RetailWeek Connect WHITE PAPER In association with Making sense of the online shopping day phenomenon What can UK retailers learn from the major discount days around the world? RetailWeek Connect WHITE PAPER In association with Consumers’ Tem quassitia verum tolerance for facepe dem bargain-hunting eseraestrum is limited to 60 quatem et re quiae seconds for each et etur rendeliquam 1% discount Xxxxxx xxxxxx Long waits – either in store or online – introduction are also a sure-fire way to fail. Consumers’ tolerance for bargain-hunting is limited to efore Amazon, July 12 was just 60 seconds for each 1% discount when July 12. Now it is Amazon Prime waiting for a store to open. That ‘patience BDay. A manufactured ‘holiday’ that PHENOmeNON ratio’ drops to 40 seconds at the checkout. proved to be the biggest day in the online Blue Yonder stats show customers will hold behemoth’s history. Impressive. Perhaps out for an average of 47.5 minutes to get online even more so when you consider the level on . of traffic during last year’s inaugural SHOWS NO SIGN Having enough capacity on the website to event made it the UK’s sixth-biggest online handle demand, manage the orders, manage shopping day, ahead of Valentine’s Day. the payment, having the ability to pick, pack Love it or hate it, there is little doubt OF ABATING and ship the orders and manage the returns this promotional extravaganza is a game- a few days later is indeed a huge challenge. changer. “From nowhere, Amazon changed “Peak demand will stretch any part of your the landscape,” notes Retail Week executive hy are these largely manufactured non-mobile views on and Cyber single day, and increasing efficiencies to cope eccomerce director at Dixons Carphone, system that is not in good shape,” explains editor George MacDonald. “And as Prime days proving so popular? The short Monday last year, notes Andrew Fowkes, who with the new demand patterns.” which recently took on Amazon with a 10- ChannelAdvisor EMEA vice-president Day and similar new arrivals such as Black Wanswer is ‘everyone likes a deal’. heads up SAS UK and Ireland’s retail centre of day super-sale event running across Amazon Mike Shapaker. Friday change the market, only a retail The longer one, according to John Beechen, excellence. “Retailers must consider the full Smoothing out the spikes Prime Day. Tom Obbard, managing director And here’s the rub, adds Matt Prebble, turkey would rely on to make head of managed services at Salmon, is: “It’s costs of this swing”, he adds, “given the larger Black Friday and Cyber Monday have already at Furniture Choice, agrees: “Running offers managing director at Accenture’s retail the tills ring.” a confluence of the fact that consumers now operational costs associated with shipping become a long weekend of bargains but it for the whole week is what we’ve found works practice: “It’s not cost effective to have this Discount days are now part and parcel of know the time period where items will be on and returns”. won’t be long before the event becomes Black best – maximising sales and ensuring the level of capacity for the whole year and the retail calendar. Black Friday and Cyber sale; are choosing to wait for those days before Scenes of people fighting in the electrical Friday Week. Beechen at Salmon predicts offer mix is right to drive footfall but not yet if the website crashes this is hugely Monday are the biggest on these shores. purchase; and the maturity of ecommerce as a departments in 2014 put many off the high this year’s big deals could hit £5bn in sales impact margin.” embarrassing.” Since their inception in 2010 their popularity shopping platform.” street hunt. “Consumers used the online over five days (November 24–28) as retailers Smoothing out the spikes can also help Terry Hunter, UK managing director at has snowballed and last year sales for the In the UK, discount days have become channel to secure bargains rather than braving “cotton on” to finding ways to manage the reduce returns – one in three online shoppers ecommerce provider Astound Commerce, says two days combined reached about £2bn. synonymous with online. While in-store the crowds and queues in stores,” explains discount and high volumes of traffic in a returned what they bought on Black Friday what’s become more and more apparent in Again, impressive. But that figure is a spend dropped from £1.14bn to £1.13bn Jason Shorrock, vice-president for retail more organised manner. 