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.
by Capillary Marcom | May 18, 2017 | Digital Transformation
This article was originally published on the Seamless Asia blog by Capillary.
With over 2 billion internet users, Asia is on the cusp of an omnichannel revolution. At the other end, artificial intelligence is getting consumerized. The convergence of omnichannel + intelligence will significantly impact retailers and brands. Artificial Intelligence is being touted as the next biggest innovation since the advent of the internet and mobile technology. AI promises to enrich various aspects of our lives through self-driving cars, smart homes, and even medical diagnosis. Countries such as India, China, South Korea, Japan, and Singapore are leading the way in AI research. China now boasts of having more cited publications on Artificial Intelligence than the United States.
Though some of these technologies are still a few years away, a few applications of Artificial Intelligence are already automating and enhancing the way businesses operate. Since big-data has been in focus for quite a while, most businesses have made it a point to collect a large amount of data on every aspect of their operations. The challenge now is in making sense of all this information.
AI comes to aide in the analysis of this data and makes predictions on the outcomes of different actions. This will not only help retailers engage with their customer in new ways but also allow them to take important decisions quickly. Retail is one sector where Artificial Intelligence has immediately found acceptance. According to a study, 77% of UK retail directors think that AI, deep learning, and machine learning implementations will have a tremendous impact on their businesses with 23% claiming they’re already seeing results.
Let’s look at 5 game changers at the convergence of {Intelligence + Omni-channel}:-
Intelligent Recommendations
These days, consumers are overwhelmed by all the different communication they receive from various brands, through multiple channels. If the message delivered isn’t relevant to them, they usually ignore it. Since most brands already possess extensive demographic data, behavioral and historical aspects of their customers, AI can be used to predict their needs and wants. Through Artificial Intelligence, brands can provide accurate, relevant product recommendations to customers which are guaranteed to spark interest and bring about conversion. AI will even take into consideration factors such as the weather conditions, time of day and day of the week to deliver the right recommendations, something a human being could never do.
Social ChatBots
Artificial Intelligence is also being used to assist a customer through their shopping journey which often comprises of various channels, be it social, mobile, web, and in-store. The store assistant can only help the customer in a physical store, but through ChatBots, brands could intelligently interact with their customers no matter where they were. Brands can send product recommendations, solve delivery issues, help locate unavailable products, and guide their customer through the various channels they operate inefficiently through AI. In the near future, brands should start moving segments of customer experience over the ChatBot.
Personalised Commerce
The concept of individualism is becoming increasingly popular in Asian cultures. Brands are starting to realize the need to build individualized experiences around each customer in order to drive engagement. Artificial Intelligence helps brands analyze available customer data in order to segment customers into various behavioral groups. Through this, they can determine the right factors to deliver a positive purchase experience. For example, an eCommerce website could display personalized landing pages with the colors and fonts that a particular customer would prefer, and so on.
In-store Vision
Most retail stores already use CCTV cameras as a theft deterrent. AI can help stores analyze this camera footage to improve their customer journey. Through the analysis of visual data, retailers could determine the path a customer takes within their store. With this information, retailers can design their spaces in such a way as to maximize time spent in the store. Retailers will know which section sees the most and the least visitors, what products a particular customer puts in their cart and what they usually place back on the shelves. The technology could even be used to notify store assistants to help any customer who is stuck in a particular place within the store. This application of AI enables offline retailers to track a customer through their journey just like how eCommerce retailers would track clicks a customer has made.
Informed Business Decisions
Business leaders have often used a combination of available information and their own gut feeling to make decisions. Today, there is a plethora of information at the hands of any decision maker which has made businesses grow increasingly complex. Often due to delayed reporting and analysis, important insights are missed and the right decisions may not be made on time. Through AI such as Capillary Artificial Intelligence Retail Assistant (AiRA), business leaders could receive real-time insights on the business performance, market performance, and market opportunities. They could also receive strategic suggestions that would resolve the director from just following their gut.
Through Artificial Intelligence, retailers and brands are taking their advertising and marketing efforts to unprecedented heights. Acting as the last piece of the big data puzzle, according to CBinsights, in 2016, AI saw investments of more than $5 billion worldwide. Today, the brands who aren’t already researching or employing AI would be operating at a disadvantage
by Capillary Marcom | Mar 23, 2017 | Marketing and Engagement
“The next phase of the technological revolution in the customer experience front will be that of chatbots. Chatbots are intelligent chat agents coupled with AI to engage the consumer in a meaningful and engaging way, mapping exact customer needs.”
Abhijeet Vijayvergiya, VP APAC, has built Capillary’s growth engine from the grounds up and has been driving the growth momentum across markets. Abhijeet has directly contributed to significant customer wins while building and mentoring a high performance team which has steered the company to become a leader in the engagement and commerce space in Asia. He offers consultation to leading brands across Asia in building their Customer Engagement and Digital transformation journey and also leads some of the large global relationships for Capillary
Are there reasons to believe that omnichannel retailing is here to stay?
Absolutely! Omnichannel retailing in India is no more a hypothesis but a reality. With time, more and more retailers are realizing the importance of being omnipresent to serve an omnipresent consumer. With customers getting hooked to hyperlocal deliveries, every physical store is being turned into a distribution center. As of today, 2% of all retail is powered by omnichannel. This number is expected to reach 8-10% by 2020.
How has the retail ecosystem changed in the last one year when a lot of consolidation happened in the online/offline space?
It has come out quite strong. The retail market has never been as volatile as it is right now, and retailers are slowly realizing that to be connected with the consumer requires an omnichannel strategy.
Now we see more and more tech investments happening to keep up with consumer needs and to be able to serve them better- whenever they want and whatever they want. And it seems to be working because there is a decreasing trend of discounts, which signifies increased customer loyalty.
India is still far from using AI in retail. Do you think that will create significant limitations for brands and retailers?
I don’t think that’s true. The Indian retail scenario is very open to the idea of AI & AI-based systems. AI is next-gen technology. You’ll soon be seeing it get integrated with everything; from a fan in your room to the way analytical reports and dashboards are done today.
At Capillary, we work on the belief that retail will be transformed with the advent of AI. So much so that we are currently working on AI-based systems for intelligent insight reporting.
The next phase of the technological revolution in the customer experience front will be that of chatbots. Chatbots are intelligent chat agents coupled with AI to engage the consumer in a much meaningful and engaging way mapping the exact customer needs.
When would India see technology- enabled shopping minus any handsets or physical presence around the stores?
Any adoption of a new idea has never been so quick in India. For example, India is now the largest Facebook user base. It is the number 1 country in terms of play store downloads.
Newer touch points for consumers other than a laptop/ tablet/smartphone are Smartwatch, Xbox, TV, Google Home, