Retailers need to make Virtual a Reality
The end of the year has fast become one long shopping bonanza. In the US, heavily promoted sale dates such as Black Friday, Cyber Monday and soon, Christmas, the final peak of the shopping season, are the retail highlights of the year. Consumer spending rose solidly in November: Black Friday netted retailers sales of about USD 10.4 billion, which was USD 1.2 billion less than 2014, but Cyber Monday came along to make up the difference and more, netting another US$3.07 billion.
Meanwhile, in China, what started out as a joke is no longer a laughing matter: Singles Day. Sometime in the 1990s, a few Chinese college students fed up with the hoopla surrounding Valentine’s Day declared a new holiday – Singles’ Day – which would be held annually on 11/11. In 2009, Chinese ecommerce retail giant Alibaba decided to take Single’s Day mainstream, creating the equivalent of Cyber Monday. In just three years, it went from nonexistent to surpassing its American rival. Now, Singles’ Day has reached another milestone: this November, Alibaba grossed USD 14.3 billion. A single Chinese company with not a single store sold more than all U.S. retailers on Black Friday and Cyber Monday combined.
Even more astonishingly, nearly 70 per cent of goods were bought with a mobile device. That means Alibaba sold almost as much just via smartphones as all the retailers in the U.S. combined sold on Black Friday. China’s digital natives have completely bypassed desktop computers and gone straight to adopting mobile devices – there are currently about 1.3 billion mobile phone users in the country. These users shop differently, buy differently, and think differently than the traditional customer many retailers are used to. In fact, many of them—millions of them—will never darken a shop door. Their entire experience with a company is virtual.
Where China leads, the rest of the world is following. This year for the first time more Americans shopped online over the Black Friday weekend than did in stores—about a million more, according to the National Retail Federation. While in-store purchases still outstrip online overall, that scale has begun tipping the other way—and is probably tipping much faster than you think.
Retailers need to move with the times and instead of thinking of themselves as a retailer with a website, they need to become a retail brand—the same brand a customer experiences, regardless of how they experience it. Their interactions with a company have to be uniform, whether it’s on a retail website, via the company’s social media, on the phone, over email, or in an actual store. This omnichannel approach is the only way retailers are going to survive the onslaught as ecommerce giants dwarf their bricks-and-mortar counterparts.
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