to attract new customers and reliable technology that will make the shopping experience slick, so customers continue to return after the Black Friday rush.”

It’s also important, says Andrew Tavener, head of marketing at Descartes Systems UK, to plan ahead for supply chain issues. He predicts more and more retailers will feel compelled to lower their prices in order to retain customer loyalty while bringing in new business. “But,” he said, “this places a huge strain on the supply chain due to the sheer number of deliveries, the amount of preparation and the extent of stock management needed for these days to run smoothly.

“For retailers to succeed in these changing times and comply with their customers’ evolving needs, they must ensure they have the supply chain infrastructure in place to plan effectively for peak demand generated by sales and marketing campaigns, and to meet the expectations set by them. In doing so, there’s an intrinsic need to become ever more innovative, flexible and data-driven with the management of expectations for faster delivery and instant stock replenishment. Bargain days can, after all, cause more harm than good if, on the day, stock is not available or can’t be delivered within the allotted delivery time.”

The answer lies in automation, he suggests. “Automation is now the only effective route to achieving the level of flexibility and scalability needed to achieve this. From strong interfaces for data exchange, through to stock receipts, cross docking, over refilling, pick-pack-ship, local carrier integrations, reverse logistics handling and order-status updates along the whole order lifecycle, automated processes via a warehouse management system specifically geared to ecommerce fulfilment are key to this joined up approach.”

Mentioned in this piece…

Royal Mail

Royal Mail

IRDX: VRYM

Royal Mail is the postal service in the United Kingdom of Great Britain and Northern Ireland. Royal Mail Holdings plc owns Royal Mail Group Limited, which in turn operates the brands Royal Mail and Parcelforce Worldwide. (more…)

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