tag:econsultancy.com,2008:/topics/ecommerce Latest Ecommerce content from Econsultancy 2018-06-19T11:33:28+01:00 tag:econsultancy.com,2008:BlogPost/70103 2018-06-19T11:33:28+01:00 2018-06-19T11:33:28+01:00 How product-led digital advertising is evolving Oren Stern <p>There are a number of categories of product ad that have benefited (each of which continues to grow):</p> <ul> <li>Some traditional keyword-focused search ads fall within the description of product-led advertising </li> <li>Google Shopping - Product Listing Ads that display product images and descriptions against relevant searches </li> <li>Retargeted social ads such as Facebook dynamic ads that target consumers with products and offers based on their browsing history </li> </ul> <p>The newest category is <a href="https://econsultancy.com/blog/69921-how-to-optimise-your-amazon-product-ad-campaigns/">product-led advertising on ecommerce sites</a>.</p> <p>For example, brands are showing increasing interest in <a href="https://econsultancy.com/blog/70006-how-amazon-retailers-can-use-search-social-ads-to-improve-customer-engagement/">search ads on Amazon</a> with spend on these ads growing nearly 3x between the 3rd quarter of 2017 and the first quarter of 2018 according to Kenshoo data. It even rose 16% between Q4 2017 and Q1 2018 – despite the fact that online ad spend traditionally peaks in Q4 due to the holiday shopping season when consumer retail spending is at its highest.</p> <p>What’s also interesting about ecommerce marketing such as this is that it appears to no longer be just about generating online sales. It’s starting to become a branding and awareness exercise.</p> <p>For example when eMarketer <a href="https://retail.emarketer.com/article/how-cpg-brands-inserting-themselves-customer-journey/5a67a975ebd40008bc791213">analysed</a> data for the CPG sector it found that:</p> <blockquote> <p>The overwhelming majority of CPG sales are still done in-store. But consumers are increasingly engaging with these products online, and searches often lead to ecommerce platforms. The most forward-thinking brand managers are now viewing ecommerce as one more marketing channel.</p> </blockquote> <p>At Kenshoo we see brands aiming higher up the funnel on Amazon, using product-focused ads more for brand awareness and competitive positioning. This is still done in the context of a performance advertising program, but with the understanding that more and more consumers spend their online shopping time on Amazon. </p> <p><img src="https://assets.econsultancy.com/images/0009/3359/sponsored_product_ad.png" alt="sponsored product ad amazon" width="615"></p> <p><em>Sponsored product ad on Amazon</em></p> <p>When brands want to better engage or win over competitive mindshare they spend more of their budgets on Amazon. We now see a two peak shopping behaviour, where more of customer discovery is done on Amazon - sometimes weeks ahead of the actual shopping decision, which might actually be in-store. </p> <p>This means that brands are now more keen to understand branding, market share and other directional growth metrics that may fall outside of traditional performance measurement, especially as it relates to the massive ecommerce channel opportunities like Amazon.   </p> <p>Building a broader strategy that may include pulling brand spend into the mix - where traditionally trade spend and co-op budgets ruled - requires that marketing leaders have a more holistic approach to measurement. They need a clearer understanding of a channel's relative performance - by product - compared to other digital product ad channels, and wider data sets to drive campaign decisions beyond the basic clicks and conversions that are the traditional metrics for product-led marketing. </p> <p>When brand marketing comes into the mix, measurement standards may shift. Instead of only focusing on the channel’s profitability and spending within the margin, brand spend can open up the purse strings. On an important channel like Amazon, goals such as brand-building and increasing market share can encourage marketers to really attack a category. Where previously the investment in product ads had been measured on pure Return on AdSpend (ROAS), now the advertiser may be tasked with tracking market share or category share, by product.</p> <p>Typically brand studies, <a href="https://marketingland.com/using-conversion-lift-reporting-best-practices-171361">lift tests</a> and other more scientific measurement strategies for brand marketing spend are not easily accomplished on Amazon, but data available through Amazon Retail Analytics Premium and some third party data providers (which many large brands already leverage, just not on their advertising decisions) can help provide a better data set for triangulating the efficacy of investment in Amazon advertising ‘beyond ROAS’.  </p> <p>As well as, seeking out stronger digital retail signals and competitive intelligence, advertising team, need access to effective product-centric marketing automation software that allows them to take meaningful action using these insights.</p> <p>The brands that win with this new breed of product-led advertising on ecommerce platforms will be the ones that can find the right balance between pure performance marketing and branding, richer data for decision making and technologies for scale and optimisation, together with a product-centric view that encompasses an array of channels and waypoints in the customer journey.  </p> <p><a href="https://econsultancy.com/training/courses/programmatic"><img src="https://assets.econsultancy.com/images/0009/5470/Programmatic_training.jpg" alt="programmatic training course" width="615"></a></p> tag:econsultancy.com,2008:BlogPost/70099 2018-06-18T11:37:02+01:00 2018-06-18T11:37:02+01:00 A day in the life of... head of ecommerce at a fine art retailer Ben Davis <p><em>(P.S. Don't forget </em><em>to check out the <a href="https://jobs.econsultancy.com/?cmpid=EconBlog">Econsultancy jobs board</a> if you're looking for a new role yourself.)</em></p> <h4> <em>Econsultancy:</em> Please describe your job. What do you do?</h4> <p><em><strong>Matt Lamb:</strong></em> <a href="https://www.castlegalleries.com">Castle Galleries</a> is a fine art retailer and sells original artwork and limited edition prints by a range of leading artists, from big names such as Ronnie Wood and Bob Dylan to home grown British talent scouted by our publisher, Washington Green. </p> <p>As head of ecommerce I manage a team of art consultants who handle enquiries through our website. We offer a mixture of sales and customer service, and advise clients on our portfolio of artwork to help them decide on the right piece for them. I also set the pipeline of work for ongoing improvements to our website which is run through an agency, as well as our PPC and email marketing campaigns.</p> <h4> <em>E:</em> Whereabouts do you sit within the organisation? Who do you report to?</h4> <p><em><strong>ML:</strong></em> I lead the entire ecommerce operation for the company and report to our sales director. </p> <h4> <em>E: </em>What kind of skills do you need to be effective in your role?</h4> <p><em><strong>ML: </strong></em>Technology and customer expectations change quickly in online retail, and this means I need to constantly be looking at all our activities and thinking about how we can improve our offering. I think to do well in ecommerce you need to be excited by change, up for trying something new and you can’t be frightened to get it wrong occasionally.</p> <h4> <em>E: </em>Tell us about a typical working day… </h4> <p><em><strong>ML: </strong></em>It’s cliché but no day is ever the same. Right now we’re in the process of building a new website, so I’m spending more time than ever researching industry trends and best practice to keep us ahead of the curve. I’m analysing browser feedback and digging into our data to make sure we retain the best features of our existing site while making it even more engaging and interactive. </p> <p><img src="https://assets.econsultancy.com/images/0009/5426/Matt_Lamb_DITL.png" alt="matt lamb" width="615" height="308"></p> <h4> <em>E: </em>What do you love about your job? What sucks?</h4> <p><em><strong>ML: </strong></em>Ecommerce can be really dry and data driven, but with sales and customer service being such a big part of our offering, there’s always a buzz in the office and lots of conversations taking place with clients. We have such a great selection of artwork on offer, I defy anyone to look through our collection and not find something they like. That enjoyment of the artwork is infectious. Saying that, we’re the only sales team in the company based in an office. Whilst I try to get out into our galleries as often as I can, it’s hard not to be envious of my colleagues’ work environment.</p> <h4> <em>E: </em>What kind of goals do you have? What are the most useful metrics and KPIs for measuring success? </h4> <p><em><strong>ML: </strong></em>The sky’s the limit! Art retailers have been slow to take to ecommerce and the real winners have been the artists taking advantage of the platform social media offers, and dealing directly with collectors. My early goals were as simple as making ecommerce a credible part of our business. Now my focus is our international offering, particularly the US market.</p> <p>As a luxury retailer with a high price point, it’s tricky to derive value looking at KPIs such as conversion rates in the same way most online retailers will. A typical artwork will only sell one or two copies online before the limited edition run sells out, so we focus on campaigns and marketing activities that generate enquiries and meaningful conversations with clients rather than basket conversion.</p> <p>Ultimately we’re driven by turnover, but on a campaign to campaign basis I’m interested in engaging a client enough to prompt them to contact us.</p> <h4> <em>E: </em>What are your favourite tools to help you to get the job done?</h4> <p><em><strong>ML: </strong></em>There’s a lot of value in search data, not only to make website search functions more relevant for browsers but to see what people are looking for, and the words browsers use to find what they’re after.</p> <p>We use Algolia as our in-built search function. It’s great value and pretty powerful for reporting and search manipulation, but there are plenty of other affordable search tools out there. We can very quickly identify which artists and titles are popular by looking at search data, and it helps us to understand how browsers discover artwork. For example, most browsers know the artist they’re looking for - we rarely see people searching terms like ‘landscape painting’.