Making Sense of the Online Shopping Day Phenomenon
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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 Cyber Monday. 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 Black Friday 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 Christmas 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 US sales £968m are Prime members £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 2 | September 2016 September 2016 | 3 RetailWeek CONNECT WHITE PAPER In association with 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 Small Business Saturday 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.