Retail Radar – Singles Day; An Opportunity? Depends on your Location
The emergence of Singles Day can be an Opportunity for some…
Kepler Analytics is in a unique and privileged position. We have our sensors in over 3000 locations globally, collecting traffic and other consumer behaviour data anonymously. Our clients provide us with their daily sales targets, actual POS sales and other specific data points on which they measure and manage their businesses. By aggregating and anonymising this information, we can provide unique insights into the Retail Industry as a whole, benchmarking measures on traffic, sales, conversion, and other associated KPIs to help retailers better understand consumer behaviour and drivers behind retail sales. The Kepler Retail Radar (KRR) is published every 6-8 weeks and aims to share what we’ve learned from our network of Retailers and deliver helpful insights which assist in understanding historical performance, but also highlight opportunities for better results in the future. Visit our website www.kepleranalytics.com for more information.
Singles Day – What is it?
In recent years, the emergence of China’s “Single’s Day” is having ripple effects across pockets of the Australian Market. Single’s Day (11/11) is a shopping holiday popular among young Chinese people that celebrate their pride in being single. A sort of polar opposite to February’s Valentine’s Day. The holiday is now the largest offline and online shopping day in the world with sales totalling US$25.4 billion in 2017.
As we approach Singles Day 2019, many retailers should be focused on whether this event will surface in the Australian retail landscape as an event worthy of note. Most will have not noticed a significant impact in recent years. Some will have tried to take advantage of the event. All should be focused on the comparison of Black Friday 2018 versus Black Friday 2015. This former “non-event” has rapidly turned into a key day that Kepler recently discussed in another retail radar (can be found here).
The reality is Singles Day has been a very localised event in Australia. Its demographic appeal has been so far, a relatively small, but incredibly important proportion of shoppers. The evidence left by Singles Day lies in the purchase outcomes and the transacting behaviour, rather than in the sheer weight of numbers as seen in events like Boxing Day and Black Friday. It is also localised; the impacts are not to be found everywhere.
We have grouped centres in terms of our suggested prevalence of a typical Singles Day shopper. We have focused on the draw card centres and CBD locations across Australia and we have called these our “Focus Centres”. The purchase behaviour evidence in these centres that you will see below, differs from the behaviour in the “Non-Focus Centres”, which is effectively over 150 other shopping destinations Australia wide.
As mentioned, because of the narrower reach of the event, we do not see a widespread significant boost of traffic in the “Focus Centres”. In fact, the traffic rise is proportionately less than what is seen across the wider retail landscape (see figure to the right). Shopping Centre traffic mildly trends upwards.
There is as mentioned, no
weight of numbers. In fact, when we looked at the weekly results, indexed
versus three weeks prior, Focus Centres are a mere +6% up in centre traffic,
versus +10% for Non-Focus Centres. Certainly, it is not an auspicious metric to
In fact, looking at the daily traffic weight, the lead up to Singles Day is responsible for the traffic boost. The actual day shows a decline in traffic of -3.3% in Focus Centres, compared to a +3.5% rise for Non-Focus Centres.
Are customers researching potential purchases prior to the event? Are potential customers finding offers in store, or are they leaving the store disappointed?
Overall though, we do see a weight of shopping intent. The three key sales drivers each exhibit significant and demonstrably different purchase behaviour. We will look at each in turn.
Shopfront Conversion: Retail Vitality
Shop Front Conversion, defined as the proportion of Outside Traffic that enters a store for a meaningful amount of time (and that accurately excludes store staff), rises in Focus Centres in comparison to the general retail arena in Australia. For the entire week, store traffic (Inside) rises +15% in Focus Centres versus a +12% rise for Non-Focus Centres. This differential is due to a +8% indexed rise in Shop Front Conversion against a -0.3% decline for Non-Focus Centres. This is a significant increase with an average passing traffic of approximately 7,000 for 11/11 alone; each point of variance can have a material impact for the astute retailer that has used Kepler to boost sales conversion behaviour on shop floors.
The traffic boost on Singles Day itself is not there though, with both Focus Centres and Non-Focus Centres rising approximately +3%. This is quite a contrast to the day prior, where Focus Centres’ store traffic (Inside) rises by +11.8% versus a mere +4.4% in Non-Focus centres. Is this research prior to purchase? Or are customers merely stretching their legs before spending the day shopping online? Active retailers should be aware of this upcoming spike in traffic in key centres rather than relinquish their customers.
I want a deal, and I want to buy
These customers are searching for bargains and discounts. Average Transaction Value on Singles Day declines -7.1% against a -3.3% decline elsewhere. These bargain shoppers are loaded with intent.
Those that persisted in their search to find the deal then purchase in large numbers. Sales Conversion rises an indexed +9.5% against +1.8% elsewhere. This is an active customer.
Having sought the deal the day before, it is now purchased. Transaction volume +10.9% and Total Sales $ +5.8% both increase at over double the rate of Non-Focus Centres.
It is a short and local event, but it seems to be one worth pursuing if you have stores in the right locations and the right media to communicate the offers.
This gifting season will be a challenge, as they always are. This Singles Day event may offer a narrow window to out an extra point or two of growth in the November Result as December may be uncertain. Good offers in relevant centres that are communicated to customers at least a few days in advance are suggested. Start early, be prepared to catch the researching customer, and be relevant to a narrow target audience.