</p> <h4> <em>E: </em>How did you land in this role, and where might you go from here?</h4> <p><em><strong>ML: </strong></em>My application was a bit of a punt - I was pleasantly surprised when I was offered the job! I’d previously helped run a boutique ski helmet business that only sold online so I was a bit of a Jack of all trades, and this appealed to the team at Castle Galleries.</p> <p>My team is the fastest growing team in the company so there’s plenty here to keep us busy. If I ever did move on from Castle Galleries I can’t imagine working for another art retailer.</p> <h4> <em>E: </em>Who is doing ecommerce well? Who is doing UX well in the art world?</h4> <p><em><strong>ML: </strong></em>Saatchi Art is a great website - it does product discovery really well. You can land on their homepage with no idea what you’re after and they’ve made it so easy for you to filter and navigate through their collection. </p> <h4> <em>E: </em>Do you have any advice for people who want to work in digital in the world of fine art?</h4> <p><em><strong>ML: </strong></em>It’s great to work in the art world. People buy art because they love it, so being part of that is good fun. Don’t stress about having a deep knowledge of art history, as long as you’re passionate about what you do you can learn the rest.</p> <p><em><strong>Want to be appear in our 'Day in the Life' feature? <a href="mailto:ben.davis@econsultancy.com">Get in touch with our editor</a>.</strong></em></p> tag:econsultancy.com,2008:BlogPost/70098 2018-06-15T15:09:22+01:00 2018-06-15T15:09:22+01:00 The best digital marketing stats we've seen this week Ben Davis <h4>WPP revenue down 3.4% for Jan-April</h4> <p>The figures (revenue at $6.43bn) were revealed ahead of the first AGM since the departure of chief executive Sir Martin Sorrell.</p> <h4>The state of digital news</h4> <p style="font-weight: normal;">The <a href="http://www.digitalnewsreport.org">Reuters Institute Digital News Report 2018</a> has been released. The YouGov survey of 74,000 people in 37 countries has some really interesting findings. Here are my favourites...</p> <p style="font-weight: normal;">The use of social media for news has started to fall in a number of key markets after years of continuous growth. Usage is down six percentage points in the United States, and is also down in the UK and France.</p> <p style="font-weight: normal;"><img src="https://assets.econsultancy.com/images/0009/5394/social_as_source_of_news.png" alt="use of social for news" width="615"></p> <p style="font-weight: normal;">This decline in social for news is almost entirely down to decline in Facebook usage for news consumption.</p> <p style="font-weight: normal;"><img src="https://assets.econsultancy.com/images/0009/5396/each_social_network_as_news_source.png" alt="social networks for news" width="615"></p> <p style="font-weight: normal;">The chart below shows the impact on Facebook referrals to news websites.</p> <p style="font-weight: normal;"><img src="https://assets.econsultancy.com/images/0009/5395/news_referrals_from_facebook.png" alt="Facebook referrals to news" width="615"></p> <p style="font-weight: normal;">There is an ongoing rise in the use of messaging apps for news. WhatsApp is now used for news by around half of online users in Malaysia (54%) and Brazil (48%), for example.</p> <p style="font-weight: normal;">Politics is still impacting news and digital news, with last year’s 'Trump Bump' for news subscription in the US has been maintained.</p> <p style="font-weight: normal;">And finally, growth in ad-blocking software is on the increase again, thanks to privacy concerns. More than a quarter now block ads (27%) globally, from 42% in Greece to 13% in South Korea.</p> <h4>Paid social the most popular for of online advertising?</h4> <p>Marin's State of Digital Advertising 2018 report has revealed that paid social is the most popular form of digital advertising. Nine out of 10 respondents said they are investing in paid social media in 2018.</p> <p>What's more, advertisers allocate more digital marketing budget to paid social (30%) than any other paid media channel, with search coming in second with 26% of the budget.</p> <h4>98% of UK marketers admit some of their work is repetitive</h4> <p>That's according to Wrike's Digital Work Report 2018. 25% of survey respondents say that between 61-80% of their work is 'cognitively routine'.</p> <p>Despite these stats, only 33% of marketers say they are considering automation, with 34% saying "they do not believe it would give their company a competitive edge."</p> <p>Interestingly, 27% said they felt work is done across too many systems, creating duplication of work and communications, for example.</p> <p>So, what would marketers spend their extra time on, once automation takes away reptitive tasks? The respondents replied:</p> <ul> <li>focus more on creative work (32%)</li> <li>team management (26%)</li> <li>developing strategic projects (21%)</li> <li>listening to customers (20%)</li> <li>and creating a better work culture in the office (19%)</li> </ul> <p><strong>One in four Brits (25%) believes a machine could do their job now</strong></p> <p>An interesting counterpart to that Wrike automation study, global intelligence platform Streetbees has <a href="https://app.streetbees.com/pages/the-impact-of-ai">surveyed</a> 3,400 people worldwide on the impact of AI.</p> <p>25% of Brits and 37% of Americans believe a machine could do their job right now. That figure is nearly 60% in India and Nigeria.</p> <p><img src="https://assets.econsultancy.com/images/0009/5390/role_performed_by_AI_1.png" alt="role by ai" width="615"></p> <p>Strangely, a lower proportion of Americans (32%) agreed it is likely a machine could make their role redundant over the next 20 years.</p> <p><img src="https://assets.econsultancy.com/images/0009/5389/role_performed_by_AI.png" alt="role replaced by robot?" width="615"></p> <p>Industries seen most at risk of job losses because of AI and machines are manufacturing (53%), finance (43%) and IT (28%).</p> <p>Nearly four in 10 of respondents think AI should not be designed to do the jobs of humans (presumably they are unaware of its existing uses). Sadder still, one in three Brits worry robots will get too smart and take over the world.</p> <p><img src="https://assets.econsultancy.com/images/0009/5391/moral_of_AI.png" alt="morals of ai" width="615"></p> <h4>World Cup shows power of TV for live events</h4> <p>94% of those UK football fans watching the World Cup will do so on a TV, according to a study of media habits by growth marketing comapny DCMN.</p> <h4>A little fuzzy on World Cup sponsorship?</h4> <p>The same DCMN study shows that almost as many UK fans (19%) associate Nike with the event as they do with official sponsor Adidas (20%), even though Nike is not an official event partner.</p> <h4>Zara owner Inditex sees profit up after digital investment</h4> <p>Inditex has reported gross profit margin up to 58.9% from 58.2% in Q1. Sales grew by 2%.</p> <p>The biggest selling retailer in the world recently invested in Zara's <a href="https://www.econsultancy.com/blog/69960-how-zara-is-using-in-store-tech-to-improve-its-frustrating-shopper-experience">multichannel retail technology</a>. Online sales for Inditex increased 41% in the quarter.</p> <p><img src="https://assets.econsultancy.com/images/0009/3718/Zara_pop_up.JPG" alt="zara store" width="615"></p> tag:econsultancy.com,2008:BlogPost/70089 2018-06-13T15:37:00+01:00 2018-06-13T15:37:00+01:00 The digital transformation of Accent Group: A retail case study (part 3) Jeff Rajeck <p>This is the third and final part in this series (after <a href="https://econsultancy.com/blog/70087-the-digital-transformation-of-accent-group-a-retail-case-study-part-1/">one</a> and <a href="https://econsultancy.com/blog/70088-the-digital-transformation-of-accent-group-a-retail-case-study-part-2/">two</a>) and in it we discuss the group's ongoing digital transformation initiatives and the future of retail in a rapidly-changing and increasingly digital world.</p> <p>We've talked about franchisees, but I wanted to ask Teperson how much the group's global brands a part of this (predominantly Hype DC and Platypus) - do they have their own digital transformation going on?</p> <p>"About 6 months ago," said Teperson, "we built a digital hub or centre of excellence in Melbourne. It is a purpose-built facility that concentrates our digital expertise under one roof.  </p> <p>"The way that we run the business model here is that there are two different streams. The first one is the dedicated resources that sit at each of the brands, a Skechers ecommerce manager and a Platypus ecommerce manager, and they align completely with the business unit. So, they are part and parcel of the operational cadence of that business.</p> <p>"To complement that and leveraging the size and scale of the business, I introduced effectively a shared service layer which is where we bring in more senior and very competent resources in different specialties. So, performance marketing, digital marketing, project management, omnichannel managers and strategists. We support each of the businesses with a shared service, recruit the very best talent in the market and share those resources across the business where the individual business unit would not be able to afford them.</p> <p>"In a lot of instances, we would certainly look to follow and look to align to a global initiative and directive. Our brand partners have been fantastic and collaborative with us in working with us because they acknowledge that in some areas we are ahead of where they are and there are learnings to be had to them by enabling us to do it.</p> <p>"And so, that has created a wonderful opportunity for us to get closer to our brands, but also feel like we are giving some value back at the same time."</p> <h3>Marketplaces - are they right for the brand?</h3> <p>I asked Teperson about the Accent Group's relationship with marketplaces. He replied that they "actually are not participants in any marketplaces", and elaborated on why.</p> <p>"We are looking very closely at the space and I think for us it is just a matter of time - not if, but when - and how we decide to go about executing that.</p> <p>"I think that marketplaces are an important part of the new paradigm and certainly where you find and reach consumers especially new consumers. But the mechanics around that and the brand protection that you look for insofar as just making sure that your brand isn't the piñata of the marketplace - as a loss leader for the marketplace to attract customers to their brand.</p> <p>"We are still really sensitive and mindful about first and foremost wanting to create brilliant consumer experiences. Making sure that we are doing the right thing by the brand so that we have longevity in the market.</p> <p>"Our CEO, at the moment, is really focused on what is called 'lazy retailing'. In Australia, you can walk into a shopping centre 365 days a year and see sale and promotional signage up. Anyone can sell something when its discounted (i.e. ‘lazy retailing’), it's when you can sell things when they are not discounted that really speaks well for your brand.</p> <p>"And particularly in our younger and more fashion and trend related business, sales and promotion are often seen as things that aren't on trend or cool. Because if it is discounted then, clearly it can't be popular or on trend.</p> <p>"And so, there are really interesting nuances taking place. In the context of the marketplace, it is about giving us an opportunity to reach more customers without devaluing our brand through a price model that is really about a race to the bottom. That is inconsistent with our brand ethos."</p> <p><img src="https://assets.econsultancy.com/images/0009/5226/retail-digital-transformation-3-1.jpg" alt="" width="800" height="493"></p> <h3><strong>Driving growth</strong></h3> <p>When asked about the most important factor for driving growth, Teperson talks about making more of the inventory they already have.</p> <p>"I go back to all the things that we spoke about - click-and-collect - where we are taking demand that existed on the website and improving conversion and sales through supplying the product in that market.</p> <p>"What was wonderful about that was that we did that without investing a dime more in stock. We just plugged in inventory that we already owned. Omnichannel retailers really do have a competitive advantage if they just rethink how they flex their muscle.</p> <p>"And that has been the most profound change. So, it’s all the things that we have been able to execute because we are a physical retailer, because we have stores, because we own stock - that has given us the biggest increase and the biggest lift in sales.</p> <p>As opposed to a fantastic new merchandising tool – yes, those things give you efficiencies and drive improvement but not at the scale we have seen.</p> <p><strong>But is there any particular channel which drives the most revenue - digital, traditional?</strong></p> <p>"It is a combination of factors," remarks Teperson.</p> <p>"I think great retail will always remain those things. Everyone looks for the silver bullet, but I don't think it exists.  </p> <p>"A retailer is a conductor of a very complex symphony. All of the instruments have to be playing in order to make that music loud, emotive and connect with the audience.</p> <p>"I feel like because we are an omnichannel retailer we have more opportunities to influence that. As an example, if we were to have 40 million visits to our store in a 12-month period we will have a similar number coming to our digital assets.</p> <p>"You have twice as much opportunity as a pure play online merchant to reach customers, connect with them, and deliver those experiences.</p> <p>"It's not one single thing - it's about being mindful of all your assets."</p> <p><img src="https://assets.econsultancy.com/images/0009/5227/retail-digital-transformation-3-2.jpg" alt="" width="800" height="455"></p> <p>So, what about conversion rate optimization, does the group have an A/B testing lab? "Yes," says Teperson.</p> <p>"I think those things are table stakes. That is, they are mandatory to see improvement. We work with an external partner who is a specialist in this space. Working on A/B testing and site optimization.</p> <p>"We run a series of tests every month across of our assets. It's an important part of a strategy, but in today's market, it feels like that is the cost of entry.</p> <h3>The future of ecommerce</h3> <p>The big question for Teperson is what will the future look like. He is aware of profound changes to come...</p> <p>"There was a video which crept into my LinkedIn feed about Google's foray into AI and conversational commerce. If I think about that work we did around demographics and behaviours, what does the future look like?</p> <p>"It's quite possible that my children and grandchildren will never use a keyboard. Everything will be done by voice command.</p> <p>"So, when you think about commerce experiences at that level, that will bring profound change to the market. If you think about how powerful mobile has been in consumption - that didn't exist 10 years ago - and now it’s the most influential part of the consumer journey. I don't think we are going to need to wait 10 years for the next technology to make a dent on the market and I think voice and AI is one of those things.</p> <p>"I've watched with much interest over the last three years the maturation of AI, but now it is combined with voice and what that enables brands to do - namely create experiences for consumers.</p> <p>"Retail has always been about exciting the customer, creating an emotional connection and then removing friction points with consumers. So, if AI and voice go some way to being able to eliminate more friction points, it can only be a more powerful thing for retail.</p> <p>"What that means from a DT perspective is that we have come a long way, but we have a long way to go to make a seamless experience for consumers.</p> <p>"That's what keeps it interesting and that's what keeps me motivated."</p> <p><strong> </strong></p> <p><strong>This is part three in a series. Read parts <a href="https://econsultancy.com/blog/70087-the-digital-transformation-of-accent-group-a-retail-case-study-part-1/">one</a> and <a href="https://econsultancy.com/blog/70088-the-digital-transformation-of-accent-group-a-retail-case-study-part-2/">two</a>.</strong></p> <p><em><strong>If you are interested in how Econsultancy can help you with your own digital transformation journey, <a href="https://econsultancy.com/training/digital-transformation/">get in touch</a>.</strong></em></p> tag:econsultancy.com,2008:BlogPost/70086 2018-06-13T12:16:39+01:00 2018-06-13T12:16:39+01:00 What’s behind the success of China’s social commerce app Pinduoduo? Rebecca Sentance <p>At least, in the west. In China, it’s a slightly different story. The world’s largest ecommerce market is currently being disrupted by a fast-growing new app called Pinduoduo, which has discovered a highly successful recipe for making ecommerce social.</p> <p>Pinduoduo’s model, which combines low prices with group discounts that users can lock in by rounding up their friends on social media, has seen it quickly rise to the ranks of China’s top ecommerce companies, threatening ecommerce titans like JD.com and Alibaba.</p> <p>Despite being less than three years old, Pinduoduo already has more than 300 million users, is ranked by <a href="http://data.cmcm.com/rank">Cheetah Mobile</a> as the second-most popular ecommerce app in China (behind Taobao), and was valued at nearly $15 billion in a recent round of funding.</p> <p>So what is behind Pinduoduo’s incredible success as a social commerce app? Can it be sustained? And is it a unique phenomenon – or a model that others can follow?</p> <p><img src="https://assets.econsultancy.com/images/0009/5206/pinduoduo_ranking.png" alt="" width="650"></p> <p><em>Pinduoduo is ranked #2 in Cheetah Mobile's ranking of China's most popular ecommerce apps, second only to rival Taobao for penetration and weekly open rates.</em></p> <h3><strong>How Pinduoduo does social commerce</strong></h3> <p>Most social commerce ventures that we’ve seen so far in the west, in spite of their name, are geared towards individuals. The ‘social’ part comes from either integrating ecommerce features into an existing social network, such as by adding a ‘Buy’ button to Twitter, Facebook or Pinterest; or by fusing social and ecommerce features on a new platform.</p> <p>Pinduoduo, by contrast, has found a way to make commerce truly social. The app allows customers to lock in low-price deals by rounding up a certain number of their friends to purchase the same item.</p> <p>Pinduoduo integrates seamlessly with China’s most popular chat app, <a href="https://www.econsultancy.com/reports/understanding-wechat-an-overview-of-china-s-social-payment-and-messaging-giant">WeChat</a>, thanks to its “mini program” functionality, which allows users to open up other apps within the main app, using different programs without ever leaving WeChat.</p> <p>In this way, consumers can use WeChat to access Pinduoduo, and also to share product links with their friends, locking in deals and spreading the word about the app at the same time. These deals can involve discounts of up to 90%, as well as cashback incentives and even free products for loyal customers.</p> <p><img src="https://assets.econsultancy.com/images/0009/4994/pinduoduo_product_discovery.png" alt="Mary Meeker Pinduoduo" width="650"></p> <p><em>Mary Meeker's Internet Trends Report 2018 featured Pinduoduo as an example of 'socialising' product discovery, as users can refer their friends to reduce the price of products.</em></p> <p>For anyone who used Groupon in its early days, Pinduoduo’s model will sound familiar – and comparisons have often been drawn between the two. However, there are a couple of key differences between Groupon’s take on group purchases and Pinduoduo’s.</p> <p>Groupon’s vouchers required much larger numbers of people to sign up to each deal, forcing its users to wait around for strangers to join their group, and giving them limited control over the whole process. In addition, when Groupon launched in 2008, social media and smartphones weren’t widespread, making email the most common way to spread the word about vouchers – not exactly efficient.</p> <p>Unlike Pinduoduo, Groupon also wasn’t an ecommerce vendor in its own right, but instead relied on retailers and restaurants to propose and agree to the discounts it offered on their behalf. This meant it had to lower the risk for businesses participating in its service, adding an extra layer of friction. All of these factors caused Groupon to later abandon the ‘group discount’ model in favour of a marketplace format.