Strategy

“To conquer the enemy without resorting to war is the most desirable. The highest form of generalship is to conquer the enemy by strategy.”
Sun Tzu
The Art of War

11: 11 Singles Day – The Retail Explosion

Singles Day 11

If you missed my In Retail Conversation With…live web session all about Singles Day or 11: 11 the world’s biggest single day for retail sales, you can catch it here on the live recording. Many thanks to Doreen Wang, my guest on the show and the production team, Tuhin and Alex.

 

It’s Christmas

Christmas

Even before you have had a chance to whip on your bikini or Vilebrequin swimming trunks, pack the factor 20 and hot foot it to the nearest beach. The sight and sound of Santa can be heard.

I was in New York last week. More on that in another post but on the obligatory walk down Fifth Avenue to see the latest and greatest in retail I spotted Santa. Well not just Santa but an entire Christmas store that had just opened its doors for the season.

I know a first mover advantage with Christmas decorations is a sharp retail strategy that works, but in July!

So I had to go in and take a good look around.

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Quite a range as you can see and yes people were actually buying.

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Things are looking up for holiday sales in 2015. The outlook is much more favourable than it was this time last year.

With Christmas marketing campaigns signed off by now and many in production, with stock on the high seas on the way to retailers across the globe the holiday season is mostly set. Now it’s all about execution…but do us all a favour please wait till the summer holidays are over!

Now It Gets Interesting

Amazon

Not content with the established big national and religious holidays being turned into major shopping events retailers over time have invented their own calendar of shopping holidays that no one asked for or really cares about..

Undoubtedly the most successful of these recently has been ‘singles day’. This self-created day has been taken to epic proportions by China’s Jack Ma’s Alibaba.

What began in 1993, as a student led anti-Valentine’s Day at Nanjing University, situated in the capital of Jiangsu province in Eastern China, where single people could buy things for themselves has become a gigantic consumption event.

Alibaba embraced the concept to boost sales it has now become the World’s biggest online retails sales day. It compares with “Cyber Monday” in the US, the Monday after Thanksgiving, which is also marketed as a big online shopping day.

Here are the Alibaba ‘Singles Day’ numbers.

In November 2014, Alibaba rang up record sales of $9.3 billion dollars from “Singles Day” yes that right $9.3 Billion in 24 hours.

Nearly all the 30,000 merchants on the internet retailer’s platform offered discounts the 2014 event attracted the participation of more international brands a well including Japanese label Muji, Spanish clothing retailer Desigual and American outdoor clothing label The North Face.

That 24 hours trading resulted in 278.5 million packages in transit through China. Jack Ma himself appeared to reporters to say the logistics of delivering these packages made him nervous.

To find out more about singles day watch this video

 

So enter the latest ‘Prime Day’

Slated for today Wednesday July 15.

This time by Amazon. Ostensibly to celebrate Amazon’s 20 year birthday and for the now ubiquitous 24 hour period only.

Billed by Amazon as bigger than Black Friday with deeper discounts and new deals being released every few hours. Its point of difference is that it’s only available for Amazon Prime subscription service members and in only 9 countries.

In normal times that would be that.

But we don’t live in normal times.

We live in a dog eat dog fight in omni channel retail. So enter Walmart to the party. Raining of Amazons parade – or at least trying to.

It is launching 2,000 exclusive roll backs, across categories such as electronics, baby, home and toys and it will last for 90 days. In addition to these Walmart promises some ”atomic deals”

Walmart

Perhaps a year ago Walmart could have ignored this Amazon move but not today. With its stock having lost some 23% of its value since January 2015, it needs The Street to know that it’s still an Amazon fighting force.

Amazon meanwhile is perusing its own strategy. Whilst it is notoriously fugal with its sales and customer data. It is not too difficult to see the Amazon Prime strategy at work here, on Prime Day.

Signing on more Prime members. According to non Amazon sources 45% of Amazon customers in the US have signed onto Prime. That’s some 40 Million and that’s nice but this is even nicer…

Amazon prime members spend more than double non-members.

Happy Birthday indeed.

The Next Few Days Will Be Crucial

China

And no I don’t mean Greece and the Euro…

The Shanghai Composite Index has been seeing a lot of Red. Normally in China red is good…But not this type of red.

The Shanghai Composite has lost some 30% of its value since its June 12 peak.

Over the past two weeks of trading more than $3Trillion has been wiped off the value of Chinese companies. Everything in China is big but if you put it into context that is more than the Spanish, Russian, Italian, Swedish and Dutch stock markets combined according to The Financial Times.

Perhaps the most significant element to this is that the policy makes in Beijing have been trying to stop the decline with a number of financial measures, not least buying shares it appears. But, unusually the strong arm of Beijing is having little impact with both direct and indirect intervention.

Bank of America Merill Lynch forecasts the composite to close at the end of December at around 3,600 from the June high of 5,166.

This might not be far off the mark for if this goes on for much longer more investors will face margin calls which will require more liquidation of their holdings…

This is the first time many retail investors in China have felt the pain of the sea of red. Investing in the stock market has been a one-way bet. Now they are experiencing the downside in investing in Companies they really don’t understand and for the first time they don’t like what they see.

Don’t underestimate the Chinese Government determination to bring order back to the market. Thy have thrown a lot at this problem but they still have more left.

Red really is the new black.

Interview with Sir Martin Sorrell

As part of the BrandZ Top 100 Most Valuable  Global Brands 2015 launch activity we interviewed WPP CEO Sir Martin Sorrell. Here you can see my interview with Martin. As 2015  is the 10th anniversary of the BrandZ global brand rankings we covered a lot of ground… I asked him first to give his perspective of the last 10 years from a global business leaders point of view. You might be surprised by his answer…

In Retail Conversation…The Holidays

If you missed my live “In Retail Conversation with… Bryan Roberts”  which we broadcast a couple of weeks ago here is the recording. We covered a lot of ground around retail holiday sales, the impact of Black Friday, eCommerce and what retail 2015 is going to bring and a lot , lot more. Hope you find it interesting.

Here Is The Report

China Top 100 2015 Cover

Have had many requests for a copy of the just published BrandZ Top 100 Most Valuable Chinese Brands 2015. So just click here or on the image above and you can download the entire report. Hope you find it insightful and enjoy the great pictures by Cecilie Østergren.

 

 

It’s not yet Christmas and yet it’s Boxing Day

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Christmas and Boxing Day are fast merging. Just look at the above from London’s Oxford Street. It’s a retail trend that is cutting across all holiday events. Getting in early… the art of the retail pre-emptive strike.

One of my predictions for retail in 2015 is the growing importance of O2O (online to offline) across the world for retail especially in China – now the world’s largest eCommerce market. We will be seeing more use of digital and physical retail assets being interrelated and at holiday times getting ahead and locking in consumer spending.

Todays press ads from John Lewis and Currys- PC World  in the UK (below) are an example of how getting in early and O2O are manifesting themselves. The Boxing Day sales starting virtually on line even before the Christmas turkey has even been defrosted let alone put anywhere near the oven and then moving later into physical spaces. We will be seeing a lot more of this in 2015.

JL

PCW

Thank you for reading my blog during the year and for all your comments and feedback, it is much appreciated.

Happy Holidays to you all.

David

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