2015, according to LCP Consulting – and recent years is that “consumers hold a grudge”. drop in the ocean compared with Singles’ during Black Friday 2015, online sales jumped strategy EMEA at JDA. “Retailers took steps to The feeling is that flash sales can leave the number of customers disappointed “The challenge now is managing consumer Day in China and El Buen Fin in Mexico. from £800m to £1.1bn. Mobile is a driving smooth the peaks, by extending promotions customers disappointed. “Fixed periods offer when their products are out of stock or expectations,” agrees Pragma managing The latter racked up sales of £7.9bn in 2014. force behind this – mobile views exceeded over the course of a week rather than as a more sustained value,” says Stuart Rammage, don’t arrive on time. director Ralph Fernando. The former – held on November 11 annually – was hijacked by Alibaba in 2009. It’s been worth it: last year the etailer sold goods worth £9.9bn in the first 90 minutes. At a glance Big weekender 2015 Amazon Prime Day Singles’ Day (China) Given the staggering figures resulting from these online shopping days, this The online shopping day phenomenon white paper, produced by Retail Week in association with ChannelAdvisor, Black Friday zeroes in on just what makes such events Cyber Monday £1.1bn £561m 10.5m Sales in successful and what lessons UK retailers UK online sales UK sales Site visits in 2015: can learn from them. We reveal all the vital £720m need-to-know information about the major spent on spent on 2015 £1.1bn 2014 Black Friday the Saturday online shopping days around the world £810m 2015 £9.9bn and provide answers on what UK retailers 2014 should be doing now to prepare to get in on the action. Growth: 2009 to 2013, £676m Proportion of UK sales increased 5,740% £968m Amazon shoppers that Discount days £968m are Prime members US sales £8bn 2015 spent on on Cyber 1/3 are now part and Average basket 2015: of 2015 2015 the Sunday Monday transactions parcel of the £93 (up £7.50) items ordered per 72% 2016 prediction of £5bn 398 second in 2015 via mobile retail calendar 1 in 3 customers returned goods in five days

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THE MAJOR DISCOUNT DAYS NEW CONTENDERS green monday

AMAZON PRIME DAY BLACK FRIDAY CYBER MONDAY SINGLES’ DAY SMALL BUSINESS GREEN MONDAY FREE SHIPPING DAY EL BUEN FIN SATURDAY Date July 12 (2016) Date November 25 (2016) Date November 28 (2016) Date November 11 Date December 3 (2016) Date December 12 (2016) Date December 18 (2016) Date November 18–21 (2016) Sales $525m estimated (£404m) Sales £1.1bn (2015, online) Sales £968m (2015, online) Sales £9.9bn (Alibaba, 2015) Sales £623m Consider The better fulfilment Consider As retailers improve their Sales £7.9bn (up 13.7% year on year) Consider The 2016 event may have Consider £495m of the £1.1bn Consider Brits are willing to wait Consider Haitao shopping (buying Consider 94% of SMEs have never services become the bigger Green multichannel fulfilment systems a Consider Black Friday is no longer just added between $500m (£385m) and was through mobile devices 49 minutes 55 seconds for a website overseas) is the fastest-growing provided any kind of promotion or Monday will be December 18 guarantee is losing a gringo thing $600m (£462m) in incremental sales if it crashes on Cyber Monday segment of ecommerce in China discount on Black Friday its gloss to the retailer’s top line (CAGR 63.3%)

Making hay while the sun If 2014 was the year Black One in five Brits has never Ecommerce sales in China Green Monday has nothing to Fulfilment in and around Conceived in 2011, ‘The Good n shines in July isn’t how n Friday came to prominence n heard of Cyber Monday, says n are expected to pass $1trn n is no Black Friday, nor is it n do with climate change and n Christmas has improved n Weekend’ is a government and retailers traditionally work. But in the UK, 2015 was the year it took Dunja Riehemann, marketing (£0.77trn) in the next 12 months meant to be. The former encourages everything to do with Christmas. dramatically in the past few years. industry partnership to stimulate Amazon is no ordinary retailer. residence. Comscore reported a director at Blue Yonder. It has and Singles’ Day is the cherry on consumers to swap their shop from The term was first coined by eBay So much so that retailers have the economy post recession. It is Not content with having brought 259% increase in total consumer traditionally been an afterthought, the cake. “Singles’ Day is the biggest a large firm to a small, independent in 2009 to describe its best sales day come up with another holiday to timed to take advantage of Mexico’s Black Friday across the pond the spend on November 27, 2015 living in the shadow of its bigger online shopping day nobody’s one, while the latter tends to be in December. More specifically it’s promote their services. Revolution Day weekend. etailer decided to celebrate its 20th compared with November 28, 2014. brother Black Friday. It certainly ever heard of,” says Jon Kershaw, dominated by retail behemoths been defined as the Monday that Free shipping day, held annually, A survey by Deloitte in 2014 birthday on July 15 last year with Online sales surpassed £1.1bn, held its own last year, though: managing partner at Havas Media. pushing breakthrough prices on falls with at least 10 days to go until is when shoppers can use firms showed that 74% of Mexicans Amazon Prime Day. according to Experian-IMRG. online