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Nowhere left to run: Can ‘super sales’ days continue?

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And so it begins. Yesterday was Singles Day (or 11.11, or even ‘double 11’ – as the Chinese now call it, the many ones signifying ‘aloneness’) and Singles Day this year is pretty much the starting gun for a crazy six weeks between now and Christmas. Six weeks of highs and lows. Six weeks of website crashes and traumas. Six weeks of trying to bag as much cash as you can to see you through the winter.

A look across Internet Retailing and our sister site will show you that as etailers, you now live in a ‘holiday season’ dominated by special days. But is this ‘deal economy’ really such a good thing?

Take Black Friday, which is on 27 November this year (as if you didn’t know!). Projected revenues this year are more than £1billion in the UK alone. Many retailers are already heavily discounting in the run up – apart from ASDA, who doesn’t want to play – and rather than creating a sales bonanza, it is actually hitting profitability.

Research by IRI Group shows that more than half (54.6%, to be precise) of items sold in the UK were sold as part of a deal – either a direct heavy discount, or as part of a bundle. UK consumers love a deal. While it keeps sales ticking along, what it really achieves is to erode what consumers are willing to pay for anything. Great for consumers, not so great for the long term prospects of many retailers.

The real problem comes when events such as Black Friday come along as this forces retailers to apply even heavier discounts to play along. They have to discount the discounts. All this tends to come home to roost on the last day of January when businesses go bust – the real Black Friday. Since 2013, 150 well-known retailers have gone bust. This will be added to in January 2016.

Mobile is playing a big part in this – as is wider e-commerce – as it is allowing shoppers to hunt down bargains like never before. But mobile too could well hold the key. Eventually the ‘super sales’ days will peak and start to decline – simple economics dictates that – but retailers need to do more to make the shopping experience better and mobile can make that happen.

Mobile is a technology rich in data. In many ways it is the pivotal technology in the so called “internet of things” as it provides way more information about its user and their habits than you would at first assume. Leveraging this data is going to be key to making smarter business decisions, save money on marketing by being more targeted and, if you are lucky, starting to make your customer experience the differentiator between you and your customers rather than price.

As Dan Wagner, CEO and Founder of Powa Technologies says: “Using the deep-dive data generated by these digital customer interactions, retailers can move way beyond large impersonal campaigns and reach each one of their customers on an individual level. Retailers finally have the ability to bring the science of ROI to offline advertising methods such as billboards and newspaper adverts as captured data is instantly updated when a product is purchased. This allows for a whole range of engagement opportunities such as personalisation, timely cross- and up-selling opportunities and location-based promotions. The current status quo, where retailers are surviving on scraps of useful customer engagement data regarding the effectiveness or impact of their multi-million pound marketing campaigns is untenable. For any business looking to survive in such an intensely competitive market, getting to grips with these new data sources is essential.”

Love him or loathe him, Wagner is right. While so much attention is being heaped on Singles Day, Black Friday, Cyber Monday and the general discount culture, retailers need to be looking more deeply into how to erode the move towards simple discounting and start to retail more smartly. And the first port of call is in using the data that you can get on your customers. Only then will Super Sales days be offset by something meaningful. Perhaps ASDA isn’t so daft after all?

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