And it’s this special day in the Chinese shopping calendar that’s throwing up intriguing hints about whether UK retailers will back a sales bonanza of our own on Black Friday this year.
What is Singles’ Day?
Singles Day was invented in the 1990s by a group of (male) students in a Chinese university, as a way of celebrating their single status. The ultimate antidote to Valentine’s Day.
Customs soon sprang up around this event including eating deep fried dough sticks called youtiao (said to resemble the number 1), going to karaoke bars with single friends, and a tradition of self-gifting that has morphed into a retail phenomenon – promoted even by our very-own 007!
Now affluent, single people (and everyone else) across China are indulging themselves through shopping on 11th November each year.
And backed by online giants such as Alibaba and JD.com, in 2015 it’s set to become the largest single retail trading day in the world.
But in the past not all retailers have thrown themselves into these traditions (think Black Friday and Cyber Monday, too) with such vigour.
Early statistics from Singles’ Day 2015
- Tech in Asia reports as of 7:45am China time (today), Alibaba reports it has done more than US$6.5bn in sales!
- Alibaba had racked up more than US$5bn in sales in the first 90 minutes of the sale.
- In context the UK is predicting £1bn in Black Friday sales. In equivalent terms, one (albeit) large retailer in China did that figure in approximately 30 minutes!
- 72% of the company’s sales had been processed by Alipay via mobile
Luxury brands have been traditionally jumpy about discount days
Premium brands’ carefully crafted reputations coupled with their customers’ expectations mean they rarely discount and therefore they have traditionally stood well back from discounting activity and a lot of them (as well as many mainstream brands in the UK) have opted out of Black Friday/Cyber Monday altogether.
But now – one luxury brand HAS joined the Singles’ Day scrum
As part of our client competitor analysis we’ve been alerted that Farfetch.com is today running a site wide 22% off full priced items as part of a Singles’ Day promotion in China.
This offer will be across their concession brands (including but not limited to) Dolce & Gabbana, Kenzo and Alexander Wang.
With this activity they’re set to engage with a key luxury consumer base and demographic.
So what will this mean for their Black Friday, Cyber Monday & December promotions?
I recently heard Stephanie Horton (Farfetch.com‘s CMO) state 70% of their sales are at full price.
But given the scale of Singles’ Day, an interesting question is raised.
Will Farfetch.com now run a similar offer on Black Friday and Cyber Monday to its UK and US customer base?
And if they do, what will be the response from its direct competitors such as NET-A-PORTER, Matches Fashion and mytheresa.com?
Does this open the luxury floodgates?
Naturally, it is commonplace for retailers to operate minute-by-minute analysis of competitor offerings and react quickly with like-for-like deals.
However, this is the norm for high street retailers or slightly more commoditized sectors, such as electronics.
So, it is fascinating to think how haute couture and fashion designers around the world will react to this? Never mind the marketplaces and retailers that sell them.
Isn’t luxury above discounting?
Now, Farfetch.com isn’t the first, nor will it be the last to discount. However, given the ever-increasing pressure surrounding Black Friday and key Q4 trading days, will this large scale discount be repeated in Western markets?
It’s not for you…
It is a relatively common tactic for retailers to offer slightly more appealing consumer offers in new or foreign markets.
This is mainly to attract new customers, compete with that country’s local legacy brands, or increase their market value.
So as this was a targeted offer for China, Hong Kong and Macau only, is it Farfetch.com’s position to only observe cultural trading days outside of their “home” territories? I suppose only time will tell.
Our friends at Experian recently stated luxury consumers are 4.7x more likely to be searching for “Black Friday” and have actually been doing this as early as September.
Is it time to change?
But, putting retail trading opinion or typical luxury exclusiveness aside, is it time to realise these kind of retail events are really for everyone – rich and poor?
Are these much hyped trading days the new loyalty offerings?
Is discounting the new black?