How To Tap Into Future Singles Day Sales
There’s a Mother’s Day, a Father’s Day, a Family Day (in Canada and South Africa) – and now there’s Singles’ Day (celebrated last week), a Chinese holiday dedicated to the joy of singlehood. But like everything else in this globalized Internet-centered world, fun events, holidays, and commemorations are taking on an international flavor. And that goes for Singles’ Day as well; created by Chinese university students and promoted by Alibaba, Singles’ Day has turned into the biggest Internet shopping day, netting $18 billion this year alone – that’s bigger than Black Friday and Cyber Monday combined, or any of the top December pre-Christmas dates.
And while Singles’ Day has yet to make it across the Pacific, American and European companies are all in, offering clothing, electronics, and much more to consumers in China. On November 11th, American e-tailers like Costco, American Eagle Outfitters, Calvin Klein, Uniqlo, Nike, Adidas and New Balance competed with e-commerce sites from around the world for a slice of the $18 billion in sales that Alibaba handles, as it processed $1 billion worth of orders in the first 5 minutes. If past performance is any indication of future results, next year’s Singles’ Day could see even more astronomical numbers.
Alibaba has turned Singles’ Day into the biggest web sales phenomenon on the strength of Chinese sales alone – and naturally, the company wants to export it to the rest of the world. Like Black Friday and Cyber Monday, one of the charms of Singles’ Day for consumers is the low pricing for everything offered – and as the phenomenon expands to encompass more retailers and more countries, smaller e-commerce sites may find themselves boxed out of the big business taking place on that day. That’s because they won’t be able to match the discounts offered by bigger sites that can afford to offer loss leaders to attract customers and perhaps get them to buy higher-priced goods.
So what can e-tailers do to compete? It turns out that there is a winning strategy. A recent study indicates that even more than low prices, customers prefer to buy from sites that offer interest-free card-based installment payments. In fact, when credit card users are offered interest-free payments on their existing credit cards with no credit check or application process required, more than half (54%) of credit card users prefer installments over free shipping. Similarly, 53% of credit card users favored installments over a 10% discount.
In a card-based installment payment scenario, customers buy whatever they want and pay for it over time. For example, a customer who makes a $500 purchase can opt to pay it off over ten months, with each payment being $50. The purchase is secured by the customer’s credit card, but the card is charged the agreed upon amount each month, without interest. The system is very popular in half a dozen countries around the world, and affords consumers an easy way to understand and control their finances. Instead of making just the minimum payments on credit cards – with interest piling up – consumers know how much they have to pay, when they have to pay, and when they will be finished paying off their purchase.
Even among high-income consumers, who earn as much as $150,000, interest-free payments trump incentives like low prices and free shipping as a reason to patronize a site, with over 60% saying that payments were a more important feature for them. In addition, the survey revealed that 40% of credit card users would increase the size of their purchase by at least 10% if offered interest-free installment payments.
Such is the power of interest-free card-based installments, that they are preferred even over discounts and other offers, among shoppers of all kinds, and certainly shoppers who will be buying on Singles’ Day. For e-commerce sites that adopt this strategy, the path to success on Singles’ Day – or any other day – could be a lot smoother.
About the author
Gil Don is CEO and Co-founder of Splitit, a payment tool that offers credit-card based installments. Gil has extensive experience in sales and management. He is highly skilled in business analysis and negotiating and is customer driven. He serves as the Regional Manager for one of EMC’s product divisions, responsible for driving sales, building customer relationships and establishing additional channel partners. Prior to EMC, Gil was VP Marketing and Sales for leading technology system integrators like Ankor systems and We!
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