Photo: Alibaba
Singles Day 2016 is setting new records
Singles Day, the single biggest retailing day of the year across the globe, racked up $14.3 billion in sales last year. This year’s event is expected to reach $20 billion in sales by its close and apparently has already set a new record by reaching $15 billion after 19 hours and 37 minutes. Chinese shoppers scooped up offers as soon as the event began, spending $1 billion worth of sales in the first five minutes and $5 billion in the first hour. Consumers using mobile phones have accounted for 85 percent of purchases made.
Singles Day is seen as an opportunity for foreign brands to make inroads into the Chinese market. Brands from outside China represented 10 percent of total dollar transactions during last year’s event, according to Alibaba. The e-tail giant listed Apple’s iPhone 7, Beats headphones, Nike items and Dyson products among top sellers so far this year on its company blog.
“Many foreign brands, with and without local China presence, will use this shopping event to further raise their brand profile with Chinese consumers,” said Andria Cheng, an analyst at eMarketer, told Bloomberg.
- Live Updates: Alibaba’s 11.11 Global Shopping Festival – Alizila
- Alibaba Tops Singles’ Day Record as Chinese Consumers Rally – Bloomberg
- Alibaba Smashes Sales Records On Singles’ Day Hype – Forbes
- Singles Day: Alibaba closes in on record sales – BBC News
- Alibaba’s huge global sale sells $1B in first 5 minutes – USA Today
- Swinging Singles’ Day: Alibaba Holiday Drives Shoppers in China – The Wall Street Journal (sub. required)
- Should American retailers co-opt Singles Day – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Could the success of Singles Day in China be replicated in the U.S.? Is there any learning from how Alibaba markets the event that American retailers could use to better promote their sales events?
Poll
BrainTrust
Lee Kent
Principal, Your Retail Authority, LLC
Ken Morris
Managing Partner Cambridge Retail Advisors
Contrived promotional events are already a thing in the U.S. — Singles Day was partly inspired by Black Friday and, continuing the derivation, Amazon’s Prime Day was partly inspired by Singles Day.
The key is how “success” is defined. Many retailers and brands are increasingly struggling with margin pressure created by intensively promotional events like Singles Day.
For retailers or brands that are breaking even or losing money on promotional events, it’s tough to “make it up on volume” unless the event is hooked to a program like Prime that yields a sustained (and sustainable) lift in spend and wallet share.
Enough hype, deals and gimmicks are sure to turn some heads. I’m not sure I see what is so special about Singles Day other than that. I also don’t know what other special days they celebrate in China in a similar fashion. We have lots of sales and special days here so perhaps that may dilute the success, however giving the consumer great deals is sure to draw some bucks.
For my 2 cents.
The message here is the potential of internet retailing. China never had a brick-and-mortar retail infrastructure. Without that, this is how retail developed. It would be the same in the U.S. if we weren’t slowed down by the brick-and-mortar infrastructure.
This will be retailing in the U.S. in the distant future and closer than that in global marketplace. Maybe not Singles Day, but the majority of share of retail that is done online. U.S. retailers take note.
Plenty of retail-focused days exist. 3-15-30 (government check and paydays), and the 24 days of celebration and special events from Mother’s Day to the Superbowl to election night, seasonal climate changes and annual events such as back-to-school, offer plenty of opportunity for retailers and brands to wave their arms and generate sales. The real issue is the lack of alignment with the events of patrons’ lives through promotional and product information activities. Retailer could take a lesson from quick-serve restaurants, some of which have as many as nine day parts in their digital menus. Selling in the context of the consumer’s life is the next plateau of retail success.
Singles Day could be replicated in the U.S. but maybe there is a better option. What about making Cyber Monday equivalent to Singles Day? Since consumers are already accustomed to looking for online deals on Cyber Monday, why not magnify the significance of this day by making an event out of it? U.S. retailers could emulate a lot of the creative marketing campaigns that Chinese retailers do for Singles Day and make Cyber Monday a really big deal!
Consumers love the treasure hunt for deals and if U.S. retailers banded together around this day with special events, Cyber Monday could potentially become as big as Black Friday. Retailers, what do you think?
As the Chinese world is exposed to more Western shopping practices, this will become more successful. However, this success reflects the poor conditions which consumers face every day in China. No discounts, no access to major brands, no omnichannel marketing, no retail presence that Americans are used to every day. The percentage of fake products, consumer abuse and lack of discounts drives this day more than anything else.
We have seen the success of “holidays” like Singles Day already. Just last last July, Amazon’s Prime Day was a huge success. What drives the success of these holidays is not only the promotion of them, but also the business model behind them. Both Amazon and Alibaba use the Marketplace model, where 3rd party sellers offer products for sale. Amazon and Alibaba never pay for inventory or service; rather, they just collect a commission — it is an extremely profitable way to do business.
Furthermore, 3rd party sellers bring exponentially more products and offers to the table, allowing Alibaba and Amazon to achieve an endless aisle and ensure that their platforms will capture as many sales in a single place as possible.
Singles Day generates over 5x the revenue that Cyber Monday delivers to U.S. retailers and manufacturers. That’s impressive. However, there are some cultural difference in play when making the comparisons.
First of all, people in the U.S. have a cultural habit of being able to shop daily on a throughout-the-year basis. Secondly, retailers over the years have made U.S. holidays/special occasions a source of new revenues each month of the year … the winter holidays represent over $660 billion, back-to-school is $75+ billion, Mother’s Day is 21 billion, today is Veterans Day — it will see some 20 billion in retail sales, plus Easter, Mother’s Day, Father’s Day, Super Bowl Parties, Memorial Day/Graduation, and let’s not forget Saint Patrick’s Day.
Each of these days, as well as the success of Singles Day, depends upon execution. Be stocked up, get the team in place, have a game plan for before, during and after, offer values, and make certain you message is targeted to the right audience.
Is it easy? Heck no. But done properly, it energizes the entire team of retail associates and your customers.