by Capillary Marcom | Aug 10, 2022 | Capillary
Whether emotional, social, structural or financial, the world of luxury branding has opened up many new aspirations over the decades. But there is perhaps no country in the world more profoundly driven to luxuriously delight its shoppers than Dubai. The shopping capital of the world is a modern oasis that rewards its customers handsomely. It was, then, a veritable step in the right direction for leading luxury brands across industries to envision new-age customer engagement strategies. This meant reinventing the wheel in terms of digital transformation that was accompanied by the introduction of innovative loyalty programs unseen before.
Luxury loyalty is heralded by the upward swing towards ultra-luxury services across key industries like hospitality and retail in the MENA region at large. Dubai is at the very epicenter of the marketing activities that thrive in the wake of sales over USD 15 Bn in 2022 so far. At the intersection of new age customer retention through multi-tier reward programs that catapult sales and the digital communications that govern them, lies the creative rethinking of personalization through advanced customer analytics. Let’s look at some of the highlights of how luxury marketing scores in Dubai:
- Across the largest retail franchises in Dubai, there’s been a new vision of experiential delight which includes shopping festivals and brand collaborations for maximum engagement
- All different age groups of luxury customers are being targeted by the design and USP of shopping events in Dubai, whether digital influencers coming in to attract GenZ and millennial followers into a community-oriented gathering or even mega sales that extend to an older, wealthier age group as well.
- Jimmy Choo x Mugler, Balmain X Barbie, and MAX&Co X Margherita Maccapani Missoni are some of the latest collaborations to hit local Dubai stores. Fashion trends that are largely in focus for these luxury brands are being juxtaposed with beauty and skincare that also inform some of the most innovative luxury marketing campaigns.
- This is where the loyalty programs complete the purchase loop by adding just the right incentive at the right time, improving customer loyalty for Dubai shoppers over the long haul.
- Marketers are leveraging POS and E-commerce data to segment the premium or luxury cohorts that are targeted with exclusive offers on a timely basis and during festive times like Ramadan.
4 luxury loyalty programs worth indulging in Dubai
With the impact of driving higher profitability through greater customer retention, these are some of Dubai’s best-known luxury loyalty programs that are redefining the meaning of both personalized incentivization as well as customer satisfaction in the here and now.
1. MUSE BY CHALHOUB GROUP
With customer-centricity taking precedence over all else, the Middle Eastern luxury retailer, Chalhoub Group, recently launched Muse. A wide-ranging multi-brand loyalty program that invites the participation of leading lifestyle, fashion and beauty luxury brands within the group. From Michael Kors, Swarovski and Level Shoes to luxury homeware destination Tanagra, and cult beauty brands like L’Occitane and NARS – Muse is growing in popularity across Dubai and Saudi Arabia due to its personalized experiential rewards over all else. The brands came together to go beyond mere point-for-price reduction strategies to give customers what they truly desire from luxury brands – the elevated feeling of exclusivity. With an approach that’s app-first, MUSE is a three-tiered loyalty program, with the base tier called Emerald followed by Sapphire and then Ruby. Points are calculated based on eligible spending at participating stores and the earning rate increases as members move up the tiers. These points can be redeemed either for shopping at any of the 35+ brands across MUSE operating countries with no minimum balance, or, towards experiences. Each tier unlocks exclusive benefits and access to tailored experiences.
2. MYMILLENNIUM
A celebrated coalition loyalty program for Millennium, Copthorne and Kingsgate hotels, Millennium’s recently redesigned loyalty program reduced complexity for better engagement through a single-tiered loyalty program. Catering to a revenue-driven approach alone, for every $1 spent on a hotel room, customers earn 10 points. These points double automatically after 10 nights spent across Millennium locations, providing a significant reward to frequent travelers who stay at a Millenium hotel. Earned points can then be redeemed for a variety of rewards, including free rooms, upgrades and partner offers, all of which are based on a sliding revenue scale. Millennium freezes point values at a half-cent per point, so a $500 hotel night would cost 100,000 points to book.
3. EMIRATES SKYWARDS
Merged effectively with flydubai’s Open Rewards program to invite over a million customers to benefit from shared benefits, Emirates Skywards luxury rewards are truly a class apart. Both Emirates and flydubai flights facilitate earning Skywards and Tier Miles. This plan also lets you earn miles by shopping, gifting or multiplying the miles with their partners around the world. The best part about Skywards Miles is choosing how to spend them because it’s super easy to earn them. After just one long-distance flight, you could potentially accumulate enough miles to qualify for an upgrade.
What’s more is that Emirates Skywards also allows for mile redemption across flydubai and other worldwide partners. Customers have the freedom and flexibility to choose flights with one of Emirates’ partner airlines, luxurious hotel stays, and even tickets to various athletic and cultural events across the world. There are four levels of exclusive benefits to ensure that trips are more rewarding. By traveling with Emirates and flydubai, one can progressively increase Tier Miles balance and access more benefits, according to Blue, Silver, Gold and Platinum tier status. Lastly, the long-term of validity and lack of miles expiration for 3 years ensures that they can be availed for something truly special.
4. AMBER BY AI TAYLOR
With customized rewards across the world’s leading luxury brands, the Amber rewards program, which began in 2008, is available across all Al Tayer Group’s department stores, luxury retailers, beauty and hospitality services, as well as their luxury automotive brands. It has long been considered one of the best rewards programs in Dubai. When members shop at any store that has the facility of the Amber Card, they will earn Amber Points, which can be redeemed in-store or online for their choice of products. Being one of the best loyalty cards in Dubai, Amber has collaborated with over 80 high-end companies, including Gucci and Armani. Thanks to its strong customization options, it has an unrivaled capacity to modify customer experience and empowers customers with the ability to shape their own benefits. This loyalty program includes three levels of membership: Amber Classic, Amber Select and Amber Plus, with benefits varying depending on membership level.
Luxury Loyalty Scape in Dubai…
It is, thus, evident that Dubai businesses are truly going the extra mile to provide their customers with membership-based rewards that build loyalty over the long term. With the market currently booming after the pandemic’s decline, there is an influx of innovative solutions designed to target all different age groups of customers within the larger luxury segment. New marketing communication methods involve collaborative efforts between multiple luxury brands to offer the right set of rewards. The trends in focus are being carried across Dubai’s leading retailers who stand out for higher customer value over time. With new engagement strategies defining the way forward, get in touch with our experts at Capillary Technologies to learn more about engaging your customers too.
by Capillary Marcom | Aug 3, 2022 | Loyalty
The delightful world of food and beverage – a market estimated at USD 500 Bn – calls for an eclectic customer experience ecosystem today. Beyond driving repeat purchases through incentivized free meals and drinks, the F&B industry is witnessing consistent innovation through growth-driving loyalty programs. In the wake of COVID-19, while some major shifts were underscored by smart food-technology applications, ghost kitchens and delivery apps driving last mile fulfillment for several retailers, personalized loyalty offerings genuinely pushed the envelope across new interventions. They helped companies overcome some major challenges that stood in the way before.
3 Key Challenges Faced by F&B Marketers:
1. Behavioral Changes: Key business growth drivers were stalled due to new behavioral changes after the pandemic. An increase in demand for sustainable packaging and organic ingredients meant rethinking brand engagement strategies altogether.
2. Reliable Messaging: Consumers became health conscious to the point of making sure that they only opted for those F&B brands with the right messaging and consistent transparency.
3. Real-Time Rewards: This is where loyalty programs needed to be tailor-made as per emerging preferences to drive higher returns in the long term. New practices were set into motion to ensure that consumer needs were met with adequate data-backed campaign management and the implementation of sophisticated tech stacks.
4 F&B Most-Popular Loyalty Programs
Now that we have looked at the top trends that are being incorporated into F&B loyalty, let’s also look at the leading examples of brands that are winning over customers.
Starbucks Rewards
The global mega cafe brand has undoubtedly altered F&B loyalty programs forever. They offer the most sophisticated and well-managed digital as well as physical card-based reward systems. Starbucks works on the simple premise of point collection and redemption but goes many steps further to ensure that customers enjoy VIP status on the go.
Whether enjoying a free drink on your birthday or getting a bonus meal after a repeated coffee purchase, Starbucks has left no stone unturned when it comes to customer satisfaction.
Chipotle Rewards
In the Mexican cuisine domain, there’s high competition globally. Driving their Eat, Earn, Enjoy philosophy within the realm of loyalty marketing, Chipotle’s winning strategy is to encourage free Chipotle for all. They have a simple system of point-based redemption.
