It’s that time of year again when marketing and sales teams are looking ahead to Single’s Day and dreaming big. Every year for since the magical 11/11 was conceived as an ecommerce sales extravaganza, business has grown for all involved. And in that time we have seen a perfect storm brewing through the combination of China’s enthusiasm for their smartphones and the will of manufacturers to feed on demand with ever-improving deals. With an incredible 85 percent of JD’s ‘June18’ orders being mobile this year (2.2 times last year) we can only assume this trend will be just as big come Single’s Day.
And not satisfied with a single Single’s day, Alibaba sought to reap further reward by expanding the festival into a three-week event. From a Western perspective, it’s the equivalent of putting out the Christmas promotions as soon as Halloween is over.
We can not fault the platforms for attempting to bring more value to their customers (JD has taken a similar stance, stretching its June 18 shopping spree across 18 days), we do however have to be careful that this does not become a year-round search for deals that devalue brands in the process.
So, given these dynamics, how should brand marketers view this phenomenon and in particular take advantage of the very clear mobile-driven opportunity?
Leveraging the power of mobile connections is a clear place to start. With everyone connected to mobile 24/7 it is easier to communicate with people, to keep them informed of the shopping opportunities, build excitement, and have them engage with promotions and live online events. Furthermore with the social connections built in, it is easier to activate groups; who better to deliver relevant targeted communications than our friends on WeChat? This network-effect is evident as we saw over 200 million shoppers visit Tmall’s 11/11 event in 2016. Contrast that to the 110 million viewers of the biggest media event in the West—The Super Bowl—and we quickly see the potential for marketers and sales teams in China.
With power comes responsibility. While the attention given to these sales events is clearly huge, and a wonderful opportunity for brand and product exposure, three critical issues surface during sales bursts of this nature. First, it trains consumers to habitually look out for deals rather than buying based on brand affinity or clear product relevance. Second, it disrupts the sales cycle for many manufacturers who subsequently face a large sales hangover due to shoppers stocking up. Thirdly, with sales periods extended up to three weeks, our programs require a more strategic view well beyond the typical one-off sale approach. While sales are of course positive, we need to look at how we can use the mobile connection to add more commercial value beyond being an easy access point to discounted products.
First, we need to find ways to promote year-round connections based on this single sales event. We cannot afford to turn our consumers into deal-hunting parasites. We must endeavor to deliver a positive shopping and product experience that extends beyond price considerations. This will thereby bond the Single’s Day sales-seekers to us and provide the opportunity to sell products at higher margins during non-festival periods. Mobile can play a central role in this connection if we convert consumers into our WeChat programs and utilize this channel to build brand affinity.
Second, address the pantry-loading behavior of existing consumers—those who perhaps would buy our products anyway despite the discount. Of course they will continue to take advantage of the offers available, but let’s utilize those moments to increase penetration by amplifying the sale beyond this existing consumer, perhaps through social sharing. Done well, this gives us the opportunity to access new consumers and use the sales event as a way to bring future consumers into the portfolio.
Third, a full “mobile-first” communications plan is required for theses extended sales events as well as a follow-up plan attempting to engage consumers beyond the initial campaign. 11/11 and June 18 are huge fishing nets, and we must ensure that we maximize the catch and potential future yield. Integration with OOH media is a great place to start with much of this dominated by transit-based communications (subway and bus stops). Given the dwell time of consumers while they wait for their connections, this is the perfect moment to deliver richer mobile experiences and social connection beyond the typical promotion of flash sales.
Last but not least, consideration must be given to the physical retail plan during this time, to better maximize the sales festival fever. While so much media attention is pointed at ecommerce our consumers are still visiting retail stores for their daily needs. Retailers will be paranoid about their own sales during this time, so brands that can bring category solutions will benefit—both in the immediate term but also through longer-term support from the retailers themselves. And again, given the heightened attention to mobile from consumers it makes perfect sense to deliver retail-store-based mobile engagement designed to drive sales and build relationships.
A classic recent example was observed from Uniqlo. During last year's Single’s Day promotion, Uniqlo encouraged consumers to buy online and pick up offline. In this way, they increased the store foot traffic leading to additional purchases, and reduced delivery cost and time. This also removed the potential friction point of garment-size selection thereby increasing the overall service-led approach to the sale and demonstrating true shopper-first understanding. During last year Single’s Day, Uniqlo achieved RMB 100 million in sales within 2 minutes and 53 secs, the fastest on Tmall—even Uniqlo didn’t expect such a result. The added benefit of an in-store experience should see Uniqlo increase their valuable multi-channel shopper segment.
These big-bang sales events are clearly here to stay and we see mobile continuing to play a pivotal role for brands and consumers. And given their scale the key will be to think more broadly about the opportunities beyond one-off sales and also be very clear about the impact on the annual sales and marketing plan. If we are to protect our brands’ strength in the face of powerful yet potentially disruptive discount-driven events, we must look to create more intimacy and connection with our consumers for year-round success. And there is no better partner for this than the mobile rainmaker.
|Gareth Ellen is regional planning director and China COO with Geometry Global.|