November 14, 2017
November 13, 2017
Posted November 3, 2017
For those who aren’t familiar, Singles Day, which takes place annually on November 11, began in China as a day to celebrate being single. However, thanks to some clever marketing and a focus on the customer experience, 11-11 has exploded into a global phenomenon.
eCommerce company, Alibaba, saw an opportunity to turn this small celebration into a full-blown sales bonanza – and succeeded beyond probably its wildest expectations.
Singles Day 2016 saw a record $17.8 billion in online sales. Alibaba alone sold $12 billion in merchandise during its first 12 hours. That’s more than every other retailer on the planet will sell from Black Friday through Cyber Monday — combined. And, more than $1 billion in sales were recorded on that day in just the first five minutes.
These ridiculous sales numbers don’t just happen by accident. And, they don’t happen because Alibaba and other online retailers have corned the market on product offerings.
The real key to the explosive growth and popularity of Singles Day is the focus on the customer and their shopping experience.
As Deborah Weinswig of Fung Global Retail and Technology stated: “In the West the shopping experience is a chore; in China it is a sport.”
Alibaba recognized that those participating in Singles Day are mostly of a younger generation that has grown up around and is very comfortable with technology. And it created shopping experiences that appeal to this generation of digital customers.
As part of its strategy, Alibaba merged gamification with online shopping, leveraging its media and entertainment assets to drive increased online consumption. Also, in 2016, Alibaba offered a virtual reality (VR) shopping experience, enabling global retailers (even those without a physical presence in China) to offer an engaging, virtual in-store experience to consumers in China.
Digital businesses can take some cues from Alibaba. No, not every company can offer VR shopping, but what they can offer is a smooth, frictionless experience – allowing digital customers to transact quickly and efficiently. Forcing users through protracted sign-up and login processes is an invitation for them to take their business elsewhere.
Alibaba also recognized that there are more than 800 million citizens in China with smartphones, with more than 400 million of them being active shoppers on Tmall, the main Alibaba platform. Alibaba and other retailers took advantage of this opportunity – seeing 82 percent of sales in 2016 emanating from mobile devices.
Transacting on mobile devices comes with its own distinct set of issues. Device can unknowingly contain malware or another type of threat that can cause havoc on a business. And, businesses often have difficulty recognizing a legitimate user with a new unknown device. These issues lead to additional authentication steps or rejecting the user all together – not the ideal customer experience.
Of course, Alibaba and other retailers in China aren’t the only ones benefiting from this shopping frenzy, as 27 percent of purchases in 2016 were from international brands or merchants
Several U.S.-based companies — including Walmart, Macy’s, Gap, Target, and Costco — participate in Singles Day, targeting shoppers on Alibaba’s shopping websites Tmall and Taobao. In fact, Costco was the top TMall Global seller on Singles’ Day in 2015, selling about $3.14 million worth of products in a single hour.
However, many digital businesses still don’t accept cross-border transactions due to the associated risk of fraud. Those that don’t are missing out on a huge growth opportunity and alienating potential customers.
Be it Singles Day, or Cyber Monday, or any number of other “special” shopping days, it’s pretty clear that growth opportunities will continue to present themselves to eCommerce companies.
To capitalize on these opportunities, businesses would be wise to follow the example of Alibaba and focus on offering an exceptional customer experience.
However, the retooling necessary for the continuous innovation of the shopping experience is difficult for businesses that are mired in antiquated authentication and can’t answer the most basic question – do I trust that the person on the other end of the transaction is really who they claim to be?
With the power of digital identity, eCommerce companies can still safely and confidently participate in these sell-a-thons and take their brand to the next level by offering innovative new services and features, and expanding their reach into new markets.
That’s profitable growth without compromise.