</p> <p>WeChat’s ubiquity and flexibility has allowed Pinduoduo to spread like wildfire among Chinese consumers, who are eager to snap up a good deal. Many Pinduoduo users have reported being introduced to the app by their WeChat friend circle.</p> <p>By basing its model on social sharing, Pinduoduo turns its customers into brand ambassadors, and rewards them well for it.</p> <p>With that said, the social element is only half of the reason for Pinduoduo’s immense success. It has also managed to tap into an entirely new market of consumers which have so far been overlooked by its more well-established competitors.</p> <h3><strong>Tapping into a new market</strong></h3> <p>China-focused tech publication Pandaily <a href="https://pandaily.com/alibabas-worst-nightmare-pinduoduo-becoming-the-no-1-e-commerce-app-in-china/">wrote of Pinduoduo</a> that, “The lure of Pinduoduo is not its low prices, but the satisfaction of getting a good deal”.</p> <p>However, Pinduoduo’s low prices are still a big lure in and of themselves – especially for Chinese citizens living in its less affluent cities.</p> <p>Major Chinese ecommerce companies tend to focus their attention on the increasingly wealthy consumers in China’s big cities, appealing to them with luxury goods at high prices. These kinds of products are much less likely to appeal to ordinary workers in third- and fourth-tier cities, who find shopping websites like Tmall (owned by Alibaba Group) too expensive.</p> <p><img src="https://assets.econsultancy.com/images/0009/5234/tmall_burberry.jpeg" alt="Tmall Burberry" width="656" height="429"></p> <p><em>Alibaba Group websites like Tmall promote luxury goods, whereas Pinduoduo's customers prefer to search for a bargain.</em></p> <p>This is also a demographic who are only recently on the internet, and so depend on apps like WeChat as a source of information. According to consultancy Analysys International, nearly 60% of Pinduoduo’s users are from third-tier cities and beyond.</p> <p>“The Pinduoduo model is based on social media and has wider reach into a lot of new Internet citizens,” Jason Ding, a partner at consultancy Bain &amp; Co., <a href="https://www.forbes.com/sites/ywang/2018/04/06/pinduoduo-the-1-5b-startup-challenging-e-commerce-giant-alibaba-in-chinas-towns-and-villages/#5cf5730444d7">told <em>Forbes</em></a>. “Alibaba is trying to serve more high-end customers, but there are people who don't want to pay for premium, but value."</p> <p>For the same reason, smaller merchants and manufacturers are starting to migrate their wares over to Pinduoduo to increase exposure. Again, with companies like Alibaba much more focused on high-end products, China’s small businesses are left to look elsewhere for an ecommerce partner.</p> <p>Pinduoduo’s value products haven’t come without some complications, however. The platform has been plagued by fake and shoddy goods, with a Pinduoduo spokeswoman telling <em>Forbes</em> that the company took down 10 million problematic listings in 2017, and has set up a $24 million fund to compensate users.</p> <p>This could be a problem for Pinduoduo’s presence on WeChat if the company can’t keep on top of things, as in the past, WeChat has shut down hundreds of mini programs for selling counterfeit goods.</p> <p>However, Pinduoduo has stated that it is handling the problem.</p> <h3><strong>Can Pinduoduo’s ecommerce success be replicated?</strong></h3> <p>China’s big retail companies aren’t taking the success of Pinduoduo lying down. In March, Taobao (a part of Alibaba Group) launched its own app aimed at selling bulk goods at cheap prices: Taobao Tejiaban, or Taobao Special Offer Edition.</p> <p>Taobao Tejiaban also has a social component, in that users can earn cash rewards of up to 10 yuan (about £1.17 in GBP) by successfully inviting others to use the service.</p> <p>However, Taobao’s deals may not come close to Pinduoduo’s for value: China commentary blog Sixth Tone found that “some deals on Taobao’s new app weren’t particularly cheap, or even exclusive” – such as a pack of marinated bean curd that was only one yuan cheaper than its price on Taobao.</p> <p>What about outside of China? Could another company succeed with Pinduoduo’s model elsewhere in the world? Maybe. If Groupon had launched its group discount service in 2018 instead of 2008, it’s quite possible that it would have seen more success.</p> <p>The western world doesn’t have a single, universally dominant chat app in the same way that China does – while WhatsApp or Facebook Messenger might come close in terms of ubiquity, neither of them boasts the same flexibility that WeChat offers, with payment functionality, social sharing and mini programs all integrated into one app.</p> <p>However, the well-established presence of social media and smartphones could still enable a group discounts app to catch on and scale much more effectively than it did in 2008.</p> <p>There might also not be an obviously underserviced market in the western world that compares to China’s lower-tier cities, but that doesn’t mean that there isn’t demand. Even now, no businesses have really stepped up to fill the niche left vacant by Groupon – many companies offer group deals, but not at scale or as their primary business model – leaving it open as a potential opportunity for the right start-up to snap up.</p> <p>Despite Pinduoduo’s many initial successes, the company is still young and faces challenges around monetising its service. The cheapness that has attracted so many users to the app means sales margins are slim, and nor does Pinduoduo charge merchants a fee for listing their products on the service. While the app might be hugely popular, it won’t matter if Pinduoduo can’t turn that popularity into profit.</p> <p>But if its model does prove sustainable, watch this space – we might just see some more entrants into the world of social commerce.</p> <p><em><strong>For more on innovative social media, join us at the <a href="https://www.festivalofmarketing.com">Festival of Marketing</a> in London, 10-11 October, with 10 stages (including one dedicated to social) and some amazing headliners.</strong></em></p> tag:econsultancy.com,2008:BlogPost/70088 2018-06-12T14:29:00+01:00 2018-06-12T14:29:00+01:00 The digital transformation of Accent Group: A retail case study (part 2) Jeff Rajeck <p>I started by asking Teperson whether there was an end in mind when he started (such as implementing 3-hour delivery, as he mentioned in part one) or if the transformation is ongoing?</p> <p>"Much like people say your website is never finished," Teperson replied, "I don't think the transformation journey ever ends."</p> <p>"I think by definition if you're not going forward you're going backward. If you're not constantly changing and evolving with the consumer then you are going to fall behind. </p> <p>"We are fortunate in so far as we are ahead of a lot of other businesses - and our competitors in the market - which is a great competitive advantage for us. But your work is never finished.</p> <p>"In Australia, we have The Bureau of Statistics. Using its data, we looked at the demographic shift over the last five years and then fast-forwarded that five, 10 and 15 years into the future to get a sense of what is happening in the market.</p> <p>"I don't think the transformation journey ever ends."</p> <h3>Generation Y, the largest cohort</h3> <p>Teperson discussed this transformation journey in the context of a changing consumer profile:</p> <p>"If you look at what has happened over the last 5 years, Generation Y overtook baby boomers as the largest cohort by number in terms of the representative population in the market.  That's a pretty extraordinary statistic; it's the first time in history that a generation has been skipped in terms of becoming the largest representative cohort in the market.</p> <p>"And if you look at that from a retailer's perspective, retailers went from a market of baby boomers which had the largest disposable income and the largest share of purchasing dollars to suddenly that purchasing cohort dropping by two generations to Gen Y who had grown up very au fait with digital consumption. They were the first generations who had grown up in which everything was digital.</p> <p>"Fast-forward that behavior over the next five years and Gen Z grows in its influence in the market. Gen Z grew up with a mobile in their hand and will soon be the largest cohort in the marketplace."</p> <h3>Preparing for change</h3> <p>Teperson refers to this generation shift as "a wonderful lens to sober you up for how much change is still ahead of us."</p> <p>"Yes, we have done a great job of building a strong foundation and we have set ourselves on a fantastic path," he continues, "but I think the transformation that we have seen thus far will pale in comparison to the transformation we will need to make over the next five to 10 years to make sure we are relevant for the next generation."</p> <p><img src="https://assets.econsultancy.com/images/0009/5362/taf.jpg" alt="" width="800" height="600"></p> <h3>Challenges to come</h3> <p>Next I asked Teperson about what other challenges he sees on the horizon. At a high level, he admitted there are two things that keep him awake at night:</p> <h4>1) Competition</h4> <p>"The first is the competition that doesn't exist today. If you are well capitalized and well-funded and don't carry 20 years of legacy systems, you can do things differently.  You can enter a market differently, you can be more nimble and you can be more responsive to a target market. So, the competition that doesn't exist today and how those distribution models build out that is something that keeps me awake at night."</p> <h4>2) What the customer wants tomorrow</h4> <p>"The second thing is what the customer wants tomorrow.  Again, I suppose I am aware of a lot of quotes that sum this up, but one stands out: 'It's far easier to invent the future than it is to predict it.'</p> <p>"That's where innovation comes in. Now, click-and-collect wasn't necessarily innovative but ship from store was, and 'endless aisle' is an extension of that. Then, how do we get the product to the customer faster? Well, let's do it in three hours.</p> <p>"If we listen to the customer and reinvent or re-imagine what the experience might look like, we stand a better chance of predicting what the future holds.  It's so easy to fall into patterns of saying that we have done it now, surely, we can sit on our hands - well you can't.