It’s that time of year again: we’re starting to see holiday decorations line the store shelves and hear the familiar holiday tunes playing while we shop. But that is not what inspired me to bring up the topic of holiday online shopping. In fact, while the shopping binge is often only associated with the Christmas or New Year holiday season, three more recent online shopping festivals have now added to the year-end frenzy.
By Charles Brewer, CEO DHL eCommerce.
November and December are still when many shoppers find the best online bargains. The high concentration in this period can be broken down into three big events that drive billions of dollars in e-tail sales every year: Diwali, Singles Day, and of course, Black Friday.
Consumers tend to either choose promotions and major sales events, or wait till the last minute for their holiday shopping. A recent survey found that holiday spending will increase $15.6 billion year-on-year during the last two months of 2016, with consumers expected to spend 10% more this holiday season¹.
So let’s take a closer look at the ‘Big Three’:
October 30 marks the culmination of a month of festivities surrounding the Hindu festival of lights known as Diwali. It is celebrated in many Asian countries, and is also the main shopping festival in India.
The start of the Diwali season in early October saw a showdown between India’s two largest e-tailers, Flipkart and Amazon. Flipkart’s “Big Billion Days” won the sales war, but not by much: its 15.5 million units sold was only slightly ahead of Amazon’s 15 million. The country’s third-largest e-tailer, Snapdeal, recorded a solid 11 million units sold as well.
It’s interesting to note that a third of Amazon’s unit sales were in fashion. For Diwali, Amazon brought several stand-alone e-commerce players in the Indian fashion industry under one roof, called Amazon Fashion. That’s even more impressive when you consider the logistics that need to be in place to accommodate ‘open box’ deliveries, clothing returns and exchanges in a manner that provides the customer with a positive buying experience.
When sales from Flipkart, Amazon, and Snapdeal are combined, recorded sales were around $1.8 billion over a six-day period. That’s a major increase against last year’s mark of just under $1.1 billion for India’s big three.
Fueling the upward rise of e-commerce in India are the proliferation of internet enabled devices, 3G/4G penetration, cash-on-delivery (COD) and other payment options that act as major enablers for the e-tailing industry in spreading out of the cities and into India’s more rural regions. I see no reason for this trend to slow down – in fact, there is plenty of evidence that secondary and tertiary cities will represent the big opportunity in 2017.
I read an article recently that said Alibaba, China’s largest online retailer, was turning the country’s biggest online shopping day into an event on par with the Super Bowl. I thought that was a bit of an exaggeration, until I read the next line: Katy Perry – a former Super Bowl halftime performer – will serve as Alibaba’s “global ambassador” for Singles Day.
Lesson learned – never underestimate Singles Day! The ‘holiday’ started out as a tongue-in-cheek version of Valentine’s Day in China, but has since exploded – largely thanks to efforts made by Alibaba – into the biggest single online shopping day in the world.
All signs indicate Alibaba will easily top its $14.3 billion in sales from last year’s November 11 event. The way they’re doing it represents, to me, some of the most cutting-edge developments in e-commerce.
Setting Katy Perry’s star power aside for a moment, Alibaba is featuring product livestreams from 600 brands leading up to November 11 to educate consumers on their products. That includes a recent eight-hour fashion show in Shanghai with sneak previews of products from over 50 brands – with pre-order options, of Course.
Some shopping experiences will take place end-to-end in virtual reality environments, with Alibaba practically giving away cheap, but functional cardboard VR headsets so consumers can take part.
Keep your eyes open for the “Tmall Cat” game in the run-up to Singles Day as well – an augmented reality game in the same vein as Pokémon Go that will lead players to online shopping deals and bargains in real life stores.
As Alibaba’s example shows, the act of shopping has become just as important as the actual purchase for consumers. To deliver on both, e-commerce frameworks need to be tuned perfectly.
Or course, no discussion of holiday shopping trends would be complete without mentioning Black Friday. As many people know, Black Friday falls the day after the American holiday of Thanksgiving – November 25 in 2016. While Thanksgiving itself is traditionally spent with family eating a turkey dinner, the day after Thanksgiving has turned into a day set aside for shopping.
What was once an event marked by lines around the block forming in the wee hours of the morning in front of ‘brick and mortar’ stores has transformed into an intriguing mix of traditional shoppers and, of course, accelerated engagement of online shoppers.
A recent study from PwC gave some examples: leisurely hipsters with disposable income for online niche gifts for themselves and others, the under-20 members of Generation Z who like buying real items in real stores, or millennial parents who split the difference. What does this mean for e-tailers? Flexibility is the key!
These diverse shoppers want varying degrees of a seamless, immersive shopping experience that they control: the omni-channel shopping experience that blends in-store, online, and mobile to craft a purchasing decision.
The desire for control and flexibility extends to last-mile delivery options as well. Although curbside delivery or delivery to a predesignated location is not widespread in the US, it does exist, and around 30 percent of shoppers would be willing to try one or the other. Free shipping is no longer seen as a perk, but standard, with 60% of retailers offering free shipping and returns.
This has led to retailers experimenting with various combinations of supply-chain and distribution approaches, particularly important for SMEs.
It may only be the start of November, but for e-commerce – “it’s the most wonderful time of the year” (I’m sorry, I couldn’t resist!).
¹ Adobe Digital Insights: 2016 Holiday Shopping Predictions: Europe And Asia-Pacific
This blog post originally appeared on the Delivering Tomorrow website.
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