Tag Archives: consumer behavior

World’s Largest Online Retail Shopping Event: 11/11 Singles Day

Once again the world’s biggest shopping event has occurred. And, no, it’s not Black Friday and Cyber Monday in the U.S. By far, the biggest shopping day of the year was on November 11, Singles’ Day, in China. (The holiday originally began in 1993 as a celebration for people who are single, chosen because of the connection between singles and the number ‘1’. November 11 now serves as an occasion for single people to party – and shop!)

This year, sales reached more than $8.6 billion in the first hour and passed 2016’s total sales by noon! By the end of the day the gross merchandise value tally was more than $25.3 billion, an increase of 39% from 2016 sales! Even more impressive though is that a whopping 90% of sales were completed from mobile devices (compared to 82% in 2016). At its peak, Alipay processed 256,000 transactions per second.

Singles’ Day is by far the largest shopping and entertainment festival in the world. Consider that it is 18 times bigger than Amazon Prime Day, and 2.5 times bigger than Black Friday and Cyber Monday combined. This year there were more than 15 million products from 140,000 top brands and companies. Top countries selling to China included Japan, U.S., Australia, Germany, and South Korea.

Singles’ Day has become an event on its own, including celebrities, fashion shows, TV galas, virtual reality, and augmented reality shopping. Companies engaged in a “Catch the Cat” augmented-reality game that engaged customers and offered discounts. There were other games as well, including an interactive trivia game on Tmall and Taobao apps. In addition, Alibaba offered viewers a televised gala that featured international stars including Pharrell Williams, Nicole Kidman, Jessie J, Maria Sharapova, LeBron James, and Zhang Ziyi.

Why is it so important for global brands to enter this shopping day? Consider that there are roughly 300 million middle-class shoppers in China, rising to an estimated 500 million in the next 10-15 years. While Singles Day may have originally started for lonely Chinese consumers, the shopping day now is seen as critical to driving China’s – and the world – economy.

If you are not familiar with Singles Day, there are a number of Web sources with information about the event and Alibaba, including the following:

Group Activities and Discussion Questions:

  1. Most students will not have previously heard of China’s Single Day. Discuss the shopping holiday and its importance in China.
  2. This is likely the first time students have heard about Singles Day. There are a number of videos that can help explain the event:
    1. What is 11/11?  https://youtu.be/bRv9qG75x2c
    2. Singles Day: https://youtu.be/uDDy50RP67A
    3. An American at Alibaba: https://youtu.be/7ZxM_HaEWBI
    4. News reports: https://youtu.be/gwGGrLpUkdg
    5. What is Alibaba: https://youtu.be/gk69hV6LEgI
  1. Discuss how this holiday compares to Black Friday and Cyber Monday in the U.S.
  2. How should U.S.-based companies participate in Singles Day?

Source: Brandchannel.com (2017, Nov. 13). Alibaba’s 2017 11.11 global shopping festival passes $25B.

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iPhone X – Premium Pricing

Apple introduced not just one, but two new models of the iPhone this fall: iPhone 8 and iPhone X (ten). Sure, companies often introduce multiple new products at the same time, but rarely do they introduce products that are so similar in scope and use. Why did Apple introduce two models at the same time? Easy – two different models are for two different market segments.

At a price of $999 (64 GB) and $1,149 (256 GB), the iPhone X is Apple’s first premium level iPhone model. And, since it has leading-edge features unavailable on any other smartphone, it seems to be targeting the early adopters and tech enthusiasts who are not price sensitive.

What does the iPhone X have?

  • 8 inch screen takes up the entire face of the device
  • OLED display for thinner, brighter, viewing
  • Face ID infrared facial scanning

The strategy seems to be working. After only a few days of pre-ordering iPhone X online, delivery times are easily two months away.

Are you planning on buying one?

Group Activities and Discussion Questions:

  1. Pricing is usually a complex topic. Discuss the six steps for pricing (determining objectives, estimating demand, determining cost/profit relationships, select price level, set list price, and make adjustments).
  2. Discuss the various pricing models in class: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
  3. Show iPhone X: https://www.apple.com/iphone-x/
  4. Show CBS Video: https://youtu.be/haj5nV6Muhw
  5. For iPhone X product, divide students into groups and have each group work on any/all of the six steps.
  6. When setting the price level, assign each team a different model to use (demand-oriented, cost- oriented, etc.).
  7. Debrief the exercise. Compare the various pricing models and discuss advantages/disadvantages of each.

Source:  New York Times, CBS, other news sources

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Home Delivery – Inside of the Doorway

Consumers are used to ordering goods online and then having packages waiting on the doorstep when they get home. It’s convenient, but sometimes it’s messy when packages are exposed to rain or snow, or when the neighbor dog plays hide-and-seek with the package, or if someone targets the house for a convenient theft while we’re at work. Sure, we can ask the neighbor to keep an eye out, but what if the neighbor isn’t home, or misses the action? While the costs of package theft has not been measured, one can assume the expense of stolen packages adds up for the shippers – and for the buyers.

Ecommerce companies have been working on solutions. Jet.com (owned by Walmart) is using a smart lock made by Latch to provide one-time home entry by using a code. And now Amazon has gotten into the game with Amazon Key – a $250 service that includes a smart camera made by Amazon coupled with a smart door lock made by Yale or Kwikset.

When the delivery arrives, the lock verifies that the driver is at the correct address and at the correct time. Amazon Key then starts recording video, unlocks the door, and records the entire delivery. It can even grant access to the home to other services such as Merry Maids (housecleaning) and Rover.com (dog walking).

Amazon key is currently available in 37 cities and is open to Prime members (who already pay $99/year for fast shipping and other services).

What will you have delivered?

Group Activities and Discussion Questions:

  1. Discuss some of the problems that consumers have with delivery of packages.
  2. Show links and videos of Amazon Key:

Link: https://www.amazon.com/b?&node=17285120011&ref_=pe_3455630_258731250_em_ecg_bor_bs_ann_func

Kit: https://www.amazon.com/Amazon-Key-Home-Kit-compatible/dp/B00KCYQGXE

  1. Also show Latch’s solution:

https://www.latch.com/

  1. How does this service benefit consumers?
  2. Poll students: Would they use this service for deliveries? Why or why not?
  3. How should these services be marketed? Who is the ideal customer?

 

Source: New York Times, Wall Street Journal, other news sources

 

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