TECHNOLOGY

Alibaba’s Singles Day shatters records

BY Deena M. Amato-McCoy

Not only did Alibaba Group’s Singles Day smash its own record, its volume exceeded the combined U.S. sales of Black Friday and Cyber Monday.

The 24-hour shopping extravaganza, held on Nov. 11, brought in $25.3 billion in sales (or gross merchandise value) to Alibaba’s platforms, up 39% compared to 2016. Sales settled through Alibaba’s Alipay accounted for 90% of total GMV. A total of 1.48 billion transactions were processed by Alipay in the entire 24 hours.

More than 140,000 Chinese brands and 60,000 international brands participated in this year’s Singles Day event, a move that encouraged 225 countries and regions to complete transactions throughout the day. The top countries selling to China included Japan, United States, Australia, Germany, South Korea.

Overall, 167 merchants each generated more than $15.1 million in sales. Meanwhile, 17 merchants surpassed $75.4 million in sales, and six merchants surpassed $150.9 million in sales.

Alipay processed 1.48 billion total payment transactions, up 41% from 2016. The network processed 256,000 transactions per second at peak. Meanwhile, Alibaba Cloud processed 325,000 orders per second at peak, and Cainiao Network processed 812 million total delivery orders.

The first delivery arrived 12 minutes and 18 seconds after midnight, according to Alibaba.

To boost excitement — further blend the online and offline experiences — Alibaba created “smart stores” that featured virtual browsing, shopping tours, virtual fitting rooms, payments and deliveries. Specifically, the Chinese online giant turned 100,000 physical shops around China into “smart stores.” Goods perused by people at the stores, but then bought and paid for on Alibaba’s platforms, were added towards the sales total, according to CNBC.

“More than $25 billion of GMV in one day is not just a sales figure,” said Daniel Zhang, CEO of Alibaba Group. “It represents the aspiration for quality consumption of the Chinese consumer, and it reflects how merchants and consumers alike have now fully embraced the integration of online and offline retail.”

Merchants involved in the event expected to distribute an estimated 1.5 billion parcels over the next six days.

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TECHNOLOGY

Study: Cyber Monday outshines all Black Friday weekend shopping days

BY Deena M. Amato-McCoy

The Black Friday shopping weekend may span five days, but Cyber Monday is expected to be the most popular shopping day.

In fact, nearly 72% of consumers planning to shop online for Cyber Monday, followed by Black Friday (69%), and then Thanksgiving (49%), according to the “2017 Holiday Shopping Survey,” from Offers.com.

As the tech generation, 88% of millennials will be shopping on Cyber Monday this year – roughly 20% more than shoppers over 35 who plan to do so.

While Cyber Monday is the most favored shopping day overall, Black Friday shopping garnered a surprising surge of popularity with millennials. Specifically, younger generations are 19% more likely than any other age group to hit the brick-and-mortar stores come Thanksgiving and Black Friday.

Technology continues to play a major part of the shopping holiday, especially with a 17% increase in mobile use in the past two years. In fact, all Black Friday weekend long, more consumers will be shopping online or via a mobile device (33%) compared to in-store 30%.

Nearly three-quarters of consumers (73%) plan to use their mobile devices to assist with holiday shopping. While mobile usage is not up among people using it to shop, more consumers are heavily relying on mobile devices to look for coupons, compare prices, check reviews and get directions to the store for an optimal holiday shopping experience, the study said.

As online retailers continue to undercut brick-and-mortar retailers (and offer the obvious convenience factor), online shopping is becoming increasingly compelling for shoppers. Holiday-shopping aside, the overwhelming majority of U.S. adults (96%) shop online throughout the year. Meanwhile, 64% shop online monthly, up 7% from 2016.

When it comes to coupon usage, 77% of consumers will search online for deals before a holiday purchase at least some of the time, and more than half (51%) will do so at least most of the time. Those in the 55+ age bracket are the least likely to search in advance for coupons.

When it comes to specific brands, stores such as Target, Walmart and Kohl’s will be the busiest between Black Friday and Cyber Monday — but for a good reason. Year after year, these retailers have shown major discounts on the top items consumers are looking for, such as clothing, electronics, gift cards and toys.

Specifically, 60% of shoppers will hit Walmart, 45% will shop with Target, and 29% will go to Kohl’s. Best Buy has 26% of shoppers.

A new player in the game is Amazon, having risen to the top spot in consumer popularity within the recent years. With Amazon providing sales on both Black Friday and Cyber Monday, plus fast shipping and no lines, it’s not hard to see why the online retail giant has risen to the top, with 67% of consumers shopping there.

When it comes to the top holiday gift items — and the percentage of consumers looking for deals on these items — clothing tops the list at 54%, followed closely by electronics (TVs, Tablets, etc.) (46%), gift cards (39%), toys (37%), and video games and equipment (33%).