</p> <p>"So, while it's tempting to work on becoming more operational and efficient, the consumer doesn't wait, and the competition doesn't wait either in picking holes in your customer experience.</p> <p>"I really do believe that one of the best competitive advantages that we have in being an omnichannel retailer is our store network. There is a lot of commentary around this - is it a competitive advantage or a weakness - and a threat?  I think that we have demonstrated that we have been able to grow sales and profit by leveraging our asset base and rethinking/re-imagining how we deploy those assets in the market.</p> <p>"If we listen to the customer and reinvent or re-imagine what the experience might look like, we stand a better chance of predicting what the future holds.</p> <p>"Our stores are always important. They are the physical manifestations of our brand. In a retail experience, you can play with so many of the senses. You can touch things, smell things - new products, new cars - and it creates a very emotive connection. There are even examples of retail bringing sensory experiences to taste. There are 'ice cream pairings' with a sneaker experience.  It can be a wonderful playground to connect with consumers.</p> <p>"But, equally, you can re-imagine how you can utilize that asset base and that brand awareness and really flex your muscle digitally. Accent Group is the envy of every pure-play retailer that is looking for ways to engage consumers through a physical presence.</p> <p>"So, we have to challenge to really continue to re-imagine what those experiences can look like."</p> <p><img src="https://assets.econsultancy.com/images/0009/5223/retail-digital-transformation-2-2.jpg" alt="" width="800" height="541"></p> <p><strong>Customer experience benchmarks</strong></p> <p>Teperson named NPS as one of Accent Group's key <a href="https://www.econsultancy.com/blog/69889-what-is-customer-experience-how-can-it-be-measured-and-who-should-own-it">customer experience benchmarks</a>. "NPS is certainly one [of them]," he said, "and that's a universal measure that we look at. We track NPS across all of our businesses some in real-time, some in polls. We have some of the highest NPS scores in the market. TAF has an NPS score of an 82. The only brand who is above that is Apple.</p> <p>"We also look at other measures such as the traffic to our site. What is the interest in our brand? When you have growing traffic numbers, you want to see whether your normal metrics, such as conversion rate, is in line or growing. You don't want to see a dilution of your conversion rate.</p> <p>"We also look at metrics across different devices. Some of our brands have mobile usage in excess of 70% and so looking at the conversion metrics across devices is also really critical and important to us. Also, how much revenue we generate from each visit. All the quantifiable measures around growth are important.</p> <p>"From a digital transformation perspective, another benchmark that is really important to us is what percentage of sales is digital. We set a target of being able to get to 15% in the next few years. We are well on our way to achieving that. I think we will do it ahead of our target date. </p> <p>"But again, going back to the original question, each of the brands performs a little bit differently. Our pure brands in market don't have as high of a percentage of digital of their total transactions. The younger, faster brands in our stable are growing much faster and digital represents a much larger share of that wallet.</p> <p>"And so those indicators actually provide us with a great decision-making lens for how fast we need to accelerate things or in what order we can roll things out."</p> <p><em>This is part two of a three part series on the digital transformation of Accent Group. Read parts <a href="https://econsultancy.com/blog/70087-the-digital-transformation-of-accent-group-a-retail-case-study-part-1/">one</a> and <a href="https://econsultancy.com/blog/70089-the-digital-transformation-of-accent-group-a-retail-case-study-part-3/">three</a> here.</em></p> <p><em><strong>If you are interested in how Econsultancy can help you with your own digital transformation journey, <a href="https://econsultancy.com/training/digital-transformation/">get in touch</a>.</strong></em></p> tag:econsultancy.com,2008:BlogPost/70087 2018-06-11T15:00:00+01:00 2018-06-11T15:00:00+01:00 The digital transformation of Accent Group: A retail case study (part 1) Jeff Rajeck <p>Yet evidence of changes in the retail customer experience are difficult to find. Most aspects of retail shopping haven't changed much in the past five years.</p> <p>Accent Group, which manages multiple footwear retail shops and brands in Australia, has, however, pushed ahead with digital transformation and is now offering its customers a very different shopping experience, enhanced with digital technology.</p> <p>To find out more, I spoke with Mark Teperson, the Chief Digital Officer of Accent Group and discussed many aspects of their digital transformation programme.</p> <p>In part one of our talk, we discuss the group's digital transformation journey, the reaction of the international brands and what Teperson felt were the key characteristics of a successful digital transformation.</p> <h3>The business models</h3> <p>Accent Group consists of nine different retail brands and it has distribution rights for 10 international brands - including TAF, Skechers, Merrell - and it has a total 445 stores across Australia and NZ. I asked Teperson what the digital transformation journey has been like for a company with so many moving parts?</p> <p>"It's a good question and one which I get asked more often than any other. I think what is important to know is that in the makeup of the businesses and stores, we operate using a number of different models.</p> <p>"For The Athlete's Foot (TAF), Accent Group is a 'franchisor' with about 100 franchisees. So, with them, we have been doing digital transformation in a franchise business - that in and of itself could be a case study.</p> <p>"Accent Group is also a licensee and, for example, we were the first distribution license for Skechers internationally and we have been so for 20 years. We work with global brands but manage them locally in Australia with very stringent brand guidelines.</p> <p>"Our third business is those brands which we own locally in Australia, predominantly being Hype DC and Platypus Shoes. In these cases, we own that retail format and we can drive and dictate how that evolution comes to light.</p> <p>"So, there are several competing business models and many variables that we have to contend with when we go about this."</p> <p><img src="https://assets.econsultancy.com/images/0009/5213/retail-digital-transformation-1.jpg" alt="" width="800" height="485"></p> <h3>Follow the customer</h3> <p>Teperson talks about the digital transformation journey starting and ending with the consumer. This isn't just a soundbite. Here, he elaborates:</p> <p>"Everybody says that they have 'customer-centric strategies' and talk about 'putting the customer at the heart of everything you do'. I don't know if you have seen a picture in my presentations - on my wall in my office there is a quote from Sir Terry Leahy, former Tesco CEO: “Follow the customer, and you will never have to look for growth.”</p> <p>"And that principle, that very salient principle, is what has underpinned all the innovation that we have brought through digitizing our business. </p> <p>"What do I mean by that? Our customers told us that they wanted click-and-collect, so we implemented it.</p> <p>"And then, off the back of click-and-collect, our customers were looking for more product to be able to be purchased online. So, we then turned all of our click-and-collect stores into distribution points. We started thinking of our stores not only as experience centres for our customers but as distribution centres for our product. This means we are able to get products to customers faster, but we also open up the inventory pool.</p> <p>"Doing so had a transformational impact, not only on the business in terms of the sales and the momentum that it built for us, but importantly for the customer as well. We were fulfilling more of their demand online.  </p> <p>"And digital transformation has been built off the momentum that we have seen off of these innovations. Click-and-collect started and it was a great incremental lift. We saw overall about 10%-20% lift in our digital sales when we launched it. Then, when we did ship from store, we saw another 30-50% lift in our digital sales as a result. And so, this is why you should 'follow the customer'."</p> <h3>Same-day delivery and 'endless aisle'</h3> <p>On top of click-and-collect, Teperson expanded on what's next for tech and logistics at Accent:</p> <p>"Consumers invariably value choice and service and so Accent Group is next launching same-day delivery and then 3-hour delivery. That will not just be from a warehouse, it will be from every single one of our stores across the country. This means that we'll have approximately 80-90% coverage of the consumer market and be able to get product to them within three hours across the country - which is a pretty amazing transformation.</p> <p>"And because one of the learnings from ship-to-store or click-and-dispatch was to make all of our inventory available to customers online, we next want to solve the problem when we don't have the inventory in the store a customer is at, but we have it somewhere else.</p> <p>"To do so, we are going to launch 'endless aisle', where a team member in one of our stores has access to every piece of inventory we own across the business. So, if the customer is standing in front of them, they can fulfill that desire for that customer and have it delivered to them free of charge next day, make the customers life and the experience better.</p> <p>"So back to your question around digital transformation across the group. The take up of these pieces of innovation has been a little bit different across each of our brands, but it is always driven by what the consumer wants."</p> <p><img src="https://assets.econsultancy.com/images/0009/5214/retail-digital-transformation-2.jpg" alt="" width="800" height="617"></p> <p>I asked Teperson if these initiatives get different reactions at different brands, stores and franchisees.