sales on the day were November 11 started as an everything from tablets to washing Christmas. that guarantee delivery by made purchases over the mid- Cynics, including Walmart.com Black Friday is growing strongly up 31% to £968m as shoppers occasion for single people to spend machines. There are, however, In the US it’s now become Christmas Eve. November weekend. What’s president and chief executive in the UK, as it is in the US, but here embraced ecommerce. time with single friends, but in similarities between the two. Both the third biggest day for online It hasn’t yet attracted the hype more, the event didn’t appear to Fernando Madeira, say this was the trend is towards online rather Digital analytics company 2009 the etailer Alibaba spotted are US imports, for example. Small spend. Why? Because shoppers of its bigger discount day brothers cannibalise Christmas sales – merely a ploy to hook customers than offline. Black Friday footfall SimilarWeb said web retail traffic an opportunity to woo shoppers. Business Saturday was launched have become more confident that – not least because retailers 80% planned to buy more goods into its £79-a-year subscription fell 4.5% last year, for example. was down 6% compared with the On Singles’ Day 2015, Alibaba sold by American Express, and both retailers will be able to get their continually outdo one another to in December. service. A lot of consumers didn’t OC&C says the weather had a part same day last year, but mobile £9.9bn worth of goods and has now events are proving popular among online purchases to them in time go as close to the wire on festive Campaigners point to the appear to care: 398 items were to play, but the chaos in 2014 meant growth helped make up some trademarked ‘11.11’. consumers. for the big day. fulfilment as they can. increasing numbers of shoppers ordered per second. many consumers stayed on their ground. SimilarWeb singled out In the UK Mountain Warehouse Shoppers spent £504m at Some retailers have started buying on credit. There are also This year Amazon said things sofa to shop. A fifth (19.3%) of Brits Etsy.com, which had the largest jumped into bed with Alibaba on the December 6, 2014 event, up labelling it Cyber Monday 2 but, those that say the discounts aren’t went even better: 60% more said in a Blue Yonder survey they growth of 42% in mobile web traffic Singles’ Day last year and sales were 8% on the first event in 2013. in terms of sales volumes, Cyber good enough. products shipped worldwide than wouldn’t be participating in Black in 2015 compared with 2014; “double the forecasts”, according to In 2015 it was £623m and Monday had better watch out, To this, the national retailers’ 2015 making it the “biggest day in Friday 2015 because they saw the Boots.com (up 32%) and chief executive Mark Neale. #SmallBusinessSaturday trended because Green Monday could association (Antad) has a the history of Amazon”. footage of fighting from 2014. Sainsburys.co.uk (up 25%) also Like any discount day, there are on Twitter, according to American soon be number one. strightforward rebuttal: “If I want to “There’s clearly large consumer Retailers can take advantage fared well. risks, notably high returns (30% Express. Total reach topped 25 buy a flat-screen TV and don’t care support for a summer sales event,” of the swing towards consumers “Cyber Monday is becoming reportedly) and the proliferation million people. The figures indicate about having the very latest fashion, says David Jinks, head of consumer buying online if they know how, a key date here as retailers of sham goods. But there are growing interest in supporting I can get one that’s a step behind at a research at Fastlane International. according to Martin Corcoran, lengthen the holiday time-frame opportunities. China is home local businesses. It also gives small very low price.” The success even created some head of insight consulting at online for discounts in order to drive to 1.38 billion people and an operators a chance given that many #SmallBusinessSaturday aches and groans within Amazon’s retailing specialist Summit. “On volumes,” says David Saez, chief emerging middle class about the struggle with big discount days. trended on Twitter IT system. When shoppers Black Friday, device usage changes executive of on-demand delivery size of the US population – and couldn’t complete transactions from mobile in the morning, app Stuart. Indeed, Black Friday is they are hungry for foreign brands. #PrimeDayFail began to trend on desktop during the working day now bleeding all the way across the Paypal and Ipsos found that Twitter. and tablet in the evening. Use these weekend, finishing with an e-flurry nearly half of Chinese online DISCOUNT DAYS DIVIDE OPINION UK consumers Top tip: Standing out from the on-site analytics to predict how on the Monday. shoppers are more likely to shop on on discount events crowd on Prime Day can feel customers will behave,” he advises. Top tip: Shoppers are increasingly foreign sites during retail holidays Retailers and consumers have a love-hate relationship Clothing retailer REI decided to close its US stores on such as Black Friday difficult. Use Amazon Sponsored Retailers who offer Black Friday using mobile for Cyber Monday and promotional periods. The UK with major discount days. An LCP study in December Black Friday, ostensibly to give its employees a break Products to improve your visibility deals online must make sure sales. Make sure your site is is the second most popular online 2015 found that a third of UK retailers found Black and encourage people to get outside on the holiday. 