For every $1 spent, 10 points are instantly earned. Purchase is enabled at an omnichannel level across multiple touchpoints. Customers can either buy Chipotle in-store, on the app or online. They can then start collecting points. Once 1250 points are achieved, they can then also get a free Chipotle entree of their choice.
Maggie Louise Confections Club Cocoa
Premium reward-levels enabled by Maggie Louise’s Club Cocoa program ensures that customers keep coming back for more. Experiential rewards are activated upon reaching a VIP level. Customers then enjoy free access to exclusive events and new product tasting sessions. They also get gift hampers of these products and are motivated further by special discounts upon the first or second buys. Three levels are available for the rewards to be enabled. The first is the Insider level (0-1999 points) that provides a welcome gift alongside the point collection system. The next is the Enthusiast level (2000-4499 points) that also provides a birthday gift and higher points on every purchase. Lastly there is the Connoisseur level that enables maximum rewards such as the exclusive sneak-peaks into new collections as well as event invitations. This level is the most desirable for true lovers of Maggie Louise chocolates.
Dunkin Donuts’ DD Perks
In the world of donuts and loyalty, DD Perks is a large-scale program. The simple process of membership and pre-order services allows for maximum customer satisfaction in-store. Members can pay digitally through a loyalty-integrated payment system that allows for a seamless point-to-cash redemption. What’s more is that once a new member signs up on the app, they immediately avail of a free drink right away. The loyalty experience is further personalized with free drinks on birthdays as well as free drinks every 200 points earned. DD Perks also include special surprise gifts and gamified rewards that delight repeat customers and drive higher loyalty in the long term as well.
5 F&B Loyalty Trends That Will Stay For 2022 & Beyond
1. Hyper personalization
The superior customization of rewards and recognition was enabled by a more sophisticated process of customer-data collection. Large F&B conglomerates with multiple brands orchestrated data centralization practices to ensure that campaign management systems were able to successfully resolve personalization issues encountered when they worked in siloes. Digital transformation through the implementation of strong tech stacks, moreover, brought into focus the need for multi-tier loyalty programs that offer unique rewards as per changing customer needs.
2. Value-Added Services
Rewarding customers who demonstrated higher levels of loyalty meant enabling a host of additional offers that brought in creativity into the realm of loyalty marketing. Starbucks Rewards for all different types of customers is perhaps the next-in-class example of this practice. We will look at the winning strategy behind Starbucks’ sustained dominance in the industry in the later section.
3. Percentage-Based Rewards
Discounts that facilitate percentage-based rewards encourage repeat purchases like nothing else. The leading food-delivery service, Zomato, ensured a win-win strategy for itself and its loyal customers by activating percentage-based rewards at a level that was only slightly lower than their average profit margin.
4. Physical Loyalty Cards
Customer footprints are still best identified and retained by physical cards that encourage repeat purchases. POS device scans are a seamless and contactless way of enabling point addition as well as redemption.
5. Social Media Marketing
Now that loyalty programs have made a strong mark in the F&B industry, there is a growing need to market them through social media. Hence, platforms like Instagram are being optimized to ensure that customers derive maximum benefits at the right time. Influencer marketing is further being leveraged to ensure that customers benefit from coupon codes and discounts that are activated in the short term to build brand awareness and consideration.
It is, thus, evident that creating the right F&B loyalty program includes strategizing effectively to meet specific customer needs for each segment. This further entails getting the right digital transformation partner onboard to ensure that customer data is transformed into the most profitable programs. Whether club or tier-based, there is immense scope in this industry in particular due to the love for one’s favorite food and drink. Get in touch with our F&B loyalty experts at Capillary Technologies to understand how best to activate the aforementioned best practices.
by Capillary Marcom | Jul 20, 2022 | Digital Transformation, Loyalty, Marketing and Engagement
While about only a decade ago, Vietnamese consumers were fairly unbothered by brands building consideration, there is now an upsurge in those who wish to be rewarded for repeat purchases. With a growing GDP rate at over 7.5% for an 80 Mn+ population, rising middle-class income is the biggest driver of brand loyalists in this country. Most are paying higher attention to international brands entering the market since the country of brand origin is an important factor. But this is closely followed by value-driven pricing strategies and discounts. Vietnam is, after all, a low-income economy. The rise of the conscious Vietnamese shopper in the aftermath of the pandemic points towards the trend of buying less, but with attention to better quality at a reasonable price.
From purchasing products, the Vietnamese have now undergone a permanent mindset shift to purchasing brands. And there’s no looking back.
In fact, one study reported that now over 40% of Vietnamese shoppers prefer retail brands that offer loyalty cards built upon a multi-tier points system that rewards every purchase. The ability to redeem points upon the next purchase drives better consideration and recall for brands overall. It comes as no surprise, then, that to retain Vietnamese consumers, the largest brands across key retail sectors are competing quite actively for higher engagement. Innovative loyalty programs customized to meet the personalization needs of different customer groups are proving the most useful tools while capitalizing on this emerging APAC market of brand loyalists. And the growing customer database is only refining the way forward for the CRM ecosystem, at large, which will continue to adapt to changing preferences over time. AI and tech optimization are central to the digital transformation of Vietnamese businesses at large.
3 Types of Loyalty Programs Ruling in Vietnam
1. Coalition Loyalty Programs
Vingroup is one of the fastest-growing companies in Vietnam. By setting trends in the local market and introducing new international standards of products and services, it promotes a modern way of life among the Vietnamese. Vingroup created a respected and well-known family of brands operating in several different industries, from real estate to tourism. It was apt for the company to envision a singular coalition loyalty program to bring its offerings under a single source of truth. The company innovated to become the first ever in Vietnam to envision and successfully activate such a program. Based upon the customer value proposition of enabling the ease of earning and burning, the VinGroup Card was launched in 2016. It enables customers to take advantage of redeeming points and special coupon codes or rewards across Vingroup’s varied services.
Online and offline store flexibility of redemption was also enabled simultaneously. The accumulated points can be redeemed directly at checkout without any hassle. The card itself is upgraded from blue to red or VIP after a customer demonstrates their loyalty over time. The VIP card unlocks greater benefits encouraging consistent repeat purchase. Special privileges ensure that the local market specificities are all taken into account while improving Vingroup’s brand esteem and customer relations at once. This is a win-win situation for all parties involved, including the varied brands across sectors that come together under the program.
2. E-Wallet-Loyalty Integration in Apps
Another major trend that’s taking precedence over traditional vouchers is loyalty apps. With the pandemic, Vietnam’s internet economy grew stronger. E-commerce revenue reached a swooping $53 Bn in only the first quarter of 2022. This marks a radical shift in consumption to online from offline, and brands who wish to best engage their consumers through their own apps must factor in their loyalty programs as a prerequisite for their marketing efforts. While still at a nascent stage, there is a lot of untapped growth potential with the activation of e-wallets. Mega supermarket brands like VinMart – the largest consumer goods franchise in Vietnam – achieved a high 61% popularity for its unique loyalty card offering, VinID. This can be attributed to the unique proposition of VinID which allows consumers to convert points into money while buying their groceries and other essentials through the VinID app. What’s more, is that the coalition program benefits are activated across related Vingroup services such as VinMart using this single app that also enables refunds at the consumer’s convenience and reduces overall shopping costs significantly.
It must also be noted that while VinID has competitors in Vietnam – e-Mart, CitiMart and Mega Mart – it is a market leader in terms of brand loyalty. The strategic advantages of offering multiple benefits across varied services beat all else. Thus, while considering a loyalty program, large conglomerates must, in particular, adopt an integrated approach.
3. Omnichannel, Multi-Service Loyalty Applications
Vietnam’s insurance market is one worth delving into when it comes to the final brand loyalty driver – omnichannel communication. Maintaining consistency in both marketing design and messaging across multiple consumer touchpoints is crucial while activating loyalty within the existing tech stack. Prudential Vietnam, a leading insurance provider across varied sectors, decided to open up this multi-channel loyalty avenue through PRUrewards. To enjoy the loyalty program, the customer needs to log in to his PRUonline account, then go to the PRUrewards tab to view his points, as well as, gifts and discounts from the program. Customers can access the loyalty program through the website as well as mobile applications on iOS and Android. While rewarding its most loyal customers with additional benefits was the key to this omnichannel loyalty application, the major driver of customer retention was the flexibility offered.
Insurance is already a very challenging industry in terms of attracting consumers in the first place. With PRUrewards, the company innovated to link non-insurance services with unique rewards across travel, food, and other industries. After joining the program, customers can engage by earning points and redeeming various rewards offered by well-known merchants such as Lazada, CGV, Grab and many other merchants. All members receive points based on various earning rules like annual premium, birthdays, new year anniversary and membership anniversaries. The system will automatically calculate all earned points. Thus, Prudential made a dull buy-like insurance delightful and exciting for its customers thereby increasing loyalty significantly.