</p> <p>"You touch on an interesting paradigm," he said. "Comparing our own brands Platypus or Hype DC to the more complex franchise model, there are a lot more stakeholders involved in a franchise model and so digital transformation is a more complex journey.</p> <p>"The brilliant thing about it though is that because we have done it before in all our company-owned businesses and licensees, we had a history of results. So, we could say 'this is not what we think - it's what we know'. And to be able to go to these businesses with a definitive case study or model around how something should or will operate makes the digital transformation business case easier."</p> <h3>Accelerating digital transformation</h3> <p>Next Teperson picked up the theme franchisees and their possible reluctance to accelerate their transformation.</p> <p>"Regarding The Athlete's Foot (TAF), I was responsible for our first ecommerce execution five years ago.  At a national TAF conference they took a poll in the room asking the franchisees if they thought they should be online and, if so, in what time period.  The response was 'yes we should be there', but only sometime in the next 5 years. Within a few months after that, though, being online became the most important issue in the business to get solved and we deployed a website for them.</p> <p>"To be able to go to these businesses with a definitive case study or model around how something should or will operate makes the digital transformation business case easier.</p> <p>"But the challenging piece in that model is that the website, which had profit share with franchisees, was seen as a competitor to their business. So, we then changed the model so that all the fulfillment comes out of stores, the orders are allocated according to the proximity of the delivery address and the franchisee gets 100% of the benefit.</p> <p>"That in and of itself has been a transformational change for our franchisees who no longer have to fear digital - and changes in consumer behavior - as being a threat to their business. They can now capitalize on these changes."</p> <p>Teperson was pointing out that for Accent group, digital transformation is not only a digital issue but has elements of appeasing existing stakeholders in the business.</p> <p>"I think this whole concept of digital transformation is such a profound topic," he says. "It's the biggest buzzword in the market at the moment and arguably every business is dealing with it. But when it comes to the really simple principles around what makes a successful transformation, what are the ingredients for those things, I think there are a couple of kind of key characteristics of it."</p> <h3>Characteristics of successful digital transformation</h3> <p>Teperson laid out these two key characteristics.</p> <h4>1) The customer</h4> <p>"The first thing is that the strategy starts and ends with the customer. More often than not, I see examples of brands which try to build monuments to themselves when they think about digital transformation. They build technology which customers don't want - and haven't asked for - but they think it demonstrates that they are digitally savvy. So, really listening to your customers around what they want is first and foremost."</p> <h4>2) Emotional intelligence</h4> <p>"But I think that what we probably don't talk about enough in digital transformation is the soft skills required to make us successful. And what I mean by that the emotional intelligence (EQ) that you need around a senior leadership table to position digital transformation in such a way that it is not a threat to the business - or more importantly a threat to someone else's job. Instead, digital transformation is a very empowering opportunity for solving business problems or customer problems or challenges that exist in the business - inefficiencies - through a digital lens.</p> <p>"When digital transformation projects are thrust into a business it can create a very awkward political tension. Most people are, naturally, scared or resistant to what they don't know or understand.</p> <p>"So, digital transformation is too often positioned as a complete change to the way we are going to operate instead of as an opportunity to discover how we can solve problems, how we can be more efficient, how we can help our consumers have better experience. It's really the lens in how you position digital transformation that can often be the difference between success and failure.</p> <p>"What most people fail to understand is that a successful digital transformation requires the alignment of every single division in the business.</p> <p>"In our vertical, it's retail operations. We have to make sure the stores are fulfilling on that seamless customer experience whether its click-and-collect or in store. Inventory levels need to be very accurate otherwise you're going to create a really poor experience for a customer who thinks something is available in the store when it’s not. </p> <p>"Finance, reporting, logistics, infrastructure, IT, and training are all key functions that need to come together to support the strategy.</p> <p>"What most people fail to understand is that a successful digital transformation requires the alignment of every single division in the business.</p> <p>"So, the customer is the most important reason around digital transformation - but emotional intelligence has to be the second most important element in terms of getting digital transformation right."</p> <h4>Momentum</h4> <p>I put it to Teperson that it's quite common to talk about senior level buy-in and technology integration as being key to successful digital transformation - but was he saying emotional intelligence is the underrated quality of a successful digital transformation project?</p> <p>"Absolutely," he replied. "The senior leadership buy-in - let's call that table stakes - it needs to happen. You have to be able to respond to the different stakeholder dispositions such as where are they today in their understanding of digital, where do you need them to be and how can you help them bridge that gap.</p> <p>"But those strategies need to be done at a very personal level on a one-to-one basis, and by building that coalition, you build momentum.</p> <p>"I think the most important thing about a successful transformation is that once you have the customer vision right, and you have the right people who have that EQ and can influence people, the next key thing is the momentum.</p> <p>"You can't do everything overnight. Where is the lowest hanging fruit? How can you prove it to the business? Not only the wins that you are delivering to the consumer but what are the financial benefits that are flowing from that? And then taking it forward from there."</p> <p>This is part one in a three part series. Read parts <a href="https://econsultancy.com/blog/70088-the-digital-transformation-of-accent-group-a-retail-case-study-part-2/">two</a> and <a href="https://econsultancy.com/blog/70089-the-digital-transformation-of-accent-group-a-retail-case-study-part-3/">three</a>.<em><br></em></p> <p><em><strong>If you are interested in how Econsultancy can help you with your own digital transformation journey, <a href="https://econsultancy.com/training/digital-transformation/">get in touch</a>.</strong></em></p> tag:econsultancy.com,2008:BlogPost/70082 2018-06-11T08:28:15+01:00 2018-06-11T08:28:15+01:00 The best digital marketing stats we’ve seen this week Nikki Gilliland <p>Enjoy.</p> <h3>93% of consumer-facing businesses are unable to use predictive analytics</h3> <p>According to a <a href="https://www.sas.com/en_gb/whitepapers/darkness-of-digital-shadows/download.html#formsuccess" target="_blank">new report</a> by SAS – based on the responses of 350 heads of marketing, customer service and experience - businesses are at risk of offering repeated recommendations to customers. This is because 93% said they are unable to use analytics to accurately predict what individual customers will want in future.</p> <p>Meanwhile, 54% mistakenly believe that they are ‘best-in-class’ or ‘transformational’ when it comes to using customer intelligence to shape their marketing campaigns.</p> <p>Other interesting takeaways from the report include the fact that 30% of companies say they use less than half of the customer data they hold, and 70% of organisations are typically not collecting meaningful data to personalise digital experiences. For example, just 25% are analysing previous transactions, and only a fifth are using CRM data.</p> <p><strong>More on predictive analytics:</strong></p> <ul> <li><a href="https://www.econsultancy.com/blog/69860-start-me-up-metrical-reducing-cart-abandonment-with-predictive-analytics" target="_blank">Start Me Up! Metrical – reducing cart abandonment with predictive analytics</a></li> <li><a href="https://www.econsultancy.com/blog/69228-predictive-analytics-four-prerequisites-of-an-effective-strategy" target="_blank">Predictive analytics: Four prerequisites of an effective strategy</a></li> </ul> <h3>59% of UK consumers think all brands should offer loyalty schemes</h3> <p><a href="https://yougov.co.uk/news/2018/06/05/what-the-british-think-of-loyalty-programmes/" target="_blank">A new study</a> from YouGov and Mando Connect suggests that the majority of UK consumers expect brands to reward them for their loyalty.</p> <p>In its research, YouGov discovered that 59% of adults think all brands should offer a loyalty programme, while 77% are subscribed to at least one programme already. This figure rises to 85% among women compared to 70% of men.</p> <p>Meanwhile, 72% of people think loyalty programmes are a great way for brands and businesses to reward their customers, and as a result, 59% think all brands should offer loyalty schemes.</p> <p>However, the research also shows that no one size fits all, with people citing very different motivations for engaging with loyalty programmes. For example, benefiting from discounts and offers is the top reason that people join loyalty programmes – cited by 87%. However, 55% also cited discounts and rewards from partner brands, and 52% wanted free services, products and experiences.