Insight around the world (IRM56)
Emma Herrod, Editor, InternetRetailing
China’s Singles’ Day on 11 November was the “largest shopping day in history” as consumers spent 60% more than in 2014 on Alibaba’s marketplaces. The company reported that £9.46bn ($14.3bn) was settled through Alipay as shoppers from around the world joined in with its ‘11.11 Global Shopping Festival’. Some £3.31bn (US$5bn) was spent online in the first 90 minutes alone. In the hours leading up to the official midnight start, almost 130 million users visited the Mobile Taobao app, exceeding the peak volume during the 2014 event.
Mobile was showing its dominance during the day as mobile transactions accounted for more than 68% of Alibaba’s gross merchandise volume, as 95 million mobile purchases were made on the Tmall.com and Taobao marketplaces.
Alibaba’s logistics partner and affiliate, Cainiao Logistics, received 467 million delivery orders during the 24-hour shopping period, more than 15 times the daily average of 30 million orders, and representing a 68% year-on-year increase. “This day demonstrates the power of domestic China consumption, and the Chinese consumer’s strong demand for international products,” says Daniel Zhang, Chief Executive Officer, Alibaba Group.
It also indicates the progress of the company’s AliExpress platform, which connects Chinese retailers with consumers across the world. According to SimilarWeb, AliExpress also provided strong results in the rest of the world, achieving one-day year-on-year Singles Day traffic rises of 11% in the UK, 58% in Russia, 34% in France, and 100% in Germany. Traffic was down 51% in the US though as Singles Day failed to grasp shoppers attention.
Moshe Alexenberg, SimilarWeb Head of Content, said: “Though much has been made of Alibaba’s extraordinary domestic sales in the face of the slowing Chinese economy, the soaring traffic for the company in new markets is a major win.
Parcelhero believes that it won’t be long until UK and US shoppers are as familiar with Singles Day as we now are with Black Friday and Cyber Monday. As the company’s Head of Public Relations, David Jinks, comments: “Jack Ma said last year that he hopes Singles Day will be a global shopping day for the US, Europe and anywhere in the world within five years, and we think he is correct.”Marcus Tober, founder and CTO, Searchmetrics
As the dust settles on the holiday shopping period, US retailers are busy studying their performance and the wider trends from Christmas 2015.
Overall sales rose 7.9%, according to data from MasterCard, with online purchases up 20%. While Adobe research indicates that online sales grew by over 10% to $73bn in the period up to 22 December. However, when and how consumers bought seems to be changing in three ways.
Firstly, shoppers are increasingly researching more of their purchases online, however they choose to buy. Some 62% of US consumers polled by Searchmetrics turned to Amazon to research Christmas gifts and 44% used Google searches. A growing number rely on social networks, with 27% looking at Facebook for ideas, and the same percentage using Pinterest. 16% said they’d look at Instagram and 12% mentioned Twitter. The battle to become the primary destination for consumers looking to research products before they buy is intensifying, with Google introducing new mobile features to Google Shopping that include showing product availability in nearby stores.
Secondly, it was very much a mobile Christmas. According to our research, 67% of consumers planned to research gifts on their smartphones, with 20% saying it would be the only device they used, making it essential for retailers to be visible in mobile search, for example. This is backed up by figures from Adobe, which reported that mobile devices accounted for around a quarter of sales and just under half (45%) of visits to retail websites between 1 November and 22 December. Adobe’s Digital Index also found that 33% of online shoppers bought using their smartphones over Thanksgiving/Black Friday – totalling 22% of all sales.
This links to the third trend – shifting buying patterns. Sales in some physical stores were down on Black Friday itself, reducing overall spending by 10% according to retail analytics specialist, ShopperTrak. However MasterCard data points to online sales growing by 20% between Black Friday and Christmas Eve, showing a move away from Black Friday/Cyber Monday.
For Christmas 2016, retailers need to ensure they incorporate these three trends into their strategy.Emma Herrod, Editor, InternetRetailing
The EU Digital Single Market came one step closer to fruition in December when agreement was reached on EU Data Protection Reforms. The European Commission put forward its EU Data Protection Reform in January 2012 to make Europe fit for the digital age and following final negotiations between the Commission, European Parliament and the Council, the final texts were formally adopted at the beginning of 2016. The new rules will become applicable in 2018.
The agreement will also mean that Data Protection Authorities will work more closely together in the future, especially through the one-stop shop mechanism to solve cross-border data protection cases.
The General Data Protection Regulation will enable people to better control their personal data, gaining easier access to how their data is processed, enabling them to transfer personal data between service providers, giving them a “right to be forgotten”, and the right to know when data has been hacked.
At the same time, modernised and unified rules will allow businesses to make the most of the opportunities of the Digital Single Market by cutting red tape and benefiting from reinforced consumer trust. The main points are:
Jim Burns, sales manager, Shorr PackaginG
- One continent, one law: The regulation will establish one single set of rules which will make it simpler and cheaper for companies to do business in the EU.
- One-stop-shop: businesses will only have to deal with one single supervisory authority. This is estimated to save €2.3 billion per year.
- European rules on European soil– companies based outside of Europe will have to apply the same rules when offering services in the EU.
- Risk-based approach: the rules will avoid a burdensome one-size-fits-all obligation and rather tailor them to the respective risks.
- Rules fit for innovation: the regulation will guarantee that data protection safeguards are built into products and services from the earliest stage of development (Data protection by design). Privacy-friendly techniques such as pseudonomysation will be encouraged, to reap the benefits of big data innovation while protecting privacy.
Each year during the holiday season, sales skyrocket for ecommerce companies. The sector has seen tremendous growth, growing at an incredible rate of 14% in 2014, according to the US Census Bureau. In this same time period, traditional retail only saw a growth rate of 3.8%. With an increase in online shopping over the holiday season, this also means ecommerce businesses have to process more returns.
Amongst US shoppers, the majority will not purchase from retailers which have a complicated or inconvenient returns policy. On the other hand, 95% of customers will do repeat business if the returns process is easy or simplified.
One of the most important things ecommerce customers value is free returns. Two out of three shoppers would buy more from ecommerce stores if returns were free. Companies asking customers to pay for return shipping see their sales decrease on average from 74-100%, whereas those offering free returns typically see a 58-357% increase in sales over the succeeding two years. The costs of free and streamlined returns are not cheap, however many businesses see benefits to doing it.
The main reason that shoppers say that items are returned is because they don’t meet their expectations. Other common reasons for returns include: the product did not fit properly; the wrong item was delivered; the product arrived damaged.
When trading in the US, retailers should have a clear and concise return policy that is easily accessible online, shows what the return window is, whether or not the consumer will receive a full refund or credit and who is responsible for the shipping costs. If you do these things and be proactive about preventing returns, you can eliminate as many returns as possible, which will not only keep your customers happy, but also help to improve the bottom line of your business.