Deep Discounting Doesn’t Guarantee High Sell-Out: While discounts play a major factor in sale events, offering deep discounts does not necessarily translate into higher sell-out. Indonesia, which had the highest amount of discounted items (80%) and deepest discount range (50-59%) during Singles’ Day resulted in the least total sell-out compared to the other two countries.
Full price sell-out increasing by 5x more than an average day also proves that some customers are willing to pay full price. This gives an opportunity for new arrivals launching on a big sale event such as Singles’ Day. Nike recently capitalised on the Singles’ Day hype by launching Air Max 270 React and Air Jordan 5 in new colourways on 11.11.
Importance of Non-Core Categories: Core categories such as Tops are known to be the key sales driver for brands. However, as overall sell-out contribution for Tops showed a decline this year across all markets in both womenswear and menswear, it revealed that other non-core categories such as Accessories, Jewelleries and Bags were just as important.
Next Steps for Brands
Review Markdown and Assortment Strategy: For Singles’ Day, 30-39% off is the most popular discount range and has proven to work for the SEA markets. Given the hype surrounding key retail events such as Singles’ Day and Click Frenzy, brands and retailers can avoid deeper discounts to protect margin.
Brands should then review the type of products that they offer during these events to take advantage of the traffic. As consumers have become smarter, putting exciting products on sale is also crucial. Retailers need to think of Singles’ Day as a marketing opportunity, not just an opportunity to clear old stocks. Products with little to no size variants such as bags, scarves, accessories are also ideal during these events to minimise product returns.
Participate in New Retail Events: All these new retail events create both risk and opportunity for brands and retailers. Given the success seen at Alibaba, Shopee and Lazada during Singles’ Day, the event is set to grow year-on-year. Hence, participation in this sale event has become a barometer of brands’ presence in the market and an opportunity for them to take part in a substantial sales drive. Brands who are already participating in the event should review and manage pricing yearly and monitor competitors’ performance to help reveal categories with the most potential.