Boxing Day has traditionally been the largest sales day in Australia. However this has been shaken up with the arrival of an American tradition. I’m talking about Black Friday and Cyber Monday.
As the dust settles from last weekend’s sales event and the holiday shopping season officially kicks off for retailers, let’s have a look at both holidays. What are they, how did they originate and how did they compared this year?
Black Friday and Cyber Monday
With the tremendous growth in online sales here in Australia over the past few years, so too have we seen growth in both Black Friday and Cyber Monday sales. Taking place on the Friday following Thanksgiving, Black Friday is traditionally the biggest shopping day of the year in the United States. And now it’s well and truely arrived in Australia.
But what is it?
Nobody is quite sure exactly how the event started. One theory suggests that the term gained popularity in 1950’s after workers began to call in sick post-Thanksgiving Day, thereby getting a four-day long holiday. Frustrated, many businesses started adding the day as another paid holiday. Some even believed the term “Black Friday’ originated in the 19th century, when plantation owners would engage in the buying and selling of black slaves at discounted rates on the day after Thanksgiving (although this has since been disproven).
However it is generally believed that the term originated from Philadelphia. Police introduced the term in the 1960s to describe the chaotic traffic in the city ahead of an annual Thanksgiving football game. Crowds of families would descend on the city, crippling traffic. Shoplifters would also take advantage of the bedlam in stores.
However it wasn’t until the late 1980’s that the term took off nationally. Black Friday was reinvented and turned into something positive. The result was the “red to black” concept, and the notion that the day after Thanksgiving marked the occasion when America’s stores finally turned a profit.
The somewhat dated name ‘Cyber Monday’ means less now than it used to. Taking place on the Monday after Thanksgiving, Cyber Monday was first described in 2005 as the online equivalent of Black Friday – a way to encourage consumers to score deals on the web instead of physical bricks and mortar stores.
As a vast portion of commerce has moved online in the past decade and a half since, the distinction between Black Friday to Cyber Monday has blurred. Either way, the Black Friday / Cyber Monday weekend represents the kickoff of the US Christmas shopping season.
Whilst we don’t have the Australian sales figures from the weekend as of yet, according to Adobe Analytics, this year shoppers in the US spent $7.4 billion on Black Friday. US shoppers racked up an additional $9.4 billion in online sales for Cyber Monday, breaking all records and making it the largest online shopping day in the US.
Whilst this years and future Black Friday’s will continue to bring record sales for US e-commerce history, it pales in comparison to China’s largest shopping extravaganza, Singles Day. Even when the numbers for Black Friday and Cyber Monday are combined, they come nowhere close to the $38b spent during Alibaba’s singles day.
Singles’ began as an anti-Valentine’s Day when students at Nanjing University in the 1990’s started celebrating their singledom. It has since grown and been adopted by e-commerce giant Alibaba (China’s equivalent of Amazon) in 2009.
With all the talk locally about Black Friday and Cyber Monday, it’s easy to forget about the scale and size of Singles Day. Singles Day is huge. Alibaba claim they sold as much in five minutes as Amazon sold across their entire Prime Day (although there have been some rumours that this number has been inflated).
And although Amazon may have a higher market capitalisation than Alibaba, when it comes to the amount of business transacted it is dwarfed into insignificance. This is important because this means that Alibaba is gathering more consumer data. This could eventually help make Alibaba a better shopping experience than Amazon.
In the last few years, we have seen Alibaba really start to embrace the value of algorithms and the data it is collecting. An example of this is Alibaba’s customer service chatbot “Alime Shop Assistant” (backed by Alibaba’s machine learning technology). This year, it handled 97 percent of all online customer inquiries. By contrast Amazon’s algorithms remain basic at best, often showing advertisements and suggestions for products that already have been purchased.
The net result, is that in the long-term Alibaba may become better at e-commerce than Amazon. Whether this makes Alibaba capable of challenging Amazon in the US remains to be seen, but it does raise the possibility of Alibaba giving Amazon a real run for it’s money elsewhere when it comes to overseas expansion.