Vietnam moving ahead in the brand loyalty direction…
While Vietnam is culturally unique in terms of buying habits that showcased a certain conservatism in the past, the digital boom of the pandemic in terms of online commerce has changed the game. Brand loyalty is now a crucial metric when it comes to determining the long-term success of enterprises and the right program can genuinely reduce customer churn like nothing else. Get in touch with our experts at Capillary Technologies to learn more about how to customize a loyalty program for your business.
by Capillary Marcom | Jun 23, 2022 | Digital Transformation, Ecommerce, Loyalty
If there were any questions about whether e-commerce is here to stay or not, COVID 19- the global pandemic has put an end to that debate. E-commerce is widely popular, and the competition is immense. So, how can e-commerce businesses differentiate themselves in such a crowded space? Great customer service and experience, like that at a brick-and-mortar shop, isn’t always enough to keep customers coming back! You must go beyond mere customer service to aim for customer loyalty but how can brands with e-commerce businesses start this? But how to make your customers loyal?
The online marketplace is transforming due to the shutting down of physical stores and is encouraging potential customers to shop more routinely online. In the digital era, hundreds of e-commerce stores across the web sell appealing products with marvelous services. And the list of options that your customers have where they can explore and rejoice is ever-increasing, making it tough to retain customers for lengthy periods. So, if all you’re thinking about is how marketing can fix this, go for it. But, trust us, you’ll need much more to improve your retention and conversion rate. Well, it’s no rocket science. One of the best ways to survive the intense online competition is by creating a loyalty-driven e-commerce strategy for your business.
Why Loyalty Programs Have Become A Necessity For Ecommerce Businesses
E-tailers launch loyalty programs to encourage repeat business by rewarding customers for sticking with the brand. Loyalty programs are critical for e-com businesses as the cost of customer acquisition (CAC) is high. The same can be recouped only if the customer stays with the brand for a significant period of time (Customer Lifetime Value). Given the fierce competition in the digital landscape, building brand loyalty for e-commerce brands is challenging.
Challenge for eCom brands while planning an eCommerce Loyalty Program
Usually, loyalty programs rely heavily on DATA (like transactional, demographic, and behavioral data ) to reward customers on a real-time basis, provide the ideal customer experience, and run relevant coupons, campaigns, etc. All this data is readily available to eCom businesses. However, the biggest challenge here would be transmitting this data to the loyalty layer seamlessly.
Ecom platforms are inherently complex tech infrastructures with multiple third-party integrations. If brands opt for another integration, especially with a third-party loyalty platform, it would be time-consuming and challenging. It may also potentially slow-down overall site speeds, resulting in loss of business. Hence, e-commerce businesses need a platform that offers a native loyalty layer that ensures minimal challenges in integration, and without impacting the existing business operations.
The Future: An integrated e-commerce and loyalty platform
Repeat customers have a higher lifetime value, which means that you can predict a high return on investment over the customer’s projected buying time with your brand.
| For example, if you spent $10 to earn a new customer and you know that over the course of time, they are likely to spend about $500 with your brand, then you’ve got a great lifetime value to CAC (Customer Acquisition Cost) ratio! |
The most significant benefit of a loyalty program is that it has the potential to align your whole business with your most profitable customer segment. Successful e-commerce businesses are aware of the need for launching a customer loyalty program. With an objective to minimize implementation risks, they are looking out for full-stack e-commerce providers who offer an integrated CRM + E-commerce solution. Capillary’s Anywhere Commerce+ with its full-stack e-commerce model (native platform + growth marketing + operations management) helps businesses make E-commerce work. . Successful brands are increasingly focusing on building their brand and owning the customer relationship while entrusting e-commerce to full-stack partners such as Capillary’s Anywhere Commerce+.
The combination of integrated CRM and full-stack e-commerce proves to be significantly beneficial for marketing & loyalty management teams as they can drive a seamless customer journey, unleash full platform capabilities due to native integration of loyalty and e-commerce layers, and reduce time-to-go live. Further, businesses can also shorten the learning curve as the integrated CRM and full-stack e-commerce partners such as Capillary’s Anywhere Commerce+ bring onboard significant intellectual properties gained from running E-commerce and loyalty for leading brands across multiple geographies. Also, it is cost-effective due to the bundled nature of the offering.
At Capillary, we’ve helped marquee retail clients like Indian Terrain – a leading men’s fashion brand, in integrating their e-commerce & loyalty layers to drive tremendous growth in a very short time. “The partnership with Capillary to deploy a full-stack e-commerce solution has been very successful to help us scale up very quickly as customers move to a digital environment. The uniqueness of this model is that it allows us as a company to focus on brand, product, marketing and consumer understanding while quickly scaling up e-commerce with all operations being managed by Capillary. This ECO-SaaS( EComm Solution as a Service) will offer brands and retailers a very quick and efficient pathway to scaling up their e-commerce businesses,” Charath Narasimhan, CEO, Indian Terrian.
Watch the video here – https://www.youtube.com/watch?v=nlHOtcTagBE
Unveil the entire success story of Indian Terrain here.
by Capillary Marcom | May 3, 2021 | Capillary
It is an open secret that brands invest significant revenue to nurture loyal customers (research shows over 70% of brands invest more than 2% of total revenue)— after all, a 5% increase in customer retention can increase a company’s profitability by 75 percent. Today more companies than ever have loyalty programs, estimated to be growing at 9% a year.
But there is another elusive type of customer that brands vie for even more – the advocate.
The term ‘customer advocacy’ should make brands lean in with rapt attention. They are the people who evangelize your brand to their family, friends, and colleagues. Customer advocates contribute to a higher CLV (Customer Lifetime Value), improve brand awareness, and they grow your revenue when they share the incredible experiences they had with your brand. Sound familiar? You might be wondering — aren’t all loyalty programs supposed to be driving higher sales and boosting brand affinity through positive reviews and word of mouth marketing?
In an ideal world, the answer is ‘yes’. A strong loyalty program must also drive customer advocacy. Even though there are more loyalty programs now, the number of customers who actively participate in them continues to remain at only about 50%, highlighting that there is scope for improvement in most programs.
Overwhelming evidence shows that Customer Expectations have changed in the last decade or so. Customers’ behavior and purchase journeys have become increasingly complex and non-linear, but unfortunately retailers are still stuck with a one-dimensional view of customer loyalty. According to research from a global tech consultancy, 97% of loyalty programs rely on transactional rewards, but 77% of transaction-based programs fail in the first two years. The harsh truth is the loyalty programs from the by-gone era simply don’t cut it anymore. To go beyond discounts, brands need to reward loyal members with memorable experiences. This creates an emotional loyalty to your brand far more often.
What Is Experiential Loyalty— and why does it work?
An ‘experientially loyal consumer’ is one who finds personal symbolic meanings in the act of consuming and investing in a brand, and engages around these meanings individually or as a community— in the pursuit of identity (as defined in a research paper by SAGE publication).
Experiential loyalty should go beyond transactions to focus on the larger customer experience and values. Its application can be found across various industries, from supermarkets to high-end fashion brands. For example, the popular American wholesale-retailer Costco charges an annual membership, but helps their die-hard loyalty customers make wise financial decisions beyond just groceries, by offering their own pharmacy, eyewear store, liquor store, fuel stations, and so much more. In more recent years, they’ve successfully been offering ecommerce options. Similarly, Indian companies like ‘Big Basket’ flourish by combining great price deals with the convenience of creating and delivering your grocery list.
Of course, not every grocery store can imitate Costco or Big Basket. But remember your favorite corner store as a college student, the one you could spend hours at with your friends? The memorable ones value their customers, and create experiences— whether it is by serving hot meals when we need it, or delivering groceries when we’re a desperate tied-up parent. Some brands, like US-Canada-based QSR ‘Panera Bread’, state their values clearly in their restaurants and online— making fresh healthy food, with emphasis on high-quality ingredients locally sourced from farmers. Recognizing the importance of omnichannel experiential loyalty, Panera offers a card-based loyalty program (an impressive 50 percent of company transactions occur on MyPanera cards) and a mobile app, and rewards its customers with free food items, tasty nutritious meal recipes, invitations to special events, and more.
The goal of experiential loyalty is to create a unique bond with your best customers by allowing them to enjoy exclusive experiences that are hard to replicate anywhere else. This could include anything from concerts, backstage passes, private events, celebrity meet and greets, personalized products, exclusive training workshops, and so much more. Experiential loyalty boils down to activities, not mere items.
