Singles Day is disrupting the worldwide retail market and redefining all the existing standards of the industry. As the Alibaba-initiated phenomenon keeps on raising the bar, let's find out how the Chinese powerhouse has turned the tide of shopping behaviors in just ten years' time.
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Started as an anti-Valentine Day celebration by Alibaba in 2009, people believed that Singles Day would replicate the Black Friday shopping spree. Within a few years, it has become a China-wide shopping festival, gradually moving into being a truly global event. This year, it celebrates its 10th anniversary—with a record sales of $38.4bn.
It only took three years for Alibaba's 11/11 to overgrow U.S. Cyber Monday sales. In 2018, Alibaba's sales on Singles Day were two times higher than all the U.S. retailers sold online during Black Friday AND Cyber Monday combined. One can argue that Singles Day is a purely online event while Black Friday sales are primarily happening offline – with shopping crowds blasting high-street stores. However, in recent years, Singles Day has become such a massive phenomenon that shopping madness spills over to offline shops in China, who are trying to get their share of the pie. Alibaba also works hard to export Singles Day, shifting its focus towards selling to "European singles."
Moreover, large global brands such as H&M, Zara, Nike have started offering special deals on November 11—first in China, then expanding to Europe and the United States. Even large European retailers, such as Mediamarkt and Bol.com, have joined the Singles Day party in recent years.
Of course, it is easy to see that the gigantic size of Singles Day sales finds its cornerstone within the huge Chinese retail market. But another important factor is the effort and investment that Chinese retailers have put into promoting the November 11 festival through innovations in marketing, checkout, and payments. The peak online sales during Black Friday in Europe and the United States outperform an average day by 250-400 percent. At the same time, Alibaba's sales uplift on Singles Day reaches up to 1600 percent compared to an average day—five times the Black Friday increase in Europe.
This rise is a result of Chinese retailers becoming global front-runners in marketing, customer communication, checkout, and payment experience. Their European peers are clearly doing much less to serve their customers—and differences in shopping spree uplift rates give a clear illustration of this phenomenon. Overlooked customer experience flows, lengthy checkout processes, poor traffic management, cumbersome payments—all of these results in significant lost sales volumes for European retailers every year.
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Overlooked customer experience flows, lengthy checkout processes, poor traffic management, cumbersome payments—all of these results in significant lost sales volumes for European retailers every year.
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For many online retailers, there is significant room for improvement in terms of provided customer experience during the upcoming high shopping seasons and beyond. In this domain, Europeans can learn a lot from their Chinese counterparts.
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5 lessons on customer experience
Lesson 1: Fast and frictionless payment experiences increase conversion and repeated purchases
Sixty percent of the November 11 customers authenticated their payments with biometrics. Alipay and WeChat wallets dominate China payments landscape and allow 1-click biometrical-verified payments. Taking the friction out of the payment process increases conversion, improves customer experience, and repeat purchases. In Europe, mobile wallets like Apple Pay, Android Pay and card-on-file technologies provide a similar level of experience.
Lesson 2: Optimized mobile ordering and payments experiences drive the majority of sales
Mobile commerce raises every year, 80 percent of Singles Day sales take place through mobile. All of the major retailers focus their game on the mobile playfield, or mobile battlefield if you will. In Europe, mobile purchases account for 50-60 percent and are growing, therefore optimizing your ordering and payment systems for mobile becomes one of the critical success factors.
Lesson 3: Omnichannel experience with seamless integration of online and offline is the new normal
Chinese retailers are offering a mix of online and offline experience such as 'buy offline, pay online', 'try in-store, buy online', or 'buy online and pick up in-store'. No need to say that promotions and deals are replicated online and in physical stores. The goal: frictionless and integrated product discovery and purchase process, which allows not just 'to sell the product', but also to create more transparent, consistent, and centralized communication moments with customers. In the end, that helps to convert a one-time shopping spree purchase into the long-standing customer relationship.
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A frictionless and integrated product discovery and purchase process helps to convert a one-time shopping spree purchase into the long-standing customer relationship.
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Lesson 4: Online pre-sale orders notify customers about the sale in advance and heats up the interest
Alibaba opens pre-ordering of the promotional items as much as 20 days in advance before Singles Day. The upcoming promotional price is shown along with the regular price so that customers can add the products to their cart, wait until promotion kicks in, and checkout on the day. Effectively, pre-ordering separates the product discovery phase from checkout and payment—stimulating customer interest early and allowing more time for product discovery. No surprise that $1bn of sales happened within the first 85 seconds of the November 11 sales in 2018.
Lesson 5: Payment processing and traffic bandwidth should be able to stand the heat
This is rather a hygienic factor, although it can't be overlooked. Alibaba systems handled an average of 250,000 transactions per second on Singles Day 2018, with this year reaching double that number, without any recorded outages in the history of Singles Day. While in Europe and the US, even large retailers like Target, Macy's, and Lowe's used to suffer from transaction processing outages on Black Friday. Handling peak transaction volumes is a part of the game during shopping days—and requires extra preparation and testing.
Given the sheer size of the holiday shopping on the horizon—the end of November and December—now is the ideal timing for European retailers to rethink and redesign product discovery, checkout, and payment experiences for their customers. Through this article, we hope to raise awareness for leading retailers, so that you can make potential improvements and head towards greater success in the future. Especially if you are looking forward to offering your customer a seamless and enjoyable experience in the upcoming holiday season.
However insightful this article can be, each case is different. The scope of this article cannot fully demonstrate our expertise. Therefore, if you'd like to learn more about how you can elevate your customer's experience and satisfaction, we are here to help.