31% ‘like’ or ‘love’ them with deal hunters. Bid up on your they can fulfil every single order responsive to these consumers, overseas destination for Chinese Friday “unprofitable and unsustainable”. Findings like Sales would have dipped in those 24 hours but the 30% ‘don’t like’ or keywords and create special efficiently. At least 15 retail websites regardless of their device. shoppers, so it’s vital retailers offer this one from Worldpay don’t allay fears – one in five move will cement positive brand values among ‘hate’ them campaigns just for Prime Day to suffered some form of loss of service preferred payment methods, such shoppers think less of brands who take part in Black shoppers and staff, says Alasdair Lennox, executive attract customers. during the 2015 event, according to as Alipay, Tenpay and Union Pay. Friday and 70% returned what they’d bought. creative director at brand consultancy Fitch. 39% are unsure web monitor Traffic Defender. Top tip: If you sell to China, this Backing away from a promotion that the majority Jigsaw ignored Black Friday completely in 2015, 30% of online shoppers Top tip: Prepare well in advance day isn’t to be missed. Incorporate are embracing isn’t easy, but some brands are proving pushing a “reduced by nothing, standing for something” and consider spreading deals over promotions into your campaigns to are ‘likely’ or ‘very there can be “marketing profit” in doing so, says message instead. The fashion retailer posted a 12% a longer period. capture Chinese consumers on the likely’ to shop ChannelAdvisor EMEA vice-president Mike Shapaker. jump in sales in the five weeks to January 2, 2016. prowl for a Singles’ Day deal. Source: eDigitalResearch and IMRG

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t’s remarkable that some of the biggest shopping days in the UK were RetailWeek Irelatively unknown five years ago. Where the weeks in early December leading up to Christmas were traditionally Connect the peak days on which retailers focused in the past, the calendar is now awash Commercial Editor with dates for retailers to embrace. From Laura Heywood 020 3033 4289 conclusion Black Friday to Singles’ Day, retailers can [email protected] take advantage of additional major spending sprees throughout the year. Head of Content Management PREPARING Many of us thought nothing of it when Tracey Gardner 020 3033 2769 Amazon brought Black Friday to our shores in 2010, but today it has become a [email protected] FOR PEAK household event in the UK and has shifted the way retailers prepare for the festive Art Director Amazon also shook up the ecommerce frenzy. Black Friday has pulled forward Paul Aarons 020 3033 2606 the beginning of the peak season, meaning landscape with the introduction of Prime [email protected] or retailers to get it right, it’s vital retailers are beginning their festive Day as a 20th birthday celebration in 2015. preparations start a year in advance, planning far earlier than ever before. It was uncertain if this would be a one-off Flearning the lessons from the peak KEY TAKEWAYS FOR RETAILERS shopping date or another firm fixture in Production Manager just passed, negotiating the deals with the retailers’ calendars. After the roaring Jo Lambert 020 3033 2677 suppliers and preparing the infrastructure to success of Prime Day in 2016, it’s clear that n Switch online More shoppers will stay on the sofa rather than [email protected] handle the next peak. Prime Day is here to stay and Amazon has risk scrums in stores transformed the UK landscape with two Here are the five biggest considerations channeladvisor’s Senior Account Manager n Be prepared The traffic generated will stretch systems to new major shopping events. for retailers: Dan Capel 020 3033 2914 their limit key points When planning your promotions calendar, make sure you prioritise peak [email protected] Well-primed Brits love a bargain so n Smooth savings Promotional periods are likely to be l Optimise for mobile: In Q4 2015 mobile selling days. Get prepared early and everything from the IT to the logistics 1 stretched over longer periods searches eclipsed desktop searches for the identify new ways you can capture COVER IMAGES: ALAMY network needs to be primed and ready when first time. Incorporate Apple Pay, PayPal or the doors open. consumers