In many cases, experiential rewards rely on FOMO — people’s “fear of missing out.” When people share their best experiences with their friends and family, either in person or through social media, it can powerfully motivate other consumers to learn more about your brand and experience it for themselves, driven by the fear of missing out or the yearning to be part of something exclusive. This grows your market reach by leaps, and your program instantly becomes more valuable. While transactional rewards and dollar savings attract consumers most frequently, it’s the experiential rewards that create long-term impact. The transactional rewards that most loyalty programs offer are rarely unique, but that’s not the case with experiential rewards. The experience your brand provides loyal customers must be different from what other brands can provide.
Combining transactional benefits and experiential benefits is the best way to engage the most consumers with your brand. And keep in mind that excessive transactional and discount-based rewards can have the opposite effect of experiential rewards— it will dilute the perceived value of the brand. Good transactional rewards make your customers feel smart, where experiential rewards let them feel special.
Here are some of the key points of experiential loyalty:
- Emotional Rewards: Create remarkable non-discount rewards, such as personalized experiences, value-driven engagement and exclusive services, to help customers feel appreciated and valued.
- Reflect your brand’s value: Align your brands values while creating experiences to attract the interests and passions of your customers. Understand the interests of consumers by leveraging relevant transaction history and a single view of the customer across all channels of interaction
- Unique Experiences: Unique brand experiences spark heightened customer engagement and build advocacy that permeates throughout a customer’s network, allowing you to build deeper relationships with your customers. Today, many customers (including 72% of Millennials today) choose to spend money on experiences over products
- Keep it exclusive, Optimize costs: Depending on how elaborate your reward is, experiential rewards can rack up a heavier cost than traditional transactional rewards. It may make financial sense to offer the high-end perks only to your very best customers — which also lends exclusivity to the experience. Less expensive experiences can be offered to lower tier groups, and the rewards steadily grow for each loyalty tier. Consumers who participate in top loyalty programs are 80% more likely to choose that brand over its competitors, and two times more likely to recommend it to others.
- Perfect Timing: Although often overlooked, timing in marketing (just like in comedy) should be perfected— especially by those with small teams and smaller budgets. Brands must be aware of any social movement affecting their products or their customer segments, and modify their message and product accordingly. Additionally, by leveraging digital data and engagement trends, brands must understand when their customers pay the most attention, engage, and make purchases. Marketers can also utilize technologies like geofencing, and send coupons, push notifications or engage when customers enter a certain location area.
Examples of Experiential Loyalty
Sephora: Although the beauty retailer Sephora began as a simple points-based loyalty program, it has now expanded to a community that motivates members to share tutorials, and engage with other makeup enthusiasts and professionals. Sephora’s mobile app even uses augmented reality so members can virtually test products on themselves. Sephora offers free samples of beauty products to loyalty members of all tiers, which strengthens their own loyalty program while promoting other brands. But perhaps the best aspect of Sephora’s experiential loyalty program? For higher-tiered members, they offer one-on-one makeup consultations with professionals.
The North Face provides their loyalty members with tailored rewards for their lifestyles. As part of their VIPeak program, customers can earn points through traditional methods like making purchases, as well as through less traditional ways like attending events, checking-in at certain locations, downloading the company’s app, and more. However, the most captivating factor of The North Face’s experiential loyalty program is the vast array of choices they offer when members redeem their reward. Customers can use their points toward unique travel adventures like mountain climbing in Nepal or excursions in Alaska.
Sony uses their Ultimate Rewards and ShowStoppers rewards program to take their customer experience to the next level. These rewards are larger than life experiences that allow customers to use their points to bid on various exclusive experiences, from Hollywood premieres, to sporting events, to sold-out concerts. Sony allows their customers a shot at making their dreams come true— if they bid the highest! This added level of gamification empowers the consumer to define their own value of an experience. All these factors have set Sony’s Loyalty Program a class apart.
Conclusion
Experiential loyalty really comes down to the fact that when you give customers a positive memorable experience, you create an emotional tie that keeps customers coming back for more. Experiential loyalty programs should offer tailored unique rewards to make customers feel important. This can evoke a much stronger and longer-lasting connection with your customer than transactional benefits— one that gets them to relive their happiness with friends and loved ones, and turn into an advocate for your brand.
The above study is jointly contributed by Maninder Singh (Business Head – Retail & CPG at Tech Mahindra), Suman K Shantaram (Store Consultant RCG Vertical Tech Mahindra), Gaurav Mehta – VP and Global Head, Alliances and Analysts Relations at Capillary Technologies and Rebecca George (Executive Copywriter at Capillary Technologies)
by Capillary Marcom | Jun 1, 2020 | Ecommerce
Malaysia’s ecommerce market is quickly becoming one of the largest in Southeast Asia. Its growth is outpacing that of traditional established markets in the region. This was apparent even before the impacts of the pandemic— Malaysia’s business-to-consumer e-commerce value increased 39 percent in 2019 alone. This growth in ecommerce has been coupled with the growing consumer preference for online shopping, and availability of customized payment options in recent years.
Malaysia’s tryst with Ecommerce started in 2004 with the launch of eBay Malaysia. This was followed by Lelong.com.my in 2007 – a C2C platform – that attracts more than 9.56 million visitors per month. The current state of Malaysian ecommerce market started taking shape In 2012 when two major players Lazada and Zalora launched their Malaysian operations, followed by Shopee in 2015. Fast forward to 2020, Malaysia’s eCommerce market is worth US$ 4.3 billion, and is expected to double to $8.1 billion by the year 2024; at 14% CAGR. Malaysia is now catching up to bring its e-commerce infrastructure, including product availability, payments, delivery and regulatory requirements, in line with more established online shopping markets.
Factors Spurring E Commerce Growth in Malaysia
At 82.3%, Malaysia has one of the highest internet penetration rates in south-east Asia. Ecommerce growth in Malaysia is primarily driven by a growing number of digitally-savvy, middle-class people who are looking for great deals and access to international brands. Here are the other major factors driving ecommerce growth in the region.
- Social Distancing and COVID-19 Restrictions: According to the Malaysian Communications and Multimedia Commission (MCMC), during the current pandemic internet traffic has increased by 30-70%. However, what is most encouraging is the Malaysian government recognizing this rise in ecommerce as a tool of inclusiveness, and has announced support for empowering local micro, small, and medium enterprises (MSMEs). This is predicted to further drive ecommerce in Malaysia. The Malaysian government has been proactive with these concerns through digital campaigns like “Buy Malaysia” and #SayaDigital to encourage local demand and empower Malaysians to surge the country towards a digital transition.
- Seamless Delivery Logistics: Traditionally ecommerce players in Southeast Asia faced logistical challenges due to the fragmented topology of the region dominated by multiple islands and dense jungles. However, Malaysia is segregated into only two major parts – Peninsular Malaysia and East Malaysia; which makes ecommerce logistics a whole lot more straightforward and cost-effective.
- Surge in Online Grocery Shopping: Similar to other countries in Southeast Asia, grocery & FMCG ecommerce is rapidly growing in Malaysia. In fact, Malaysia ranked 2nd in Statista’s world’s fastest growing grocery market list in 2018, with only Singapore registering a higher YoY increase. IGD Asia predicts that online sales value of grocery in Malaysia will increase at a CAGR of more than 60 percent between 2017 and 2022 (https://asia.igd.com/Portals/4/Asia-online-forecasts-free-download.pdf).
- Digitally-savvy consumers: Malaysia boasts of an incredible 140% mobile penetration and 85% internet penetration. More than 26 million Malaysians access the internet and 80% of users between the ages of 16 and 64 are already shopping online. Malaysia’s mobile commerce growth is outpacing overall e-commerce, projected to rise at a compound annual growth rate of 19.7 percent to 2023, to become a US$8.9 billion market.
- The Rise in Social Media: The lines between social media and ecommerce are increasingly blurring, thanks to several native shopping initiatives by Facebook & Instagram. Besides, social media serves as a great discovery and post-purchase platform for ecommerce businesses. As of 2019, Malaysia had 25 million active social media users which accounts for 78% of the total population. This digitally-savvy, upwardly mobile segment presents a massive potential customer base for ecommerce businesses.
- Preference for Digital Payments: Bank transfers dominate as the primary e-commerce payment method in Malaysia, accounting for 44 percent of all transactions. Consumers in emerging ecommerce markets typically steer clear of digital payments and tend to rely heavily on Cash on Delivery. This has been a roadblock to ecommerce growth in several regions like India, Brazil, Saudi Arabia etc, since COD imposes scalability challenges on ecommerce businesses. Malaysia is an outlier here with bank transfer and digital payments accounting for a whopping 93% ecommerce transactions and there are currently 39 businesses with an e-money license in the country, including major players PayPal, Alipay, WeChat and Google Pay.
