Each year, InternetRetailing takes an in-depth look at the peak trading period. In part, that’s because it is most important time of the financial year for many UK retailers. It’s also because shopping takes place at a higher rate in the run up to Christmas, meaning that any changes in customer behaviour are seen sooner and more clearly.
The opening event of peak trading season, Singles Day is now a wrap for this year. Goods sold via Alibaba Group’s Tmall and Taobao platforms came in at a “flattish” level compared to last year, when the group saw gross merchandise volume (GMV) of RMB540.3bn ($84.4bn). During the course of this year’s 18-day campaign, which finished on Friday, 21m products were on offer to Chinese shoppers, and, says Alizila, the media arm of Alibaba Group 1,009 brands selling on Tmall Global saw their GMV more than double year-on-year. Some 70,000 brands participated for the first time, including luxury houses Bulgari, Moncler and Brunello Cucinelli.
Alizila reports “robust growth” in categories from well-established areas such as beauty and consumer electronics, to emerging areas such as pet products and outdoor sports. Technology from virtual influencers to autonomous robots was used to support sales. Upmarket shopping platform Tmall Luxury Pavilion launched a virtual influencer called Timo to showcase digital collectibles from luxury brands, while more than 700 Xiaomanlv autonomous delivery robots.
“We deeply feel the resilience and vitality of consumption,” said Chui Xue, president of industry development and operation center of digital marketplaces Taobao and Tmall, on Friday.
Meanwhile, during the event, marketers turned away from focusing on discounts and towards customer membership programmes to generate all year round revenues, according to Bain & Co partner James Yang speaking on Alizila’s podcast. Alibaba’s own 88VIP club has 25m members, who spend an average of $8,000 a year.
Black Friday forecast
Closer to home, there are predictions that UK shoppers will spend more over the Black Friday weekend than last year, as they look to get their Christmas shopping done early – and with discounts. But spending on Black Friday itself is predicted to be lower than last year. Meanwhile, there are wider warnings that shoppers will spend 3% less this Christmas than last.
In its annual Shopping for Christmas report, Vouchercodes and Global Data predict that shoppers are expected to spend £22.62bn over a two-week Black Friday period, from November 11 to December 5. That’s 2.1% up on last year. Over the Black Friday weekend – from November 25 to 28 – shoppers are expected to spend £8.71bn (+0.8%). But on Black Friday itself, sales are expected to fall 5.8% to £3.01bn as attention shifts to the World Cup instead – where England will be playing the USA from 7pm. The following days, Saturday and Sunday, are then expected to be busier, with sales rising by 10.4% to £2.53bn.
There’s also a prediction that in-store sales will rise by 21.1% to £3.9bn over the Black Friday weekend during the first year without Covid-19 restrictions or health concerns, while online sales will decline by 11.2% to £4.8bn.
Researchers found that 39% of survey respondents say they are likely to buy over the Black Friday weekend and 16% are very likely to do so. A further 41% say they are likely to spend more this year than last. Footwear and clothing purchases are planned by 47% of shoppers, while other key categories are set to include electricals (44%), toys (37%) heath and beauty (32%) and games and music (24%).
Maureen McDonagh, SVP international and managing director at VoucherCodes.co.uk, says: “With Christmas sales expected to fall by 3% on last year, Black Friday is an important opportunity for retailers to provide their customers with the much-needed value during an incredibly difficult period, especially on must have items for food & drink and gifts for loved ones.
“Black Friday is incredibly busy for discounting so retailers need to consider how their offers stand out and are relevant to maximise sales. With less disposable income available, additional customer initiatives such as rewards, loyalty and flexible delivery options can be the deciding factor between a customer choosing between two competitor brands.”
Shoppers set to spend less – and returning to the high street
More than a third of shoppers plan to spend less this Christmas season, even though they will be returning to the high street post-Covid, new analysis suggests.
Digital quality testing provider Applause questioned more than 4,750 respondents from markets including the UK, EMEA, the Americas and APAC. In the UK, 38% said they planned to spend less on festive shopping this year than last – slightly ahead of the global average of 35%. More than half (54%) prefer to do their seasonal shopping on laptops or desktops, but mobile devices (46%) are gaining ground – though 48% said they were unlikely to use a voice activated smart device to buy gifts, and 33% said they never would. And globally, 70% of respondents said they had used click and collect for Christmas purchases – up from 58% in 2021.
“Retail has become an even more competitive and complex industry as a result of COVID, with shoppers interacting with brands across multiple touchpoints and demanding seamless, unique experiences,” says Luke Damian, chief growth officer with Applause. “The shopping data we’ve collected over the festive period from the past three years shows how that landscape continues to evolve
Black Friday – getting longer and overlapping with the World Cup
Charles Allen, retail analyst at Bloomberg Intelligence says the Black Friday period is likely to get even longer this year. “Most promotions for Black Friday are pre-planned with the merchandise specially bought. This is particularly true for electronics and other durable goods. Retailers have had to accept that consumers expect to spend on or around Black Friday so not participating translates into market share loss.
“This year, it looks as if retailers are trying to spread this spending period over several days or even weeks. For online retailers, this makes a lot of sense as it stops too much merchandise having to be shipped on a single day, with all the pressure of increased logistical costs making that particularly problematic this year. For retailers that are usually less involved in Black Friday (many store-based clothing retailers), there may be some excess early season merchandise that didn’t sell as strongly as expected because of the warmth. Some of these promotions, which are essentially transferring after-Christmas discounts to November, may be a somewhat larger than planned.
“With the FIFA World Cup, starting on the 20th November, there are some overlaps with Black Friday, so typical World Cup promotions, such as new TVs may be overlaid with the Black Friday ones. The England vs USA game falls on Black Friday. The coincidence of the World Cup and Black Friday may even encourage some food retailers to label promotions of snack food as “Black Friday” deals. The winter World Cup is unprecedented for the UK (and Europe) so it’s not yet quite clear how the normal pattern of gatherings will play out if it is more difficult to be outside. It is expected that ‘Christmas party food season’ will probably be extended by the World Cup with supermarkets going full-throttle on such items.” He predicts that spending could be quite slow in the early weekends of December as interest in the World Cup mounts, especially if England progress and play on successive weekends.
A Cyber Aware campaign has been launched by the National Fraud Intelligence Bureau (NFIB) and the National Cyber Security Centre (NCSC) – part of GCHQ – to warn shoppers that online shopping scams cost customers an average of £1,000 each last year. In total, shoppers were scammed out of £15.3m between November 2021 and January 2022, according to analysis of reports to Action Fraud, analysed by NFIB. Shoppers aged between 19 and 25 were the most likely to be victims, with fraud most likely to take place on social media sites, and to involve electronics (20% of 19,744 reports) and mobile phones (13%).
Commenting, Steve Bradford, senior vice president EMEA at SailPoint, says: “During the holiday season consumers need to be extra vigilant for fraudsters. Between November 2021 and January 2022 a staggering £15.3m was lost, and the NCSC’s warning about online perils for shoppers during this period serves as an important reminder for cybersecurity awareness.
“Opportunistic bad actors will use seasonal retail surges to their advantage as they look to obtain financial and personal information. Fraudsters could use fake retailer websites that mimic real ones, or engage in phishing on social media accounts, posing as a customer service agent.”