Double 11 keeps its sheen even as consumers hunt for larger discounts and more value

The Double 11 phenomenon may look a little different this year, but it will continue to hold sway on shoppers looking for a good deal. The annual AlixPartners survey tracking China’s biggest shopping festival has found that nearly 60% of consumers are looking to increase their spending this year over the last. Younger consumers are more likely to increase spending, with more than 60% of consumers under the age of 26 saying they would likely do so.

However, most are looking to spend more on daily necessities. Consumers said their biggest drivers for increased spending are attractive discounts, the expectation that the festival will offer a better deal, and the longer duration of discounts, which allows for extra time to make more discounted purchases. Consumers also said that they had become accustomed to stockpiling because of the pandemic – likely influenced by the recent uptick in COVID-19 cases across various parts of China.

The platforms have responded with some of the largest discount rates in recent years in an attempt to attract and satisfy the needs of the savvy shopper. Taobao is offering discounts of 50 RMB for every 300 RMB purchased across the platform (up from 30 RMB on every 200 RMB last year) and JD.com is offering a similar 50 RMB discount for every 299 RMB purchased.

Almost half of surveyed consumers plan to increase their spending over last year on daily necessities, followed by purchases of clothes, fashion, and footwear, and home care and lifestyle products.

Last year’s revenge spending trend – sparked by the blip of 2020 – seems to have waned as consumers prepare for a slowing economy. Among respondents who indicated that spend was likely to decrease this year, most said they were less optimistic about the economy and that they were trying to consume less. Consumers are also more conscious of product quality because of the changing economic conditions and the impact of COVID-19, and only want to spend when equipped with adequate product information and when it was necessary to do so. Based on their experience of the festival in 2021, consumers said they would like to see larger discounts and less complex promotions this year. Overall, this points to a more “conservative” consumer, one who wants to be armed with the right information and knowledge before spending.

A feast of festivals

Inspired by the success of Double 11 over the last 14 years of its existence, a host of shopping festivals – often lasting longer than a day – have sprung up. This means that consumers would have already experienced several occasions to spend by the time November rolls around. This year alone, there was one discount festival approximately every month. In encouraging news for retailers, however, consumers do not seem to be done with hunting for deals. While 88% of consumers said they also participated in other discount festivals throughout the year, 53% said that will have no impact on their Double 11 spending and 27% said they would in fact spend more as a result.

Livestreaming remains popular – with bargains beating out loyalty

Livestreaming continues to be popular, but consumers are more than willing to switch platform loyalties in their hunt for a good deal. Three in four consumers watch or participate in livestreaming, and they’re doing so because they’re looking to buy a specific item and/or understand how it performs. The most popular content on livestreams includes free or exclusive gifts, discounts, personalized offers, and the ability to pressure-test the look or quality of a product in a way that’s not possible with a traditional commercial.

Unattractive discounts or prices and a bad shopping experience are the main reasons for consumers not shopping on a given platform. On the other hand, product or brand availability, ease of use, and better discounts than others are the biggest factors when choosing a shopping platform.

While Taobao remains the leading livestreaming platform, TikTok is catching up aggressively with a 50% percentage point increase year-over-year. TikTok penetration is evenly spread out across age groups and city tiers – however, it was the leading platform of choice for higher income consumers.

Among those who watch livestreaming, 44% said negative news surrounding the livestreaming industry and its key opinion leaders (KOLs) have made them less engaged with this form of shopping/entertainment.

Even with a more conscious and conservative consumer, there is an opportunity for retailers to make the most of these shopping extravaganzas. In fact, it is more important than ever to get tactics right. So, what can retailers do to make the most of Double 11 and other shopping festivals?

Target the right products on the right platform: With loyalty becoming increasingly scarce in the age of the powerful and opinionated me-centric consumer, retailers cannot afford to be everything for everyone. Figure out where your customers are shopping and exactly which products they’re looking to buy there. Glean consumer insights so you can target the right product to the right customer on the right platform at the right time.     

Spread out the marketing love, or consolidate it: Double 11 is likely to remain the key headline event for the foreseeable future. But with consumers spreading their dollars across different discount festivals, retailers must prioritize as well. Which event lines up more with your brand and marketing calendar? Is it right for you to participate in each festival throughout the year or is focusing on one or two events a better plan? Where and when should your marketing team spend most of its energy and resources? These are all questions that demand a close analysis of goals and a thorough review of past sales and customer data.

Pricing and promotions to target the prudent consumer: With the consumer becoming increasingly savvy as well as more conservative given the economic backdrop, there is a need for retailers to think about their pricing and promotional strategy throughout the year. How should brands utilize the exposure around discount festivals to engage the more conservative shopper? How does this impact the overall pricing strategy throughout the year and how can one increase overall profitability in the light of this trend? These are not only questions for the merchandisers but an overall strategic question that retailers must tackle given the new economic backdrop.