</p> <p><img src="https://assets.econsultancy.com/images/0009/5127/loyalty_schemes_stat__1_.png" alt="consumer opinion on loyalty" width="780" height="391"></p> <p><strong>More on loyalty:</strong></p> <ul> <li><a href="https://econsultancy.com/blog/68811-loyalty-programs-are-losing-their-sway-here-s-what-brands-can-do-about-it" target="_blank">Loyalty programs are losing their sway: here's what brands can do about it</a></li> <li><a href="https://www.econsultancy.com/blog/69780-five-ways-ecommerce-brands-can-build-customer-loyalty" target="_blank">Five ways ecommerce brands can build customer loyalty</a></li> <li><a href="https://www.econsultancy.com/blog/69622-four-ways-brands-build-loyalty-engagement-without-using-points" target="_blank">Four ways brands build loyalty &amp; engagement (without using points)</a></li> </ul> <h3>Almost half of B2B buyers make their minds up before talking to vendors</h3> <p><a href="https://info.millerheimangroup.com/WP-2018-05-30BuyerPreferenceStudy.html" target="_blank">According to research</a> by Miller Heiman Group and CSO Insights, 68% of B2B buyers see little or no difference between vendors, largely due to a lack of insight provided during the decision-making process. </p> <p>In a survey of 500 decision-makers, only 23% of buyers said they identify sales-people as a top three resource for solving their business problems.</p> <p>In fact, 70% of buyers fully define their needs on their own before even approaching or engaging with a seller. Meanwhile, 44% of potential buyers identify specific solutions before engaging with sales reps and 20% don’t contact sellers until they’re ready to commit to a deal.</p> <p>It’s not all bad news for sales, however, as buyers still want fresh insight and expertise if it is relevant – 65% said they find value in discussing their needs with reps.</p> <p><strong>Related reading:</strong></p> <ul> <li><a href="https://econsultancy.com/blog/69826-could-a-pharma-company-shun-sales-reps-and-be-successful" target="_blank">Could a pharma company shun sales reps and be successful?</a></li> <li><a href="https://econsultancy.com/blog/68810-four-ways-ai-is-already-being-applied-to-sales-and-marketing" target="_blank">Four ways AI is already being applied to sales and marketing</a></li> <li><a href="https://econsultancy.com/blog/69065-five-advanced-data-and-segmentation-tactics-for-marketing-and-sales" target="_blank">Five advanced data and segmentation tactics for marketing and sales</a></li> </ul> <h3>Retail digital marketing budgets on the increase, but investment in skills neglected</h3> <p>Econsultancy’s 2018 <a href="https://econsultancy.com/reports/digital-intelligence-briefing-2018-digital-trends-in-retail/" target="_blank">Digital Trends in Retail</a> report in association with Adobe states that retailers are increasing digital marketing investment, with 72% of respondents (from a survey of 600 senior leaders) saying that they plan to do so in 2018.</p> <p>However, just 29% of respondents say that they plan to invest significantly in digital skills and education during 2018, while 24% say they will be making little or no investment in upskilling their staff this year.</p> <p>The combination of difficulty in recruiting and retaining experienced practitioners, and the fast-changing nature of digital marketing and commerce, means that a failure to invest in training and skills could lead many to come unstuck in future.</p> <p><img src="https://assets.econsultancy.com/images/0009/5126/Adobe_investment.JPG" alt="digital marketing spend for retail" width="760" height="488"></p> <p><strong>Related reading:</strong></p> <ul> <li><a href="https://econsultancy.com/blog/70071-the-future-of-ecommerce-according-to-mary-meeker/" target="_blank">The future of ecommerce according to Mary Meeker</a></li> <li><a href="https://www.econsultancy.com/blog/69778-from-growth-to-soft-skills-where-professional-marketers-should-focus" target="_blank">From growth to soft skills, where professional marketers should focus</a></li> </ul> <h3>Social marketers focused too much on sales</h3> <p>Sprout Social’s <a href="https://sproutsocial.com/insights/guides/2018-index/" target="_blank">latest report</a> suggests that marketers are still wrongly focusing on the ROI of social media activity, despite most users not falling into the ‘buy now’ mind-set.</p> <p>55% of survey respondents (from a pool of 2,000 social marketers) listed measuring ROI as a primary challenge. And while 41% of marketers note generating sales as one of their primary goals on social, only 14% of marketers say they are able to quantify the revenue from social.</p> <p>The report states that this is not necessarily because social marketers aren’t sophisticated enough to focus on conversions. Rather, it’s because social’s true value isn’t in direct attribution, but it in the awareness and consideration stages of the funnel.</p> <p>In fact, consumers’ top preference for social content falls into the consideration category, with 30% of those surveyed saying they want links to find out more information from brands on social.</p> <p><img src="https://assets.econsultancy.com/images/0009/5125/social_marketers.JPG" alt="challenges for social marketers" width="660" height="491"></p> <p><strong>Related reading:</strong></p> <ul> <li><a href="https://www.econsultancy.com/blog/69144-measuring-social-media-roi-case-studies-stats-that-prove-it-s-possible" target="_blank">Measuring social media ROI: Case studies &amp; stats that prove it’s possible</a></li> <li><a href="https://econsultancy.com/blog/69111-if-you-want-to-improve-your-marketing-roi-stop-spending-on-social-media" target="_blank">If you want to improve your marketing ROI, stop spending on social media</a></li> <li><a href="https://www.econsultancy.com/blog/68956-should-marketers-be-able-to-prove-the-roi-of-influencers" target="_blank">Should marketers be able to prove the ROI of influencers?</a></li> </ul> <h3>78% of executives struggling to execute digital transformation</h3> <p>In a survey of select CDO’s, CMO’s and IT professionals, Acquia has found that the majority of executives are still struggling to see through digital transformation initiatives. </p> <p>More specifically, 78% said that they have experienced difficulties during the implementation of their digital transformation project, with a fifth of those organisations finding executing their digital transformations projects ‘extremely difficult’.</p> <p>Despite this, marketers remain committed to completing plans, indicating a number of compelling reasons why. Overall, companies are largely motivated by a need to catch and pass competitors, as 56% of respondents admitted that they think they are behind their competitors when it comes to digital marketing. </p> <p>Lastly, 71% also said that - despite the immediate challenges - they believe digital transformation will give their business far greater freedom to innovate.</p> <p><strong>More on digital transformation:</strong></p> <ul> <li><a href="https://econsultancy.com/blog/69598-four-steps-to-successful-digital-transformation" target="_blank">Four steps to successful digital transformation</a></li> <li><a href="https://econsultancy.com/blog/69281-digital-transformation-it-s-not-a-destination" target="_blank">Digital transformation: It's not a destination</a></li> </ul> <p><em>To learn more, check out Econsultancy’s <a href="https://econsultancy.com/training/courses/digital-transformation-in-practice" target="_blank">Fast Track Digital Transformation Training</a></em></p> <h3>The majority of consumers would pay more for ethical brands</h3> <p>A new study by Media.com has found that consumers particularly value brands with <a href="https://www.retailtimes.co.uk/corporate-values-matter-consumers-are-willing-to-spend-more-with-brands-that-give-back/" target="_blank">strong ethical principles</a>, with the majority stating that they wouldn’t mind paying more for their products.</p> <p>From a survey of 1,000 consumers, 67% of respondents stated that they would pay more for environmentally-friendly products, while 68% said the same for products that do not test on animals. 60% also said they would pay more to brands which give back to the local community.</p> <p>Meanwhile, consumers also want brands to be held accountable, with 81% saying that brands should take responsibility for their environmental impact. 88% also say they expect companies to take action in order to tackle plastic waste and pollution. </p> <blockquote class="twitter-tweet"> <p lang="en" dir="ltr">So happy I've discovered <a href="https://twitter.com/_thesoapco?ref_src=twsrc%5Etfw">@_thesoapco</a> Genuinely love their exfoliating wild nettle &amp; sage soap. Not as much as I love <a href="https://twitter.com/hashtag/Edtech?src=hash&amp;ref_src=twsrc%5Etfw">#Edtech</a> and <a href="https://twitter.com/hashtag/scifi?src=hash&amp;ref_src=twsrc%5Etfw">#scifi</a>, but almost as much. Definitely recommend. <a href="https://twitter.com/hashtag/SocialChange?src=hash&amp;ref_src=twsrc%5Etfw">#SocialChange</a> <a href="https://twitter.com/hashtag/greatcustomerexperience?src=hash&amp;ref_src=twsrc%5Etfw">#greatcustomerexperience</a> <a href="https://twitter.com/hashtag/greatgiftideas?src=hash&amp;ref_src=twsrc%5Etfw">#greatgiftideas</a> <a href="https://t.co/zEKJPkiZxy">pic.twitter.com/zEKJPkiZxy</a></p> — Nina Iles (@NinaIles) <a href="https://twitter.com/NinaIles/status/1003701267384979456?ref_src=twsrc%5Etfw">June 4, 2018</a> </blockquote> <p><strong>Related reading:</strong></p> <ul> <li><a href="https://econsultancy.com/blog/69702-five-brand-campaigns-that-took-a-stand-on-social-issues" target="_blank">Five brand campaigns that took a stand on social issues</a></li> <li><a href="https://www.econsultancy.com/blog/69401-how-lush-delights-customers-with-brand-marketing-strong-values-and-digital-innovation" target="_blank">How Lush delights customers with brand marketing, strong values and digital innovation</a></li> </ul> tag:econsultancy.com,2008:BlogPost/70083 2018-06-08T11:37:07+01:00 2018-06-08T11:37:07+01:00 19% of retailers cite data-driven marketing as top opportunity in 2018 Nikki Gilliland <p>This is just one of the most interesting takeaways from Adobe’s <a href="https://econsultancy.com/reports/digital-intelligence-briefing-2018-digital-trends-in-retail/" target="_blank">2018 Digital Trends in Retail</a> report, which comes from a survey of 600 senior retail leaders.</p> <p>So, why are retailers suddenly so excited about data strategies? Here’s more on that, plus a few more snippets from the report. </p> <h3>A data-driven mindset</h3> <p>It is clear that many retailers are starting to realise how data-driven strategies can set them apart from the competition.</p> <p>However, while there has been a marked increase in the number of retailers citing it as an exciting opportunity, this also tells us that it is perhaps still an aspiration rather than a reality.