It’s hard to argue that e-commerce is on the rise right now. According to Google.Market Analytics and Data Insight, the audience of online trading in Russia grew by 40% from January to April, that is, the market added 10-15 million active online shoppers to the current 30 million.
The main impetus for growth was given by the pandemic and the self-isolation regime. Russians have begun to spend more time on the Internet, they have developed new online habits, for example, to regularly buy from the Internet. And not only equipment, but also consumer goods: food, household chemicals, food for pets. According to orders on Google.Market, in the spring, Russians actively bought goods for organizing a home workplace, sports equipment, goods for haircuts and manicure, and much more. This is due to the transition to remote work and the closure of beauty salons with fitness clubs.
According to research by Google.Market and GfK Rus, against the backdrop of the pandemic, Russians also began to make more online orders in the categories “Products”, “Products for babies”, “Children’s shoes and clothes”. As expected, the coverage of cross-border trade decreased: the share of those who bought only in Russian online stores increased over the year from 21% to 32%.
Buyer Behavior on Sale
One of the main retail occasions of the year is ahead – Black Friday. 97% of online shoppers in Russia know about it. More than a third of them bought something during this particular sale. Why are the words “sale”, ” regatta discount code” and “promotion” so effective for buyers? Why, in a hurry, they sometimes do not even have time to see what size of clothes they put in the basket, just to buy it now and at such a bargain price?
There is a stereotype that women buy more and more in stores, including online. However, according to a survey by Google.Market and GfK Rus, it turned out that men are willing to spend more than women. They also want to be sure of the originality of the purchased product. Women turned out to be more practical: they are worried about the date of receipt of the order and whether the size of the clothes suits them. In general, in online shopping, Russians most of all value free shipping, a discount on goods, including with a promotional code, and the ability to receive cashback on a bank card.
However, when November and December roll around – the main selling months of the year – many buyers are less rational.
In sales, the principle of limitation often operates: by time or by the amount of goods available on sale. Time limitation of the discount stimulates the fear of lost profits in consumers. This is why the one-day sale is causing such a stir. In addition, the potential buyer is more likely to be interested in the product that other users are viewing or have already bought – this is social proof that works like a crowd near the shelf in a store.
Are store sales profitable? Sure. With promotions and discounts, they can stimulate the demand for goods that are usually bought for future use, for example, cosmetics or household chemicals. Also, with the help of sales, they can encourage users to try a new brand or buy a product at a higher price.
At the same time, online stores, unlike traditional ones, have more opportunities during sales to retain and attract customers: different communication options (push notifications, email newsletters), gamification, bonuses and discounts for future purchases, discounts for Referred friend by referral link.
However, those stores that abuse sales, promotions, and liquidations make themselves worse: users get used to discounts and are no longer ready to buy without them. Those stores that deliberately inflate prices before sales in order to make artificial discounts later ruin their reputation.