browsing for a deal. This n Personal touch New days will appear but expect more other “frictionless” payment methods to could be through delivery deals, bundling make shopping on mobile seamless. Well-timed Despite the spike in activity, retailers to bring their own twist to established days items together, or rewarding loyal 2discount days rarely last just 24 hours. n And finally Love or loathe them, discount days are here to stay l Deliver on your promise: Don’t underesti- shoppers with even more discounts. Black Friday and Cyber Monday, for example, mate the value consumers place on delivery. Put an emphasis on delivery – consum- bleed into the festive period. This needs to be If you guarantee delivery dates or final cut-off ers are very impatient when they have to factored in. shopping days, be sure to live up to them. wait for their purchases. Make sure your l Single out China: If you sell internationally delivery process is streamlined and your Well-studied Data can offer insight into year (14% versus 36%). One in four (25%) offering a more playful and personalised view to China, be sure to work Singles’ Day pro- carriers can cope with the increased 3customer behaviour, so you know how consumers said their experience was better to promotional offers while still maintaining motions into your plans. pressure during peak days. many will be banging at the website door well than last year, while just one in 20 (5%) the excitement and emotional aspects of Fulfilment by Amazon (FBA) can be a l Consider Google Prod- before dawn and how many will be making a said it was worse. The day was “almost an discount days. Product adverting: great way of easing the complexity of uct Listing Ads (PLAs), Facebook Dynamic last-minute dash before midnight. unqualified success”, says Richard Moller, Dixons Carphone has its ‘Black Tag’ event delivery, especially during peak season. Ads and Instagram Dynamic Ads as part of YouGov’s director of consumer research. during Black Friday at PC World, for example. With Fulfilment by Amazon (FBA), you your peak season digital marketing strategy. Well-stocked The merchandising mix Almost. The online crush still meant more “I think we’ll see more personalised and store your products in Amazon’s fulfil- 4also has to be right. Pragma surveyed items tended to be out of stock (21% versus contextualised events,” Rammage says, noting l Broaden your marketplaces horizons: ment centres, who then pick, pack, ship 2,000 shoppers in May 2016 and found that 17% in 2014) and delivery times were longer the recent hype around Pokemon Go for Most retailers have Amazon and eBay on and provide customer service for these than stated (15% versus 10% last year). Data discounts prompt purchases more in toiletries example. There could be other opportunities their map, but there are many other mar- products. The added bonus – FBA also (20%) and fashion (19%) than furniture, can help retailers meet and manage their in everything from popular TV series The ketplaces from Tesco to Zalando, that gives you access to Prime consumers, sports equipment and children’s clothing customers’ expectations, boosting sales and Great British Bake Off to sports events and could complement your retail strategy. which can be crucial on days like Prime (all about 7%). generating loyalty. perhaps even Brexit. “Things will happen more naturally,” he adds. Day or Black Friday. Well-budgeted It’s far better to invest The future This may only be the start, and given that Contact details The ecommerce calendar has added 5resources into getting it right beforehand, The online shopping day phenomenon shows almost every public occasion or event can be some firm new shopping events over the than it is to throw more time and money at no signs of abating. John Lewis managing turned into an opportunity for a sale, it’s clear ChannelAdvisor, 33 Kingsway, London past few years, and there’s no doubt it trying to appease angry customers when director Andy Street suggests it’s impossible to the online shopping day phenomenon is here WC2B 6UF | channeladvisor.co.uk | there’ll be more to follow. Keep looking everything goes wrong. put the genie back in the bottle. to stay. As we look to 2017, experts predict the [email protected] | out for the next new shopping event and Lessons are certainly being learnt. YouGov However, experts predict there will be more arrival of even more peak sales days, making 020 3014 2700 keep planning early for peak days. research showed the percentage of shoppers it vital retailers embrace the popularity of innovation. The trend towards a personalised • Mike Shapaker, managing director, encountering technical issues on Black Friday discount days and create a buzz around the brand and retail experience also applies to ChannelAdvisor 2015 was less than half that of the previous discount days. Some retailers are already many lucrative opportunities to come.

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