Peak retailing 2016: what UK retailers can learn from Singles Day
Last weekend's Singles Day saw shoppers spend $17.8bn (£14.3bn) on Alibaba's Chinese and international marketplaces – 24% ahead of the previous year. Mobile devices drove 82% of that figure, which represents the total gross merchandise volume (GMV) settled through Alipay on Alibaba's marketplaces.
At the time, Daniel Zhang, chief executive of Alibaba Group , said the 11.11 event was "a preview of the future of retail, where entertainment, commerce and interactive engagement intersect seamlessly” and of how "online and offline retail will be reinvented to offer brand new shopping experiences to our hundreds of millions of mobile, digitally-savvy active users.”
Alibaba Group was far from the only retailer involved. In a Quick Take report, Forrester quotes its rival JD.com as stating that Singles Day orders were up by 78% year-on-year, and that it had overtaken its 2015 total volumes by 2pm on the day. Halfway through the day, JD.com said that 85% of its orders had come via mobile devices, up from 74% in 2015.
So what can UK retailers learn from the event, which has now established itself as the biggest online shopping day in the world, as they prepare for Black Friday?
A Forrester Quick Take
report on Singles Day says key trends in this year's event included aggressive discounting, creative promotions, the growing popularity of global brands, increased cross-border shopping and a focus on online-to-offline retail. It says that promotions around the event started well ahead of 11.11 – Alibaba's 11.11 Global Shopping Festival ran for 24 days rather than 24 hours this year. Live streaming and augmented and virtual reality all emerged as shopping tools this year, while there was a real focus on improving logistics.
The report suggests that retailers selling to Chinese consumers in future should learn from the experience to create a sophisticated shopping experience that is personalised through the use of data, while investing in retaining customers.
Perry Krug, principal architect at database specialist Couchbase
, says the event was "the single biggest feat of data logistics of all time – a remarkable demonstration of what the digital economy can achieve" and one that UK retailers can learn from.
"Millions and millions of customers have made purchases from their smartphones, laptops and PCs, transferring digital money in exchange for physical or digital goods," he said. "Now, they’ll be making their returns, complaints and reviews online. Customer payment information will need to be stored and secured, physical goods tracked across one of the largest countries in the world and delivery assured for every single package. Days like these are data management tasks of mammoth proportions: data will make or break them. Just imagine if Alibaba’s database were to have buckled under the intense strain - it would be catastrophic for the company. Ahead of Black Friday and the Christmas shopping period, this shows our retailers that any kind of disruption could put the future of their entire organisation at risk.”
Geri Tuneva, head of marketing at data science and personalisation business Qubit
, says retailers need to understand their shoppers, and how shoppers that buy at peak approach the task in order to reap benefits. "It’s important that retailers identify the best opportunities to tap into shopping 'peak' periods, and in recent years, Singles Day has increasingly become one for retailers to have on their radars," she said. "Having evolved from a homegrown anti-Valentine's Day event in China into one of the world’s biggest online shopping days, Singles Day now offers huge opportunity for UK retailers to capture sales from overseas shoppers, as our data shows. However, as is inevitable with any shopping peak, it’s now incredibly noisy.
"For any brand or retailer considering getting involved next year, the only way they will be able to cut through the noise is by focusing on better understanding the mindset, behaviour, intentions and preferences of consumers shopping next 11th November. In the absence of prior experience of selling to shoppers in Asia, retailers will need to focus on quickly collecting the right data, bringing it together across their channels and then using it to create relevant experiences for each and every shopper in the lead up to and during Singles Day."