- Government Assistance: The positive growth of the ecommerce industry in Malaysia will also be driven by the government’s National E-commerce Strategic Roadmap initiatives that strive to increase internet accessibility to rural areas and improve e-wallets technologies.
Key Ecommerce and Consumer Trends in Malaysia
The Malaysian ecommerce space shares a lot of similarities with other emerging markets in SEA like Singapore, Indonesia & Thailand. However, there are some interesting cultural and region-specific nuances to watch out for.
- Transactions Across Borders: Cross-border spending is high in Malaysia and accounts for 4 out of 10 of all e-commerce transactions in the country. The major motivators for Malaysians to choose international sellers brands are: better prices (72%), and access to items not available in the country (49%). The top three countries for cross-border sales are China (first), Singapore (second) and Japan (third). However, it should be noted that the Malaysian government has plans to announce a digital tax for cross-border e-commerce from 2020, which could impact international sellers of digital products.
- Mobile-First Audience: Consumers in Malaysia have been quick to adapt to mobile commerce and 80% of smartphone users now use their devices to shop online. Mobile ecommerce transactions in the region are expected to reach $5.6 billion by 2021. Within the mobile category, apps are the most preferred ecommerce channel and used for 64 percent of transactions.
- Affinity towards discounts: A report by Paypal found that Malaysians prefer online shopping primarily to save time and 90% of Malaysians expect their purchase to be delivered within a week. The second biggest factor that attracts consumers to shop online are cheaper prices. This could likely be driven by a rising middle class who faces comparatively high taxes and stagnating wages. This also explains why ecommerce events in Malaysia like 11.11 and 12.12 that offer higher discounts (as high as 90%) drive the highest sales in the Home & Living, Fashion, Health & Beauty, Accessories, and Mother & Baby categories.
- Ease of Digital Payments: Across Malaysia, bank transfer and digital wallets are the most preferred payment method. Interestingly, credit cards are the most preferred payment method in Penang (28%), Perlis (40%), Selangor (25%) and WP Kuala Lumpur (34%). Digital wallets, known as dompet digital in Malaysia, are the fourth most-used payment option. However, their usage is expected to grow at a CAGR of 53% by 2021, at which point it will take a 16% share of the Malaysian payments market. On the other hand, it is still advisable to offer cash on delivery (COD) as a payment method since the 45-54-year-old age group still prefers COD when shopping online.
- Social Commerce: The rise in usage of smartphones has also led to a spike in social media commerce, especially through WhatsApp and Facebook. The country is said to be the world’s fourth-largest market for social commerce adopters and a recent survey found that 87 percent of survey respondents had bought something through apps like Facebook, Facebook Messenger or Whatsapp.
- Competition Between Regional & International Retailers: The Malaysian branches of two online shopping platforms based in Singapore – Lazada and Shoppee are the leading websites in shopping traffic and both have close to 20 million visitors per month. Even as these two leaders expand their product offerings and services, other regional players, such as Indonesia’s Bukalapak and Chinese players such as Taobao and Ali Express are increasing their presence on the peninsula.
- Annual Shopping Events: Malaysians shop online in preparation for major holidays, especially Chinese New Year and Ramadan. They visit multiple ecommerce platforms weeks ahead of these celebrations to compare products and prices. Shoppers look for gifts to give to their family and friends on Chinese New Year, as well as beauty and fashion products for self-care. Besides this, Malaysia has three major annual national shopping events—Malaysia Super Sale (March 1–31), Malaysia Mega Sale Carnival (June 15–August 31) and Malaysia Year-End Sale (November 1–December 31). International discount shopping events Singles’ Day and Black Friday in November are also rising in popularity.
Malaysia’s Ecommerce Space
Malaysia’s top-three e-commerce sites by traffic are marketplaces Shopee, Lazada and PG Mall. The ecommerce space in Malaysia is dominated by self-owned, branded e-commerce websites and big online marketplaces. Here are the top ones :
How to Strategize Your Brand For Malaysian Ecommerce
Given its population size and increasingly affluent middle class, Malaysia is easily one of the most attractive markets for ecommerce in Southeast Asia. Here are some strategies that retailers and brands can use to leverage this opportunity.
- Offer a diverse product range – Concerns around product diversity have been a constant challenge for Malaysian consumers, and online sellers have the opportunity to satisfy this unmet need. The key to getting the right mix of products is to use AI-powered ecommerce platforms to understand the top products and accessories for each customer segment and dynamically personalize product pages for specific segments.
- Provide a wide range of payment options – While bank transfers are the most preferred payment option, retailers should also include e-wallets, credit cards, and COD to serve the wider audience. Merchants should reassure customers that they have all the resources to avoid problems like outdated payment methods, unreliable delivery and incidences of fraud.
- Offer superior fulfilment experience – 90% of Malaysians expect their online purchases to be delivered within a week. Allow customers to track deliveries in real-time, so they don’t have to guess the delivery dates. The key to offering a great shipping experience is to have a centralized inventory across your stores, warehouses and other fulfilment centres.
- Understand local nuances – There are certain cultural nuances that are specific to Malaysia. It’s important to know what Malaysians like to buy, and when. Understand the customs, traditions, and holidays that influence their shopping behaviour, and increase conversions by personalizing marketing engagement and conversions with customers using the power of customer segmentation.
While the ecommerce market in Malaysia is nascent compared to mature markets like China and Japan, it still represents one of the largest ecommerce markets in SEA. Malaysia stands out due to its relative size in the cross-border share of the ecommerce market. Malaysia’s youth population highlights the economy’s future potential as an e-commerce market. Malaysian consumers are often looking for great deals and access to international brands, but these trends may shift away if more local brands prioritize delivering superior customer experiences, products and prices than rival international brands.
by Capillary Marcom | Mar 23, 2020 | Loyalty
Gamification is the layering of games or game-like activities into marketing or business strategies with the intention of triggering human emotions that can lead to higher sales, customer loyalty and better engagement. When done right, gamification has been proven to induce powerful emotions like excitement, intrigue and happiness amongst the target audience.
One of the oldest and simplest forms of gamified reward program is offering a stamp each time you buy a drink. Get 10 stamps and the 11th drink is free. And who wouldn’t like to get a reward? Reaching a certain stage and getting something in return for it is exciting and fun. In the online world, earning loyalty points, progress bars and leaderboards leverage our natural instincts of curiosity and competition.
Nike has successfully created one of the best gamified programs through their running app Nike+. It tracks one’s running progress and their journey towards their goals. Each time you go out running, it pushes you to beat your last record besides connecting to your social media, so that you can either compete with your friends or show off to them. This simple but effective loop ensures continuous fuel to your competitive spirit. Nike+ gets more people out and running and thereby boosts the sales of Nike shoes. This is the psychology behind the success of this running app.
Starbucks is another example that uses a very successful gamification program for its loyalty and reward activity. When customers use their “My Starbucks Rewards”, they get a gold star when they order a drink from their mobile app. 5 gold stars earn them a green status and free rewards such as refills. When the user reaches 30 gold stars, they earn a gold membership with a gold card. This creates an elevated status and exclusivity. It comes as no surprise that the Gold Card is highly coveted and everyone wants one!
Types of Gamification
There are so many types of gamification designs, that it is difficult to cover all of them in one shot. For the sake of brevity, we have listed the most common ones :
The best way to keep people involved in a gamification program is to permit them to track their own progress. This type of gamification works when financial goals need to be tracked or for health and fitness programs. For service-based industries, progress tracking gamification works for educational content. When a user completes a course, a process can be set up, where the progress can be tracked, until the final goal is achieved. This is a great way of encouraging users and other potential customers to consume more content. Webinars, online content and video tutorials are all great use cases for the progress tracking gamification experience. Certain activities like attending physical events and downloading the company’s ebooks not only add value but give a sense of fulfilment to customers.
- Creating different levels of rewards
The Starbuck program shows how creating different levels of rewards creates an atmosphere of excitement, fun, curiosity and competition. The desire to upgrade from Green to Gold Membership is a great way of keeping users engaged and entice them to buy more coffee. Starbucks mastered the art of using gamification in their loyalty programs and hence they were extremely successful.
Gamification that is used in experiential marketing works very well for big brands that are already well known, who want to create positive feelings and a sense of trust amongst their customers towards their brand. Coke’s Bond 007-themed adventure that offered tickets to the movie Skyfall as the final prize was a classic case of experiential marketing. The viral video of this program that was shared on social media further helped to popularize this campaign.
