On October 25, Bain released the report "2022 "Double Eleven": Customer Loyalty is More Worth Pursuing than Trillion Sales". As the world's largest shopping carnival feast, the transaction volume of for the "Double Eleven" Shopping Festival this year is expected to exceed the 1 trillion yuan mark. At the same time, the report pointed out that with the launch of more and more e-commerce retail shopping festivals and live e-commerce shopping festivals, competition is gradually intensifying. Retailers need to find a balance between short-term promotions and long-term high-quality growth, focus on loyalty, and establish sustainable and valuable differentiated advantages for enterprises.
With the launch of more and more e-commerce retail shopping festivals and live e-commerce shopping festivals, competition has gradually intensified. Liu Yang (Global Partner and Chairman of Greater China retail business, Kelly (Kelly), global partner of Bain Company and chairman of retail business in Greater China) Liu) said: "Although affected by changes in consumer behavior, the new crown epidemic and the global economic pattern, Double Eleven still plays a significant role for Chinese retailers. The two major shopping events of Double Eleven and 618 contributed a total of about 12% of China's online retail sales in 2021. However, compared with chasing low-priced discounts, customer loyalty is becoming the core driving force for consumers to participate in these shopping festivals."
Among the respondents who participated in last year's "Double Eleven" and intend to continue participating this year, 34% of consumers plan to reduce total online and offline spending during this year's "Double Eleven" period; only 24% of respondents said they would increase consumer spending.
In order to more comprehensively observe the "Double Eleven" trend, Bain conducted a survey of nearly 3,000 consumers from different cities in China. The survey shows that as retailers pay more and more attention to customer loyalty and long-term interaction with customers, the 2022 "Double Eleven" single is expected to decline compared with previous years in terms of consumer participation. In addition, consumers' shopping platform choices are becoming increasingly diversified. In 2021, 56% of respondents said they planned to shop on three or more platforms during the "Double Eleven" period, and this proportion rose to 69% this year. At the same time, 37% of respondents said they plan to go to 5 or more platforms to shop this year. This shows that many consumers believe that the "Double Eleven" discounts of different retailers are similar and do not have to be loyal to one. In the past, consumers in low-tier cities were the main force in promoting the growth of GMV on "Double Eleven", but among the respondents who were preparing to participate in this year's "Double Eleven" in low-tier cities this year, only 8% were new customers who had never participated in "Double Eleven", lower than the 12% in 2021.
37% of respondents said they plan to go to 5 or more platforms to shop this year. James Yang, global partner of Bain, said: "As Double Eleven shopping festival enters its 14th year, Chinese retailers are facing new challenges and double pressure from the external environment. In this regard, retailers should re-examine their strategies and adjust their focus from past discount promotions to cultivating and deepening customer loyalty, so as to maintain good consumer activity throughout the year, rather than just relying on Double Eleven." In the
report, Bain focused on analyzing and studying five retailers with higher NPS (net recommendation value ℠, an indicator for measuring customer loyalty) scores in the Chinese market. Consumers who recommend these retailers (i.e. consumers who score retailers’ NPS scores of 9 or 10) will pay more attention to product quality, product type and membership plans when evaluating, and their attention to price is lower than average. With the continuous popularization of loyalty indicators such as NPS and the slowdown in GMV growth, this year's "Double Eleven" will continue the trend last year. Retail companies have the opportunity to use customer loyalty as an indicator of success, use shopping festivals to build differentiated value propositions, and create an excellent omni-channel shopping experience.
It is understood that online retailers with leading customer loyalty are most respected in terms of product authenticity, richness and non-price elements.
Bain Company Global Deputy Partner Ralph Wu said: "When formulating the Double Eleven strategy, retailers need to change their thinking and transform the indicators of success from simple consumption to customer loyalty, making Double Eleven an important part of consumers' annual and omni-channel shopping experience."
Bain suggests that retailers may wish to think about the following three sets of questions to strengthen and deepen the customer loyalty strategy.
How to reposition the role of the shopping festival? What is the promotion strategy and which festivals are most suitable for? How to measure the effectiveness of promotions? How can promotions align with long-term, high-quality growth goals? How can
further highlight the differentiated value proposition? Who is the target customer of ? How to measure customer loyalty and high-quality growth? Among the differentiated competitive advantages that have been established so far, which ones have nothing to do with price? Can investment in customer loyalty generate higher profit ? How to provide an excellent omni-channel shopping experience with
? How to better integrate online and offline products and services? Can establishing cooperation bring a qualitative leap to omni-channel goods and services?
For Chinese retailers, "Double Eleven" still plays an important role. However, as the maturity of events continues to increase, Double Eleven is more a part of a larger strategy to help retailers deepen their interactions with consumers on various platforms at all stages of the year.
Interview and writing: Nandu reporter Zheng Haihong
