The fourth quarter is the most lucrative time of the year for most retailers and brands – both online and offline – with a multitude of shopping festivals, deals and promotions leading up to the end of the year. We've asked our ecommerce and marketplace experts around the world for their predictions for Q4 peak sales.
Last year peak sales patterns and trends were quite disrupted in various markets due to most stores being closed, and whilst sales over peak this year may not beat 2020 figures in all markets, we still expect to see a huge uplift in numbers, both in-store and online, with big shopping festivals such as Black Friday (White Friday in the Middle East) and Cyber Monday, as well as Singles’ Day in China being a huge driver.
For brands preparing their trading strategy, Pattern’s General Manager, Germany Torsten Schafer, suggested that brands steer away from using last year’s trading figures as a benchmark for predicting demand this holiday season.
What will the biggest sales peak in 2021?
We asked Pattern’s senior leadership team what their predictions for Q4 sales peak 2021 were, and specifically for the biggest day in terms of revenue. For the Middle East, USA and Australia, Black Friday and Cyber Weekend is expected to see the largest peak in sales, especially online, whilst in China and Europe, Singles’ Day, and December respectively, will see the largest peak.
Pattern’s General Manager for Australia Merline McGregor commented: “We’ve seen an increase in online shoppers in the past 12 months thanks to COVID-19 and store closures - 59% of sessions being new. In addition to this, August 2021 saw our biggest tracked revenue month in our Benchmark Report’s history, with revenue exceeding November 2020 (the previous record holder) by 21%. This was primarily due to New South Wales and Victoria being in lockdown. If this trend continues, we’ll likely continue to see some record-breaking months ahead.”
She added: “Despite most physical retail likely to be back open by this point, I’d assume there will continue to be some hesitation around crowded shopping centres and so consumers will continue to shop online.”
Pattern's USA Director of Marketplaces George Hatch agreed that COVID variants will limit brick-and-mortar sales and some retailers will shift to being closed over the Thanksgiving holiday weekend, as Walmart is planning to be. However, Black Friday will still likely be the highest revenue day for ecommerce.
George Hatch also predicted that “this holiday season we expect to see deals spread out rather than crammed into a single day. Black Friday and Cyber Monday will surely see the lion's share of discounts and promotions, but shoppers can expect to see deals throughout the Thanksgiving weekend and well into December, and likewise retailers should anticipate a big lift over Turkey 5 – the 5 days between Thanksgiving and Cyber Weekend. We saw this trend in 2020 as the Sunday of Thanksgiving weekend saw the highest YoY growth at 113%.”
Meanwhile, General Manager MENA David Quaife predicted the White/Black Friday weekend will also see the most sales in the UAE and Saudi Arabia: “White Friday will be, and has always been, the biggest online selling period. Typically, online retailers should expect to see 3.5x increase in sales in November vs October - this may vary between pureplay and omnichannel retailers.” In the past year or two, the Middle Eastern ecommerce market has experienced sharp growth which is why he expects to see a very strong performance for the big online players this year.
Additionally, the delayed Expo 2020 Dubai will commence in October 2021 and run through to end of March 2022. The footfall to this event will provide a major boost to retail sectors with many visitors expected from outside countries such as Europe and the USA. David stated it would be interesting to see if any of these customers place online orders with Amazon.ae during their stay.
In Latin America, though Black Friday and Cyber Monday are still large festivals, Buen Fin which takes place earlier in November, usually kick starts the shopping season in Mexico. George Hatch advised: “Brands need to be ready by the time Buen Fin rolls around to not miss out on capturing the entirety of Mexico's shopping season. Last year, the event raked in US$11.9 billion in total revenue for both brick-and-mortar and ecommerce.”
In Europe, Torsten predicted: “This year, the biggest days for online sales could be as late as Sunday 19th and Monday 20th December, because of when Christmas falls.” Furthermore, he stated “last year was an exceptionally strong Q4 online because of store closures, and so retailers may not achieve year-on-year sales increases online. However, they should see growth on their 2019 holiday sales – maybe as much as 25% to 50% growth on their sales two years ago if they are running an established online shop and if they have acquired new customers in 2020 who have become more confident buying online.”
In China, Singles’ Day is the biggest 24-hour online shopping festival in the world and is expected to continue being so. Pattern’s General Manager Asia, Arthur Cheung predicted: “Tmall will release the best offers seen throughout the year. However, the sales volume will be so large that it will heavily impact the speed of the fulfilment. It could take a month for an order to arrive to the customer, which is not very common in China where delivery times are usually within 2-3 days.”
And it’s not just in China where we expect to see issues with delays in fulfilment processes. Pattern’s leadership team in Europe, the USA and China expect that retailers and brands will focus their efforts on trying to spread out sales peaks and promotions so their warehouses and delivery infrastructure can cope.
The impact on delivery delays, fulfilment processes and logistics
In Europe, typically Black Friday and Cyber Monday sales have been spread out over the week leading up to the shopping event and the whole week of Cyber Monday - a trend that Torsten predicted will continue. He also added: “This is a combination of retailers trying to attract spend before their competitors and retailers spreading out the peak so that their fulfilment operations can cope with the spike in demand. Last year, Amazon ran Prime Day in mid-October, but it has already taken place this year, so discounting and promotions are likely to be more focused on the Black Friday and Cyber Monday weekend, with retailers trying to maintain full price sales prior to that.”
Whilst in Europe and the Middle East, delivery delays are not expected to be such an issue, there could be real issues in other regions. In the USA, Amazon has been working to improve its logistics capabilities by relying less on UPS and USPS, but George still anticipates that many products will not arrive in time for Christmas if they are bought after early to mid-December.
Similarly in Australia, it has already been advised that consumers can expect lengthy delivery delays leading up to Christmas. Therefore, Merline predicted that the majority of consumers will aim to get most of their Christmas shopping completed by Cyber Weekend, hence why she believes Black Friday will be the strongest day on the 2021 trading calendar.
How retailers can cope with excess stock issues
Lastly, in Australia and the UAE, it is expected that retailers will have lots of stock to discount that they haven’t been able to sell while stores were closed. They will likely try and discount online to get rid of product over the Black/White Friday and Cyber Monday weekend.
David expects to see a very big push from these businesses to clear a lot of that aged inventory in the month of November with deep discounts, which may then result in a big swing to online channels. Merline also mentioned that some retailers who are eager to clear stock will offer significant promotions. However, others in Australia have consistently faced stock shortages and logistics delays during 2021 and will not want to discount stock so close to the Christmas period.
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