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TECHNOLOGY

Three e-commerce predictions for the holidays

BY Andy Taylor

When it comes to the holiday selling season, there is one easy prediction marketers can make and it’s about online shopping: It will be bigger than last year. When it comes to the holiday selling season, there is one easy prediction marketers can make and it’s about online shopping: It will be bigger than last year.

But just how big will the growth be? And what channels, formats, and devices will see the largest lift?

Here are three trends I predict retailers will see:

1. E-commerce retail sales share will once again spike in Q4
One annual trend that seems set to continue is the Q4 rise of online sales relative to offline sales. According to recent data from the US Bureau of the Census, e-commerce retail sales rose to account for 9.6% of all sales in Q4 2016 before falling back below 9% for the first half of 2017.

Given that e-commerce share has spiked each Q4 for over 10 years, it’s probably safe to say this will be the case yet again in 2017. My prediction is that e-commerce will account for more than 10% of total retail sales in Q4.

That means offline interactions will still account for almost 90% of total retail sales. But I also predict that the most important brick-and-mortar sales day will see big e-commerce growth.

2. E-commerce sales will grow faster on Black Friday than Cyber Monday
Shoppers no longer line up for deals on Black Friday – many go online, resulting in big online retail growth for the historically brick-and-mortar sales holiday. In 2016, overall e-commerce sales actually grew significantly faster on Black Friday than on Cyber Monday.

Cyber Monday was still the largest e-commerce sales day of the holiday season, but in 2017, it’s likely we will once again see bigger online sales growth on Black Friday than on Cyber Monday.

As such, even brick-and-mortar brands luring shoppers in-store with doorbuster sales should give digital channels meaningful focus leading up to the start of the 2017 holiday shopping season. One major channel that reflects this trend is paid search, where on Google, we saw Black Friday sales grow about twice as fast as Cyber Monday sales for retail advertisers last year.

3. Local digital ad formats will be more important than ever before
Over the past couple of years, Google has put more emphasis on delivering locally focused ads to searchers who demonstrate local intent in their queries. One such ad format is Local Inventory Ads (LIA), which are a variant of product listing ads that feature information on when an item can be picked up at a local store.

During the 2016 holiday season, these ads steadily grew from Thanksgiving on, but really took off in the week immediately ahead of Christmas. This increase was likely the result of both increased interest in locally available options from searchers, as well as advertisers becoming more aggressive with bids for local inventory ads, due to time-sensitive shipping demands and climbing shipping costs.

Brick-and-mortar advertisers that don’t currently have LIA campaigns running may find it difficult to get them set up ahead of this holiday season, as it requires that a feed be passed to Google for each individual store the brand might want to include. Further, Google does check up on the accuracy of the feed by verifying pricing and availability during physical visits to the store.

However, brands that already have LIAs running, or plan to do so ahead of Thanksgiving, should be prepared for this format to be even more important during the holiday shopping season than the rest of the year. From Thanksgiving to Christmas Day 2016, LIAs accounted for 11% of all shopping traffic for the advertisers deploying them – I think it tops 20% this year.

There was also another local ad format that grew in importance last holiday season – ads featured on Google Maps. Looking at the share of Google brand text ad traffic attributed to the ‘Get location details’ click type, which primarily comes from Maps ads, we find that shoppers steadily became increasingly likely to search for store brand names within the navigation app in the lead up to Dec. 25.

For non-brand queries (when a searcher does not include the advertiser’s brand name), we find a slight increase throughout the holidays, but then a gigantic spike on Christmas Eve and Christmas Day. This indicates that last minute shoppers are more likely to search directly in navigational apps than at other points during the holiday season.

Any advertiser that has active location extensions added to AdWords campaigns is already eligible to trigger maps ads based on the keywords they’re currently targeting. There is no way to target a campaign only to Google Maps.

All in all, ‘Get location details’ clicks accounted for 2.6% of total Google text ad traffic between Thanksgiving and Christmas Day last year. Expect it to at least triple and top 6% in 2017.

In the case of both LIAs and Google Maps ads, these ads are far more important on phones than on desktop and tablet devices, and accounting for the in-store value they drive will be an important part of mobile strategy this holiday season.

Recap 
In short, e-commerce will grow to account for its largest share of total retail sales ever this Q4. I also think e-commerce sales will grow faster on Black Friday than on Cyber Monday, as was the case in 2016, underscoring the importance of digital even on days which are usually brick-and-mortar focused.
Aside from online conversions, online retail interactions that drive in-store interactions will also grow in importance during the 2017 holiday shopping season. Digital ad formats that promote brick-and-mortar visits, such as Google Local Inventory Ads and ads on Google Maps, should likewise grow leading up to Christmas Day.

Andy Taylor is associate director of research at Merkle, a global data-driven, technology-enabled performance marketing agency, where he is responsible for analyzing trends across the digital marketing spectrum for best practices and industry commentary.

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