Shortcuts / 28 November 2019
Online Mega Sales
If you’ve scrolled through your Facebook feed or inbox and noted that your favourite retailers seem to be having more sales than they used to, you’re probably right. The rise of online shopping has been in no small part thanks to the spike in online sales events, including Black Friday/Cyber Monday, Click Frenzy, Singles Day and of course, the good ole Boxing Day sales. So how has online shopping changed the face of retailing? And what are the major shopping events that now landmarks on the shopping calendar?
How big is online retailing?
Big and it’s growing. According to Deloitte, e-commerce accounts for 20% of retail sales but more than half of the growth in the market in the first half of 2019. That includes everything from the Amazons and Alibabas of the world, as well as food and groceries.
How big is online shopping in Australia?
As in the rest of the world, online shopping is booming in Australia. According to Australia Post’s 2019 e-commerce industry report, more than 73% of Australian households shopped online in 2018.
Despite that, we’re below the international average for sales. Online sales in Oz accounted for 10% of total retail sales in Australia in 2018, up 2% from the previous year. So it’s growing.
Australians are spending more online, too, spending a combined $27.5 billion on goods bought online in 2018, up nearly 25% from 2017. By 2021, these figures are predicted to rise to $35 billion. For context, that’s about the level of revenue Coles Supermarkets took in the 2019 financial year.
So despite our small population, our significant spending power means that Australia is currently the 10th largest e-commerce market in the world.
What’s driving the surge?
There has been strong growth as the big supermarket retailers get their supply chains regeared for the online world. Also incumbent retailers in other sectors like home improvement, for example, are investing in their online channels.But there’s also the popularity of sales events, convenient marketplaces (like Amazon) and buy now, pay later (BNPL) payment options.
There’s some big sales that now shape the online shopping calendar. Let’s start with Singles Day.
Held on November 11, Singles Day was established in the 90s by a group of uni students as a kind of anti-Valentine’s Day where single people could celebrate their single life by buying gifts for themselves. It didn’t really blow up until around 2009, where Chinese online retail giant Alibaba latched onto the idea and turned it into a sales event. It’s now embraced across China’s big retailers.
Single’s Day has become the largest online shopping event in the world, and 20% more was spent in 2019 with sales across the shopping platforms totalling more than A$80 billion. Alibaba co-founder Jack Ma said he hoped the government would give people a half day off of work for future Singles Day events.
What about the Thanksgiving Sales?
With Thanksgiving falling on the fourth Thursday of November in the US, three days are notable. There’s Thanksgiving itself, then Black Friday and Cyber Monday.
Black Friday began as an in-store sale day in the 1950s in the US, marking the start of the Christmas buying period, where people would head to the shopping centre to snap up a bargain. Now, the Black Friday sales have become a largely online phenomenon that keeps on growing year after year.
The online-only Cyber Monday sales event, which falls on the Monday after Black Friday, was established in 2005 after they noticed the rise in sales from the Black Friday sales continued into Monday as people shopped from their computers at work. Those sales are growing in popularity, but by total sales in the US, they are dwarfed by China’s Singles Day. In 2018, Cyber Monday A$11.5 billion (up 19.3%), Black Friday: A$9.1 billion (up 23.6%), and Thanksgiving Day: A$5.4 billion (up 28%).
Black Friday sales have really picked up in Australia and it is by far our biggest online shopping event of the year.
And there’s Click Frenzy?
Unlike other online shopping events which have been imported from overseas, Click Frenzy was launched in 2012 and occurs four times a year for a 29-hour period. The aim is to bring together retail brands and their exclusive offers on a centralised shopping platform. In the past it’s been marred with website crashes and tech issues, but organisers say it’s a successful channel for shoppers and brands.
Amazon’s Prime Day is another one…
Held in mid-July, this is an event exclusive to Amazon’s Prime subscribers. Shoppers spent roughly A$US6.1 billion over the 36-hour event in July 2019.
The increasing popularity of online shopping has also seen the rise of buy now, pay later providers such as Afterpay, Humm, Zip, and many others which allow shoppers to pay off a purchase in installments with no upfront payment. Since launching in 2015, Afterpay has exploded in popularity, particularly among young millennial women, accounting for 6.7% of total online purchases in Australia in 2018.
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