- Interactive content with rewards
It would be very exciting if you could convert your entire website into a game. For instance, you could create a scavenger hunt where your readers or customers look for certain content or answers amongst your blogs, interactive videos or podcasts. These would be challenges presented to get your audience more involved, engaged and excited. This could also act as a motivator with a reward for the winner, in the form of free subscriptions, a discount or something else that could be of great value to customers.
Benefits of Gamified Reward Programs
Gamified reward programs offer a plethora of benefits for the brand, as well as to the customer, all wrapped up in a fun and interactive package. Apart from appealing to the competitive nature of consumers, it’s a great way to introduce new products to potential customers
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- Gamification provides a feeling of fulfilment and accomplishment with a reward at the end of each challenge. Customers’ repetitive actions not only create new habits but are also profitable to your brand.
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- Specific actions of customers can be analysed to find out how they would like to or prefer to engage with your brand. This could provide your business with valuable customer insights for the future, and help in implementing business strategies
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- A relationship can be formed with customers that go far beyond mere transactions. They can be encouraged to share their retail experiences on social media, create their own content and take gamified quizzes
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- Providing a gamified experience to customers creates lifelong moments and memories for them. Encouraging them to take up challenges and getting rewarded at the end of it could create unique retail experiences and encourage higher loyalty towards your brand
How to Gamify your Reward Programs
The concept of ‘play’ is deeply ingrained in the human psyche. It has a powerful influence over us because it goes as far back as our childhood and was part of our first interactions with the external world, siblings and friends. It came easily to us because it was fun, competitive and we got to learn a lot from these experiences. Businesses should strive to capture this excitement and involvement when it comes to gamifying their loyalty programs.
So, how do you move up to the next level by gamifying your reward programs? Here are some tips.
- Make your programs competitive and fun. Customers get interested and excited, only when the gamification is presented to them in a fun and enjoyable manner. Experiment with Leaderboard and Foursquare in your programs to keep customers engaged and interested.
- When customers are made to feel exclusive or a part of an elite club, they feel that they share a special relationship with a brand. This goes a long way in creating life-long relationships and loyal customers. The Starbucks case is a very good example of creating an exclusive club for customers apart from regular benefit.
- Offering great experiences as rewards can go a long way in creating loyal customers, such as concert tickets, Uber Money and Apple Music Subscriptions. A case in point is Verizon , which offers these perks to their customers and creates memorable experiences for them
- Invest in a loyalty program software that lets you reward customers for non-transactional behaviours like social media mentions, reviews, store check-ins, referrals and more.
Conclusion
From a brand’s perspective, the need of the hour is to encourage repeat sales, improve customer engagement and deliver a memorable retail experience. A gamified loyalty program is an ideal way to achieve all of these outcomes.
by Capillary Marcom | Sep 9, 2018 | Omnichannel Commerce
According to many retail industry experts, and talking heads, the Middle East and Africa region is going to be the next big growth market for ecommerce. The gulf region especially, is being touted as the market that’s set to grow exponentially within the next couple of years. Infact, according to PayFort, the Middle East ecommerce market would grow to $69 billion by 2020, almost doubling in size in just a few years. According to Statista, overall growth across the Middle East and Africa would be at a CAGR of 11% in the next four years (2018-2022).
Well this is all good, but what’s the current scenario of e-commerce in the Middle East? An oft quoted Gartner study stated that, in 2016, only 15% business in the Middle East had any online commerce presence and back then, 90% of online purchases made by residents were from foreign businesses. Forbes Middle East says that currently only 2% of retail in the Middle East took place online, despite the region having one of the best internet penetration rates in the world.
The potential for e-commerce definitely exists in the Middle East. Let’s take a closer look at the factors that are favourable for growth, challenges the region faces, key markets in the region, key players in these markets and buying behaviour of consumers in these markets.
Fueling e-commerce growth
The Middle East and especially the gulf region, benefits from high spending potential as the region boasts of a high per capita income. The fact that the internet penetration and social media penetration is also some of the best in the world means Middle East is ripe for online business.
A 2017 We Are Social and Hootsuite study says, UAE has the world’s highest social media penetration, while Saudi Arabia had the highest social media user growth in the world. Deloitte shared similar findings in 2017 which stated social media penetration of 99% in UAE and Qatar, and 73% YoY growth in Saudi Arabia.
The Middle East region has one of the highest social media penetration in the world with 99% in UAE and Qatar, and 73% YoY growth in Saudi Arabia
When it comes to internet penetration, the region is again, well above the global average of 51.7%, with more than 60% of the population using the internet according to Deloitte’s Going Digital Report. UAE especially leads here as well with more than 80% internet penetration in the state which is again, one of the highest in the entire world. If you look at the MENA region as a whole, the internet penetration there has been rising rapidly at 15% YoY. Smartphone penetration is also unusually high in the region. For example, in Saudi Arabia, 9 out of 10 people use a smartphone and most of them use it to go online. The great cellular connectivity in the region also helps.
High social media, internet penetration and connectivity is only one side of the story when it comes to the potential of ecommerce in the Middle East. Another side is favourable regulations for online commerce, especially in the GCC. Let’s take the case of UAE where the government actively participates in making it easier for tech businesses to operate out of the region. For example, in the UAE, new e-commerce regulations from the Dubai Free Zones Council were made to promote more foreign direct investment into the ecommerce sector in Dubai and help make Dubai, more attractive for ecommerce companies. The city also boasts of neighbourhoods such as CommerCity, which is a $735 million project that’s dedicated to ecommerce and located right next to the Dubai airport. This is apart from Internet City in Dubai, that according to reports is already full and is going to be expanded soon. Such initiatives are also under development in other countries in the GCC. What’s also interesting is the growing popularity of e-governance in these countries which shows how both the government and its citizens are very comfortable going online to get various tasks done.
Challenges to e-commerce
One of the primary challenges when it comes to e-commerce in the Middle East and the GCC is the lack of area codes, which can hamper last mile delivery. The big problem to solve for many ecommerce and logistics companies is to bring down the time and cost to deliver in the region, as most consumers have also suggested that the delivery time is the biggest deal-breaker for them when it comes to buying online.
Digital payments is another area where the region lags behind when compared to developed markets. Except for the UAE, other countries in the middle east are yet to completely adopt online and mobile payments. Cash on Delivery is still a primary mode of payment in the region, which brings up the cost of operations for ecommerce players. It can make up around 70% of all ecommerce transactions in Saudi Arabia according to consultancy Hall & Partners.
Markets that’re driving commerce in the Middle East
When we look at key markets in the GCC, two of them come into the forefront. One is UAE, the other is Saudi Arabia. In North Africa, Egypt is one of the biggest markets that has a huge potential to growth in the future. Although Bahrain, Oman, Kuwait and Qatar also have strong ecommerce presence and growth, the relatively small population in these countries means that their contribution to the overall region numbers is also relatively small.
United Arab Emirates
The UAE is one of the largest and most mature markets in the Middle East today for ecommerce. According to PayFort it was valued at $27 Billion in 2016. BMI states that by 2020, the market would be worth 45.6% of the total Middle East market. Great infrastructure, ease of doing business, and a tech savvy, cosmopolitan population with high spending power makes the country very favourable for online commerce.
Kingdom of Saudi Arabia
Saudi Arabia is also a huge market for ecommerce in the Middle East, with the same PayFort study valuing it at $22 Billion in 2016. Growth in the market though could be gradual when compared to UAE and other countries in the GCC. This is primarily because of lack of retail infrastructure and government initiatives that aim to promote ecommerce and other tech businesses. The ‘Saudization’ scheme by the government is also said to make it a little more difficult for international brands and businesses to make a mark in the country, although national businesses may get a boost due to this. By 2020, BMI says that the Saudi Arabian ecommerce market could be 29.1% of the region.
Egypt
Egypt has had a storied ecommerce history, having established some of the region’s firsts, such as online food ordering way back in 1999 with Otlob. Yet, ecommerce penetration in the country is still at a nascent stage. A study by the country’s Ministry of Communications and Information Technology (MCIT) said that, ecommerce only comprised 0.4% of the total retail trade in Egypt. But this is also set to go up very quickly, as the region has one of the largest population of internet users in the Arab world. The MCIT is also committed to the growth of ecommerce in the region, with policy and development being focused towards this cause, making the market very attractive for ecommerce players.
Who are the Middle East’s biggest ecommerce players
Apart from various brands and their ecommerce stores, there are a few prominent ecommerce marketplaces in the Middle East. The biggest is Souq.com, which had 50 million customers and operated out of all the countries in the GCC, when Amazon acquired them in 2017. The same year, another regional upstart, Noon.com was launched by Mohamed Alabbar, the chairman of Emaar. Namshi, Ali Express, and Ebay etc., are other prominent marketplaces in the region.
