Black Friday is now a big retail event in the UK and places including Canada and parts of Latin America. But you’d be wrong in thinking this is the world’s only mega retail day. While the Black Friday phenomenon doesn’t occur in all parts of the globe, many markets have their own retail bonanzas that positively dwarf it.
The US Black Friday bonanza
America’s ‘Black Friday’ retail event is now several decades old. Once US consumers finish celebrating Thanksgiving on the fourth Thursday in November, their minds turn to Christmas. A pattern emerges of browsing behavior over the ensuing weekend, which culminates in a bonanza of online spending on ‘Cybermonday’, the first Monday following the Thanksgiving holidays. This is the day when the highest rates of activity are seen in US ecommerce. It’s now a huge retail event that stretches to other markets including Singapore and Brazil. Some of this may be down to activity by American expats; some may just be shoppers of other nationalities hopping on the bandwagon and taking advantage of deals aimed at US consumers.
Canada celebrates its own Thanksgiving day in early October, when consumers aren’t yet thinking about Christmas quite so much. But Canadian retailers seem to have adopted the late November US Black Friday anyway, partly to compete with neighbouring retailers in the US and avoid losing sales to cross-border shoppers taking advantage of deals from US vendors. This phenomenon really got going when the Canadian dollar was at an equivalent exchange rate to the US dollar, but it seems to have continued even though the Canadian currency is worth less than the US one.
China’s mega retail event: Singles’ Day
But these brief retail bonanzas aren’t limited to the Americas and nations that celebrate Thanksgiving and Christmas holidays. China’s Singles’ Day event is a major global major shopping day – and like Black Friday it’s a very modern concept. Celebrated on 11 November, ‘Singles’ Day’ was invented in the nineties by Alibaba: China’s mega e-ecommerce player. The date of this event, November 11 (11/11), is chosen for the number of 1’s it contains.
It may be a new celebration but it’s one that Chinese consumers have really embraced. This ‘anti-Valentine’s’ day was heavily marketed by the retail giant, and in 2014 it surpassed America’s Black Friday event as the globe’s highest-spending shopping bonanza. Singles’ Day (光棍节) translates rather bleakly as “bare sticks holiday” and is intended as a day when people who are single indulge themselves with a shopping spree. They do so with gusto: in 2014 over £6bn was spent online in a single day; more than four times greater than US Cybermonday. But there are some good deals available. To participate, merchants have to offer at least a 50% discount on Alibaba-owned shopping portals such as TMall. Like Black Friday the event stretches beyond the immediate borders as Alibaba offers cross border sales via marketplaces such as Tmall Global and AliExpress.
Other major retail events
With consumers in major emerging markets finding themselves flush with disposable income for the first time, other holidays of long standing are also evolving into big spending sprees. Countries that celebrate the lunar New Year tend to mark it with a long holiday between the end of January and February, so retail tends to go quiet in places such as Korea, Vietnam and China. This means any retail activity associated with the holiday starts early and shopping patterns really change for an extended period of time.
In India, the Diwali festival tends to see a rise in online spending and the new Indian middle class consumer is embracing holiday ecommerce. Japan tends to see a rise in online shopping activity during the summer, as this is bonus season for salaried workers. Spending patterns shift as people indulge themselves with luxury buys and entertainment or travel purchases. Later in the year, Russian consumers tend to spend more as summer ends. Here the return to school is marked as a big event and household spending rises as children are kitted out for school.
Following Alibaba’s example, the Middle Eastern shopping portal Souq.com attempted to generate its own shopping festival known as White Friday. This is in the calendar at the same time as the US Black Friday event, so it’s also an attempt to prevent the US retailers stealing all the region’s online sales for that period with their discounts and special offers.
The future of flash sales
It’s hard to say whether this phenomenon of online shopping festivals is likely to continue at the same pace. Consumers have really embraced events such as Singles’ Day, suggesting people allow themselves to get caught up in the frenzy. But retailers may not be as enthusiastic. If consumers anticipate items being on offer, they often hold off making purchases in expectation of getting a better deal. It’s difficult for retailers to cope with the magnitude of these massive sales events and still meet customer expectations. Many online retailers have had to use a queuing system to meet customer demand, struggled with their bandwidth as record visitor numbers hit their sites, or have been unable to meet expectations for delivery time following huge sales events.
In emerging markets such as India, where consumers are still getting to grips with online shopping in general, marketing these flash sales has been a good way of changing behaviours. Souq.com approached White Friday in partnership with Mastercard with the intention of encouraging shoppers who hadn’t yet made an ecommerce purchase using online payment to do so for the first time by offering irresistible deals. This kind of approach can work in some markets, but in mature ones such as the US it’s unclear whether these events ultimately benefit retailers. There’s a view that brief online shopping spree events such as these are likely to gradually decline in magnitude as consumers become more accustomed to online shopping and consumerism in general, particularly in ecommerce markets that are currently immature.
How should online retailers outside the country respond?
If you’re an online retailer with significant cross-border sales, it’s wise to keep abreast of major shopping festivals in your target markets. You need to try to predict how your consumers may behave – as well as what their expectations are. It’s also worth being aware of significant dates by which your customers expect their items to arrive – don’t offer Christmas sales to overseas markets if you can’t deliver by the 24 December. It’s worth advertising when the final purchase day is to guarantee delivery by the holidays.
Email is understood to be the best way to drive sales for Black Friday shoppers. If you’re planning a campaign to an American audience, start thinking about it early. Remember; consumer behaviour changes during these shopping festivals so don’t expect that your usual marketing approach will have the same effect. Your consumers will be open to offers, including from your competitors in their home market, so consider carefully how you can compete.