As the world's largest shopping festival, c, also known as Singles Day, gears up for its 15th year, industry experts anticipate a heightened focus on low-pricing strategies by major e-commerce players.
This is mainly in response to a slowing economy and increasing competition from newer companies such as Pinduoduo and Douyin, according to Xiaofeng Wang, Principal Analyst at Forrester. She explains: "The thrill of Double 11 lies in deep discounts and low prices... Alibaba and JD.com will refocus their Double 11 strategies on low prices this year. The low-price strategy shows that big players are under pressure."
However, Wang asserts that this will not devolve into a simple price war. Instead, these price strategies will be backed by efforts to increase work efficiency and lower operational costs using technological advancements. She highlights the role of generative Artificial Intelligence (genAI), stating that "E-commerce players are keen to showcase their generative AI capabilities on Double 11."
Wang lists a few ways in which genAI will be put to use for the occasion. Firstly, it can enhance the efficiency of content creation, including copy, images, and videos. Additionally, it enables virtual hosts, which lowers costs and minimises the risk of issues such as celebrity scandals. JD.com's Yanxi virtual host, for instance, contributed to a 246% increase in merchant transaction volumes at the June 18 shopping gala compared to last year's Singles Day promotion. Lastly, genAI can power advanced chatbots to provide shoppers with precise product recommendations, improving the overall shopping experience.
While looking at the broader holiday shopping season, Dipanjan Chatterjee, VP and Principal Analyst at Forrester, identifies a few interesting trends relating to consumer spending patterns. He states that despite economic uncertainties, consumers are prepared to part with their money, with only 22% indicating they would have less to spend this holiday season compared to last year. Yet online shoppers, comprising over half (57% according to Forrester data), will be on the hunt for more deals online, which will see an increase in targeted price promotions in the digital sphere.
Chatterjee says: "Underneath the facade of anxiety is an economically sound consumer ready to spend. The fog of economic uncertainty will not stymie spend, according to Forrester data, only 22% say that they have less money to spend this year than last."
"Price promotions will be targeted more surgically toward specific segments and channels. For example, they will be more prevalent on digital formats since more online shoppers, according to Forrester data, are looking for deals (57% for online versus 36% for offline shoppers)."
Chatterjee also highlights the growing importance of sustainability during this notoriously excessive season: "During a season notorious for excess and waste, sustainability and environmental stewardship will be salient for many brands and consumers."
"There is a broader expectation that brands acknowledge and address the environmental elephant at the holiday party," says Chatterjee.