UAE: Souq, Nahel, Sukar, JadoPado
Saudi Arabia: Ali Express, Amazon, eBay, Souq
Qatar: Amazon, Lulu, Souq, IKEA
Oman: Lulu, Ali Express, Souq
Kuwait: Xcite, Ubuy, Souq
Bahrain: JadoPado, Alshop, Souq, Namshi
Egypt: Jumia, Souq
When it comes to food delivery, some of the popular players in the region are Talabat, Deliveroo, MakeMyMeal, Otlob etc.
Consumer behaviour in the Middle East
How many are buying online
According to survey portal Statista, ecommerce user penetration in the Middle East and Africa region stood at 54.6% in 2018 and would grow to 58.8% by 2022.
Who is buying online
PwC’s Total Retail Survey, 2017 took an in depth look at buying trends in the Middle East. They found out that younger people were more likely to shop online in the region, with 36% of those who were aged between 18-24 shopped online, at least once a month, when compared to only 13% of those who were aged 55 years or more. According to Hall & Partners, there is a significant number of women in the UAE who prefer to shop online, with around a third of those surveyed buying something online, every week. Similar stories are reflected across the mature markets of the Middle East.
Around a third of women in the UAE buy something online every week
Why are they buying online
The motivation to buy online differs for different markets and different demographics, however when we look at the broader trends, we can see that the lower price of goods online was the biggest driving factor towards an online purchase as 40% consumers stated that as their major motivational factor according to PwC’s Total Retail 2017. 31% also said that greater product selection was a factor towards their purchase. Suprisingly, only 17% said that convenience was a factor for shopping online. This could be mainly due to higher delivery times, and a prevalent ‘mall culture’ in the Middle East, although the trend is gradually changing as it becomes easier to shop online and as the quality of service increases.
What are they buying online
According to PwC’s Total Retail 2017, these were the major categories when it comes to e-commerce in the Middle East. Books, music, movies and video games category lead with 54% of those surveyed shopping online here. This was followed by Health and Beauty at 48% and Consumer, electronics and computer – 44%. Jewellery and Watches, Clothing and Footwear stood at 42% and 41% respectively, whereas Furniture and Homeware, Household Appliances stood at 35% and 31% respectively. Surprisingly, online groceries were a category that wasn’t as popular yet in the region with only 27% of people admitting to buying them online.
How are they buying online
56% of Middle Eastern shoppers were on mobile devices while shopping online and 52% of them were influenced by social media reviews while making a purchase. Although PwC states that 80% of Middle Eastern Ecommerce sales were paid for through Cash On Delivery, UAE is again an outlier here, as according to Souq.com, over 60% of their transactions were through credit cards.
56% of Middle East shops on mobile devices and 52% of shoppers are influenced by social media
Trust is an important factor for consumers buying in the Middle East as 62% of them were concerned about their personal information getting leaked online. 60% consumers were more likely to buy from brands they trusted, and 32% remain loyal to their favourite retailer because of their trust in the brand.
48% consumers had also stated that they were influenced to make repeat purchases because of the attractive offers that were communicated to them. Social media was another influential channel where 48% consumers were engaged through promotions.
Hence having a trustworthy, secure and mobile friendly online ordering platform is important in the region. Cross-channel engagement campaigns with strong social media strategies is also something ecommerce operations in EMEA must adopt.
Having a trustworthy, secure and mobile friendly ecommerce platform is imporant in the Middle East as 62% consumers were concerned about personal information being leaked online and 60% were more likely to buy from brands they trusted.
Future trends when it comes to Ecommerce in the Middle East
Localisation
Language and localisation are very important aspects of commerce in the Middle East as even the Arabic dialect can vary widely across markets. Brands have slowly started to understand this and have started to model their online presence according to each market’s preferences.
High Technology
The Middle Eastern market is also going to reflect similar tech trends as other markets across the globe, with increasing use of big data analytics, artificial intelligence, chatbots, faster delivery means, mobile payments, and omnichannel retailing, all used to aide commerce. With the increase of tech companies in the region, the sharing economy and subsequently, the internet economy would also see a significant rise in the Middle East. Cloud services are another area where the region saw rapid growth, with the market growing by 22% according to Gulf News.
The Middle East’s omnichannel future
With the young, tech savvy population, high smartphone and internet penetration and well established retail network, we can see that retail in Middle East is going to grow across channels. Ecommerce and brick & mortar retail would work at helping each channel sell more as more mature markets across the world have shown. Retailers today must focus on getting online and making consumer experience seamless and connected across all channels to unlock their next phase of growth.
How to go omnichannel in the Middle East
Being present across marketplaces
As a brand, it’s important today to have presence in the major marketplaces in the Middle East. Marketplaces such as Souq, Noon, Namshi, eBay, Amazon etc. can be a great way to reach more consumers and increase sales. Marketplace enablement solutions that help you to list, sell and process orders across multiple marketplaces, from a single dashboard, can make it very easy to do so.
Having your brand’s own ecommerce site
Ecommerce consumers in the Middle East are not just restricted to purchase from online marketplaces, but increasingly are buying directly from the brands that they trust. Hence it’s important to establish your own brand website early and extend your offline business to online channels. Today, you could be missing out on sales without having cross channel presence. Setting up your ecommerce website could be the first step you take towards making your business consumer ready for today and future ready for tomorrow. Let’s see what are some important factors you should take into consideration while choosing the right ecommerce platform for your website.
Making consumer experience seamless
You must ensure you are providing your consumers with the easiest possible purchase experience online. This means fast intuitive, responsive consumer websites and mobile ready ‘app like experiences’ on Progressive Web Apps. Offering multiple checkout options such as click and collect, or home delivery, is also important and so are seamless payments through the consumer’s preferred payment method.
Being ready to extend and grow
Your ecommerce platform must allow you to be agile and extensible so your business is completely future ready. Fast go-to-market time, multi-country, language, and currency support is a must have for running commerce in regions as diverse as the Middle East. Allowing business users to easily set-up and run websites and promotions without help from IT is also a helpful addition. Having ready integrations with POS, logistics, payment gateways, ERPs, etc. could go a long way into making operations smoother and easier.
Personalising experiences & socialising engagement
Consumers today expect relevant and personalised experiences while they shop. Your ability to deliver on these personalised experiences to your visitors, starting from the look and feel of your website, to the products that are on display to them could have a dramatic effect on conversions. Personalised engagements and promotions can also increase visits and sales. You also need to look into availability of services such as Conversion Rate Optimisation, Search Engine Optimisation, Digital and Social Media Marketing to reach your consumers and convert them.
Making your business easy to operate
An easy to use platform with intuitive UI that allows you to create, upload and manage product catalogs, website content, and promotions, with simple drag and drop functionality can help ease day to day operations by allowing any business user to make changes on the website quickly. A sophisticated order management system on the other hand can make order processing and fulfilment, quick and efficient. Ability to easily reconcile accounts, refunds and manage tax compliance across regions are also important while running ecommerce business across the Middle East.
Ensuring consumer trust
Finally, your ecommerce platform needs to be completely scalable, having the ability to auto adjust to handle any traffic or order volume. Having good stability and uptime is also important to ensure your site is always available to your consumers. Speaking of consumers, keeping private and identifiable consumer data and payment data secure is really important today, especially in the Middle East where trust is known to be a significant aspect of loyalty when shopping online. Hence you should give utmost importance to the security capabilities of your platform.
To understand more about your ecommerce opportunities, ecommerce technology or to get more tips and tricks on ecommerce, speak to an expert today.
by Capillary Marcom | Jun 16, 2017 | Capillary, Marketing and Engagement
On Friday, May 26th more than 50 CxOs from over 40 brands came together to Share, Learn & Decode at the Future of (Intelligence + Omnichannel} (FIO) in Gurugram. The Delhi leg of Capillary’s flagship event provided a great deal of “food for thought” to the attendees, thanks to the brilliant line-up of speakers who were present.
The panel discussion which was moderated by Fortune India’s Digital Editor, Mansi Kapur, included Anand Narang, VP-Marketing, Bata India, Ashish Agarwal, E-commerce Head & CIO, Pizza Hut, Karan Kumar, Head- Brand & Marketing, Fabindia as panelists.
Anant Maheshwari, President, Microsoft India delivered an eloquent keynote at FIO Delhi while Gunender Kapur, CEO, Vishal Mega Mart & Harminder Sahni, Founder, Wazir Advisors had a friendly conversation in a Fireside Chat at the event.