</p> <p>So, how do retailers bring this vision to fruition?</p> <p>Internal capabilities are certainly a big part, with roles ranging from chief data officers to web analysts being key for data-focused companies. </p> <p>Additionally, internal training is important, as is a ‘data-led mindset’, with leading companies now making this a company-wide and cultural change rather than a team-specific one.</p> <p><img src="https://assets.econsultancy.com/images/0009/5142/Data-driven_marketing.JPG" alt="exciting opportunities retail 2018" width="760" height="556"></p> <h3>Data to enhance CX</h3> <p>Another motivation for improving data analysis capabilities is to better understand the customer’s needs. 69% of retailers cited this as a ‘very important’ factor in delivering a great CX.</p> <p>It comes above and beyond other factors, such as the 53% that said the same about optimising internal collaboration between creative and marketing teams, and the 51% that cited improving content marketing through immersive storytelling.</p> <p>Interestingly, even when retailers aren’t explicitly referencing data, it’s still key to over-arching priorities. For example, targeting and personalisation lead the way in both North America and Europe as the top digital-related priorities for 2018.</p> <p><img src="https://assets.econsultancy.com/images/0009/5143/Internal_factors.JPG" alt="internal factors for CX" width="760" height="474"></p> <h3>Real-time experiences</h3> <p>Looking ahead, the report suggests that retailers are increasingly thinking about targeting ‘in-the-moment’ rather than based on past behaviour. 37% of retailers cite real-time personalised experiences as the most exciting prospect in three years’ time, with companies seemingly ready to embrace predictive analytics to help convert prospects into customers.</p> <p>Next up on this list is artificial intelligence to drive campaigns and experiences which, technically, can also be viewed as real-time personalisation. Machine learning can help retailers analyse vast quantities of data to provide relevant content and recommendations to consumers.</p> <p><img src="https://assets.econsultancy.com/images/0009/5140/real_time_experiences.JPG" alt="exiting retail trend three years" width="760" height="518"></p> <h3>Ongoing investment</h3> <p>Finally, the report suggests that ongoing investment in technology and marketing will be key to future success. </p> <p>As the lines between offline and online channels continue to blur, brands that neglect investment in integrated digital marketing run the risk of creating a disconnect between themselves and the consumer – regardless of perceived loyalty.</p> <p>Research suggests both good and bad news. Positively, 73% of respondents said they plan to increase digital marketing spending during 2018 – a higher percentage than the average across all sectors.</p> <p>However, 24% of retailers will be ‘making little or no investment’ in upskilling their staff, which – despite previous spend in this area – means many might lag behind the competition in the long run.</p> <p><img src="https://assets.econsultancy.com/images/0009/5141/Investment.JPG" alt="investment in digital marketing" width="760" height="530"></p> <p><em><strong>Subscribers can download the <a href="https://econsultancy.com/reports/digital-intelligence-briefing-2018-digital-trends-in-retail/" target="_blank">2018 Digital Trends in Retail</a>  report now.</strong></em></p> tag:econsultancy.com,2008:BlogPost/70070 2018-06-06T15:55:00+01:00 2018-06-06T15:55:00+01:00 The best Asia-Pacific digital marketing stats from May 2018 Ben Davis <h3>90% of Chinese searchers go beyond page one</h3> <p style="font-weight: normal;">OMD China's recent <a href="https://brandinginasia.com/infographic-omd-deep-dive-into-search-behaviors-in-china/">Deep Dive into Search</a> looks at the behaviours of 150 Chinese across all their devices for a fortnight, totalling 13,355 searches.</p> <p style="font-weight: normal;">My favourite finding was that on average the searches went through 2.49 results pages per search, split up as follows:</p> <ul> <li>10% of the searchers looked at page one only.</li> <li>47% looked at two pages of search results.</li> <li>and 16% looked at all pages (though I'm not sure how feasible this is)</li> </ul> <p style="font-weight: normal;">The participants averaged five searches per day and many used more than one platform. Twelve percent even searched on another platform after they had found the information they were looking for.</p> <h3>70% of Australians have greater trust in brands with transparent and clear privacy notices</h3> <p style="font-weight: normal;">The <a href="https://www2.deloitte.com/au/en/pages/risk/articles/deloitte-australian-privacy-index.html">Deloitte Australian Privacy Index</a> contains some fascinating insights into the motivations off 1,000 Australian consumers, who were asked about how they understood the nature of their personal information exchange with brands in return for goods and services.</p> <p>69% of respondents believe that trust in, and the reputation of the brand is most important factor when making a decision about sharing personal information, with the benefits received (18%), such as discounts, coming in distant second.</p> <p style="font-weight: normal;"><img src="https://assets.econsultancy.com/images/0009/5086/Screen_Shot_2018-06-06_at_14.11.55.png" alt="reasons to share data" width="400"></p> <p style="font-weight: normal;">Brands are more likely to lose consumer trust and damage their reputation if customer data is used for:</p> <ul> <li>direct sales (68% of respondents said this),</li> <li>inappropriate marketing (58%)</li> <li>and cross-selling of personal information (54%).</li> </ul> <p style="font-weight: normal;">Forty one percent are comfortable with a brand sharing their data with a third party, as long as they trust the first-party brand in question and there’s a benefit to sharing.</p> <p style="font-weight: normal;">Sevnty six percent of respondents indicated they would be more likely to trust a brand after a data security breach if there was timely notification of the breach.</p> <p style="font-weight: normal;">There has been a shift in sector ranking over the year, with top 10 trusted sectors as follows:</p> <ol> <li>Information Technology</li> <li>Finance</li> <li>Government</li> <li>Telecommunications and Media 5. Travel and Transport</li> <li>Retail</li> <li>Real Estate</li> <li>Health and Fitness</li> <li>Education and Employment</li> <li>Energy and Utilities</li> </ol> <p style="font-weight: normal;">Consumers also highlighted that clear privacy notices build trust. Seventy percent agreed with that statement.</p> <p style="font-weight: normal;"><img src="https://assets.econsultancy.com/images/0009/5085/Screen_Shot_2018-06-06_at_14.12.12.png" alt="clear privacy notices" width="615"></p> <h3>Online retailers in Southeast Asia highlight improved delivery as most significant trend</h3> <p>Econsultancy's <a href="https://econsultancy.com/reports/state-of-ecommerce-marketplaces-in-southeast-asia-and-taiwan/">State of Ecommerce in Southeast Asia and Taiwan</a> report in association with Shopee explores the current position of online sales in the region to identify trends and draw attention to challenges and opportunities.</p> <p>14,000 Marketers and retailers were surveyed in the region. When asked what single trend will be most significant to their businesses, marketers most often highlighted mobile payments (36%) and online retailers highlighed improved delivery services (also 36%).</p> <p>The report states that "although the desire to see better fulfilment services rolled out is evident across the region, it is most clearly seen among both retailers and marketers in the Philippines. Half of its marketers (50%), and more than half of its retailers (56%), are prioritizing improved delivery services as the most significant development they are hoping to see in the next few years."</p> <p><img src="https://assets.econsultancy.com/images/0009/5091/trends_in_ecomerce.png" alt="trends in ecommerce" width="615"></p> <h3>The automobile search journey</h3> <p>Back to OMD China's Deep Dive search study now, which also included a quantitative survey of 750 category users in automobile, travel and skincare.</p> <p>The following infographic shows the typical search journey involved in buying an automobile. As expected, Baidu features heavily...</p> <p><em>(Click to enlarge)</em></p> <p><a href="https://assets.econsultancy.com/images/0009/5084/Dive-Search-Automotive-infographics-Branding-in-Asia.jpg"><img src="https://assets.econsultancy.com/images/0009/5084/Dive-Search-Automotive-infographics-Branding-in-Asia.jpg" alt="automobile search" width="400"></a></p> <h3>28% of Vietnamese has exprienced online fraud compared to just 6% of Japanese</h3> <p>This stats comes from <a href="http://www.experian.com.sg/wp-content/uploads/2018/04/Digital-Consumer-Insights-2018.pdf">Experian's Digital Consumer Insights</a> study of consumers across 10 APAC markets – Australia, China, Hong Kong, India, Indonesia, Japan, New Zealand, Singapore, Thailand and Vietnam.</p> <p>The chart below shows penetration of digital services compares with incidence of online fraud across each region.</p> <p><img src="https://assets.econsultancy.com/images/0009/5087/online_fraud_in_apac.png" alt="online fraud in apac" width="615"></p> <h3>Starbucks to double stores in China</h3> <p>The coffee shop with <a href="https://econsultancy.com/blog/70049-the-reasons-a-retailer-is-behind-the-most-successful-mobile-payments-solution/">more mobile payment users than Apple Pay</a> is to double outlets to 6,000 in China by 2022. The brand's ambition in the region is to expand at a rate of a new store every 15 hours.</p> <p><a href="https://insideretail.asia/2018/05/16/starbucks-china-to-double-store-network/#daily">More from Inside Retail.</a> </p> <p><img src="https://assets.econsultancy.com/images/0009/5096/Starbucks_Logo_Hi-res_2.jpg" alt="starbucks" width="300"></p> <h3>B2B marketers prefer video</h3> <p>Video is the preferred format for B2B marketers in Asia Pacific markets, according to research by LinkedIn Marketing Solutions and <a href="https://www.warc.com/newsandopinion/news/b2b_marketers_look_to_video_in_asia_pacific/40446">reported by Warc</a>.</p> <p>Kate Mallord, APAC content marketing manager, discussed a recent survey of 1,400 marketers, with APAC respondents citing brand awareness as the main reason for using video (74%).</p>