Each November, global retail sales are buoyed by two very different events. While US and European shoppers battle for bargains over the Black Friday weekend, Chinese consumers enjoy the largest online retail event of the year – Singles’ Day.
In the UK, online sales reached an estimated £1.23bn on Black Friday this year. But to put that into context, Singles’ Day generated sales of $17.3bn (£13.7bn).
These figures are a testament to the unstoppable growth of Chinese retail. Though the Chinese retail market is much larger than its UK counterpart, British firms should look to borrow some aspects of the tech-savvy Asian market in order to broker a new relationship between digital and physical retailing.
UK firms should seek to emulate three aspects of Chinese retail. They must be willing to embrace advances in data analysis, become receptive to alternative retail techniques and should seek to free themselves from the established business practices that frustrate innovation.
A recent McKinsey report found that most Chinese ecommerce takes place directly between consumers on digital marketplaces. While traditional retailer-to-consumer platforms are popular, they contribute less to the overall proportion of sales in the retail market than consumer-only sites.
Chinese retailers favour a multichannel strategy that includes consumer-to-consumer sites, traditional retail platforms, and crucially, cloud computing services that gather and analyse data on consumer shopping habits. This allows retailers to offer tailored goods and services across multiple platforms, allowing Chinese firms to target individual customers with unique offers.
Finally, large Chinese retailers are often younger than European and US firms. Young companies are unencumbered by legacy issues and as a result are more receptive to the implementation of the new industry-disrupting innovations.
For UK retailers, the Chinese ecommerce model can be a source of inspiration for a new settlement between online and in-store retail. British firms should embrace an omnichannel retail strategy that uses consumer information to provide a comprehensive shopping experience. This strategy relies on an interdependent relationship between digital and physical retail, reflecting the modern consumer’s expectations of connectivity between in-store and online platforms.
Traditional stores must have the courage to disrupt the established methods of retail, embracing new technologies and orientating their digital presences to offer consumer-to-consumer services and a cloud data-mining capability.
By adopting new technologies, sales platforms and working practices UK firms can begin to disrupt the status quo. The choice for UK retail is simple.
Tom Adeyoola is the founder and CEO of Metail