Decoding the future was the main concern in these discussions. The following are some of the key takeaways from them.
1) While Omnichannel is about providing a great customer experience, Intelligence is about making it relevant and personal
2) Today’s customers want the perfect integration between the digital and the physical world
3) Personalization, Conversational Commerce, Unified Experience, and Convenience are the 4 key factors a modern customer expects while choosing a particular retail point
4) The future belongs to the brave. It belongs to brands who have a long-term view and are ready to innovate, fail and WIN
5) Futuristic technologies will only become relevant if it works according to the context of the customers, their needs and wants
From order placement over voice recognition to AI lead business insights for decision makers, every new and upcoming technology that’s shaping the near future of retail was dissected. At Capillary, we’ve been fortunate enough to work with 300+ large brands across 30+ countries in helping them decode the Future. We are more excited now than we were when we started our journey 8+ years ago to build new products that will help brands leapfrog.
by Capillary Marcom | Jun 16, 2017 | Digital Transformation
This article was originally published on CIO Review May 2017 Issue.
Today, the success of retailers not only hinges on a seamless shopping experience but also how well consumer activity is tracked, recorded and used. Customers today have more power and choices than ever before, and expect the best user experience both online and offline. With these developments in the background, the retail industry today seems to be on the cusp of both industrial and customer revolution.
With its complex and diverse business processes and requirements, the retail segment has exhibited immense dynamism, despite which, the segment is faced with a myriad of challenges such as countering multiple disruptive technologies and increasingly demanding digital-customers.
Factoring in these developments with the swiftly changing environment, the CIOs and CXOs need to walk hand in hand with the technological and operational evolution. Needing to focus on changing the business rather than simply running the business, with a strong focus on innovation.
Revolutionizing the retail segment, there have been some retail players who have already looked out for their evolution. Aimed at getting future ready, these retailers are launching new store formats combined with multiple selling channels viz. Kiosks, Online, and Call Centers etc. They not only have multiple selling channels, but they are also offering seamless shopping experiences through every channel, transforming retail organizations into a truly omnichannel business. Having made the allowance for such evolution, there are certain technological trends that will continue evolving and leading the segment.
The Omnichannel Customer Experience
Customer experience is becoming a key differentiator for retailers, over price and product. Retailers continue to invest in newer channels and assess the ROI on each of them. However, with each additional channel, managing seamless customer experience across different touch points becomes progressively difficult.
Seamless customer experience across channels cannot be achieved unless one has a unified platform. That is the nexus for all customer experience. Many merchants realize the need for this; though most have admitted to not having the technological capabilities required to make it happen.
The disparate systems that operate in their own silos will no longer be preferred and with advancements in handheld devices and network infrastructure, unified systems on the cloud will evolve that will eliminate the need of multiple system integrations. Some of the forward-looking requirements are –
- Single identity across channels
- Unified order management
- Single inventory visibility across stores, warehouses
- Unified promotions, communication strategies, and channels
- Unified analytics and insights
O2O (online-to-offline and vice-versa) is an integral part of the omnichannel strategy. Amazon Go in the US and Myntra’s brand store in India are classic examples of engaging with the customers across channels seamlessly.
Big Data for Consumers
In the omnichannel retail world, fragmented analytics will not suffice. A natural expectation with technology would be to gather, organize and analyze all kinds of data, namely, transactional, behavioral, price changes, store staff performance, footfalls, stock management, campaigns, and loyalty etc. across channels. With fragmented analytics, data to action analytics may take several days, causing business loss to the retailers.
In order to reduce time taken to arrive at actions, industry is moving towards predictive and prescriptive analytics with actionable insights from traditional diagnostic analytics For e.g., if the performance of a store is going down and it is less likely to hit the monthly target, the analytics tool should be able to make the store staff aware and suggest several corrective actions to achieve the target.
Software in Customer Delivery
Catering to the ever growing demands of consumers, in terms of product and service delivery, is another aspect that the retailers are focusing on today. Using technology, these retailers are making efforts to reduce waiting time by providing real-time delivery options, choices of a time slot, notifications by emails and SMS’s etc. However, led by evolution, retailers are using software like field service management for before-time workforce scheduling. They are also using route optimization software for swift deliveries. Consistently adding value to their services, retailers are introducing new delivery options for various channels such as click and collect, premium same day service, hyperlocal, etc. Taking these services a notch higher, retailers have now started focusing on one-hour delivery services as well.
CRM and Consumer Engagement Solutions
The success of a CRM strategy will depend on the ability of analytics data warehouse to provide automated actionable insights and will have the above expectation of unified data. CRM intelligence such as segmentation/micro-segmentation will be further refined on the unified data to better understand customer behavior and customer triggers that drive them to make a purchase. As the customer migrates to a different channel, CRM will understand and adjust accordingly. The customer engagement solutions will understand customer likes/dislikes at a deeper level and suggest marketing manager’s necessary adjustments.
Different retailers will have different success rates on different channels. The channel communication cost and ROI will be a useful feedback to assess the tradeoff between incremental sales and channel communication cost in addition to the cost of the transaction. CRM solutions will also largely head towards personalizing channels and effectively managing customer experience across channels. The channel engagement strategy will be personalized heavily based on customer’s past purchases and behavior.
Serving Every Order Through Inventory Management
Technology innovations, such as endless aisle, and in-store Kiosks that allow customers to order products, which are no longer in store, keeps retailers from loss of sale, besides improving the breadth of their inventory. With such technology, out-of-stock situations will become history.
Enabling Multifaceted Customer Payments
Offering quality products, accurate products, timely delivery, and range of products to choose from, although play an important role in the success of any retail business, a seamless, secure and convenient payment option nails it. Corresponding to such demands, some retailers have now started accepting multi tender, multi-currency, coupons and customer loyalty cards online. They also link verified customers to transactions for efficiency and security. These endeavors by retailers are making payment process more agile and seamless.
The Emergence of Artificial Intelligence
AI has a dual role to play in the retail segment, while at one end it gives a deeper understanding of individual customers, on the other end it is also facilitating deeper reasoning of the overall business performance.
To give a better perspective on things, AI at the customer level, aids in offering a personalized experience, taking customer engagement to newer heights. This consequently adds to the number of sales and loyalty for retailers. Likewise, at a business performance level, AI technology is enabling retailers to identify the exact reason, hindering better performance, which further aids in better decision-making. With such continuous evolution, the retail industry is certain to take over leading industries in India, particularly in terms of GDP.
Online vs Brick & Mortar
One of the most common question these days: “who will win the retail battle – e-commerce or the B&M stores?” has divided the entire world with solid arguments on both sides, but we may not have a clear answer or prediction at this point. The future may not have a single winner, but the gap between the online and offline is reducing to provide the best of both worlds.
Bringing the Two Worlds Closer
VR and AR on the brands’ web-front and mobile apps give customers an alternative to the offline store’s ‘touch and feel’ experience’. Ability to see store availability of the products on websites makes the inventory management more efficient- this concept of ‘reverse showrooming’ has seen a rapid growth in recent times, especially in large appliances, jewelry, electronics and furniture industry.
Similar innovations are seen in the B&M stores where they leverage the online counterpart to enrich the offline store experience. Virtual mirrors, endless aisle merchandising, seamless checkout etc. will take customer experience at stores to the next level. For retailers, the ability to capture offline store purchases and user behavior data would be a huge leap in gaining deep customer insights.
Enhancement in In-store Shopping Experience
The new technologies like Artificial Intelligence, Computer Vision and Deep Learning will drive a radical shift in the way we interpret and capture data from the offline world, which until today was a big void for the offline retail managers to fill. There are many ways in which the offline or the in-store experience can be seen evolving in the near future.
The store traffic data will help brands plan the store staffs at the stores by predicting when and which stores will expect how many visitors, thereby providing better customer experience. It can also enable retail managers to tweak their sales pitch and optimize the merchandise and aisle placement by understanding the conversion rates across demographic segments and traffic hotspots within the store. At an individual level, the technology is not too far from correctly identifying a customer in the store’s vicinity, thus providing the store staff with a very customized and targeted guidance/instruction for every customer.
In totality, the way forward for the retailer is very clear- Technology. In the generation of an omnipresent consumer, being omnichannel is no more an option, but an imperative need. By focusing on a single channel, retailers stand to lose customers, and without being able to track their own customers they may be unable to provide a personalized shopping experience that today’s consumers demand. This lack of insight may also lead to delayed business decisions. By implementing these technological breakthroughs in their business, retailers stand to fulfill customer expectations and provide a rich and seamless buying experience, irrespective of channels. Retailers also gain from valuable insights that allow them to make informed decisions, which result in profitability and incremental returns.
