While huge discount sales days like Click Frenzy, Cyber Monday and Singles Day are great for consumers, they pose a risk for retailers, says Andrew Birmingham of Which-50.
As massive online sales days like Cyber Monday in the US, Singles Day in China and even Click Frenzy in Australia take hold, a new risk emerges for retailers – a world of permanent rolling global discounting.
Australia’s retailers, it seems are piggybacking off the publicity attending the Cyber Monday sales in the US.
Hot on the heels of the local Click Frenzy event last week some local retailers have implemented sales programs to also catch the buzz around the giant US event.
According to Adrian Christie, director of communications at PayPal Australia, “Many Australian retailers are releasing their own Cyber Monday sales, with PayPal merchants such as Tigermist and Stylerunner, taking advantage of the swell in Australian and overseas online shoppers over this holiday period.”
This raises an interesting long term question for the shopkeeping crowd. As more and more countries launch their own online shopping sales equivalents, the incentive for consumers will be to chase the sales around the world.
The end result, margins will coalesce around the lowest common denominator, where ever it is on the planet.
The US with Cyber Monday, China with Single’s Day and even Australia with Click Frenzy are all bunched around the final quarter of the year, when local merchants do much of their business.
Already the infrastructure is being put in place to allow consumers in one market to exploit the online sales opportunity even when retailers in overseas jurisdictions won’t ship internationally. For instance Australia Post’s recently launched a program to allow Australian consumers to leverage its US address. Then it takes its fee on the way through.
More mobile than ever
Christie told Which-50, “At PayPal, we’ve continued to see significant increases in global mobile payment volume year on year. While we saw a larger increase last year, at the time there were less people shopping on their mobiles; therefore the increase was from a smaller base. Today, the mobile shopping population has significantly grown with a 62 per cent increase over 2014 Black Friday sales indicative of the maturing uptake of mobile commerce.”
And the evidence is starting to mount that national sales are collecting an international audience. Chinese Singles Day which dwarfs the US Cyber Monday sales not only attracted record sales this year but its biggest source of consumers was not China. Instead shoppers from Russian, the US and the UK lead the way.
In Canada, while the country has its own flavour of Cyber Monday coinciding with activity south of the border, the US version allows its consumers easy access.
As Which-50’s Toronto based Arabic translator and occasional correspondent Buffy Montauben puts it, “In general everything is cheaper in the US.”
Paul Greenberg, executive chairman of the National Online Retailers Association told Which-50, “There is a big challenge for retailers. All of these events are really driven by discounting. I am big proponent of the ‘Flatworld’ of shopping but not everything can always be about slicing the guts out of pricing.
“That said, there are alternative approaches, such as the Dubai Shopping Festival.”
While there is an obvious threat for local retailers if the world moves to a rolling cycle of knock down sales across the globe, the road at least runs both ways.
Christie said PayPal, works with over with over 110,000 Australian businesses to promote cross border trade. “We’re seeing that more international consumers are recognising the great talent pool of online goods and services in Australia, and local retailers are reaping the benefits.”
While Black Friday and Cyber Monday have been long-standing traditions in the U.S, Australian retailers and shoppers alike are taking advantage of the huge online opportunity during this period, said Christie.
PayPal data released today revealed Black Friday sales resulted in a 62 per cent increase in global mobile payment volume, compared to Black Friday in 2013.
“Furthermore, as of 6:30AM AEST (11:30AM PT) this morning, Cyber Monday 2014 saw a 39 per cent increase in PayPal mobile payment volume in comparison to the same time on Cyber Monday 2013,” the company revealed in a statement.
“Aussies are increasingly turning to their mobiles to tap into great holiday deals in the lead up to Christmas, both locally and globally,” he said.
“This year, one in five (21 per cent) Aussies intend to use their smartphones more to search for and buy Christmas gifts, recognising the huge opportunity to shop on the go and embrace American holiday traditions that benefit Aussies as well.”
Andrew Birmingham is the editor and publisher of Which-50.