Oct 30, 2020
Due to COVID-19, the retail industry has been forced to find ways to reach out to their consumers for the holiday season through various digital platforms.
To prevent people from gathering into large crowds, retail companies are spreading those deals out throughout the entire shopping season so that consumers don't have to wait until Black Friday or the 11.11 Singles’ Day to get the best deals.
NEW SHOPPING BEHAVIOURS
The pandemic affected the retail industry immediately, with a recent survey revealing that 73% of consumers have noticed that their shopping behavior has changed since the outbreak with an increased likelihood to purchase more online.
In addition to the online shift in behavior, shoppers are more price-conscious and discount oriented. Since the lockdown, there has been a 35% year-on-year growth in search queries for coupons and rebates, including discounts.
In the U.S, its citizens generally tend to shop about equally online and in-store, but this shifts in favor of online shopping around the holiday season. Specifically, 47% of American adults plan to shop online only, while 31% plan to split their holiday shopping between online and in store.
Those planning to shop mostly online reason out their value for health and safety, although convenience is the primary reason, and preference for online shopping has drastically increased.
While in Asia., the annual 11.11 Singles’ Day has become an event for both shoppers and e-commerce merchants. In China, where Single’s Day originated, it has recorded an online sales of 410 billion yuan (US$61 billion) in just 24 hours last year, double what Amazon generates in an entire month.
Data also reveals that there was an increase in consumer spending by an average of 56% on big online sales events compared to an ordinary day in 2019. South East Asian consumers are definitely more likely to spend during big sales periods.
HOLIDAY SALES PREPARATIONS
Across Southeast Asia, e-commerce platforms are allocating bigger budgets for their marketing strategies to drive traffic to their websites.
Some of China’s big online brands, for example, have started their online Singles Day sales early, allowing customers to place advance orders in a month-long shopping marathon festival. Not only does this allow customers to save in advance, but it also enables the retailer to achieve much more accurate forecasts on product demand and logistics requirements.
For Single’s Day, Alibaba is boasting the participation of 250,000 brands and 800 million consumers, in which 200 million are Generation Z.
While in the U.S, more companies are promising an all-new Black Friday experience and say it will spread traditional Black Friday savings throughout the season with more deals available online.
In the case of Walmart, the retailer is even preparing for the large influx of orders by hiring 20,000 seasonal workers for its E-commerce fulfillment centers.
EXPECTED GROWTH RATE
China dominates shopping activity on Singles’ Day. But the success of this shopping day is spreading to its neighboring countries: Hong Kong, India, Indonesia, Thailand and the Philippines are turning out in force, too.
According to the research firm Fung Global Retail and Technology, Alibaba is expected to generate $20 billion in sales on Singles’ Day this year.
While in the U.S, it is expected that the Black Friday sales trend will grow to 61%. Projecting this growth rate into 2020 would see online sales is equivalent to $691.4 billion dollars by the end of the year — but that’s not including the massive effect of the coronavirus on global commerce.
To conclude, the pandemic has fundamentally changed consumer shopping preferences and accelerated digital transformation of many businesses. Through the digital platforms, expansion from companies should offer more opportunities to engage with consumers as well as provide a better consumer experience overall.
Companies who want to successfully increase their sales need to be digital and mobile led in their strategies. The trends and habits should be understood as they will provide the inspiration for other markets where online spending is also growing.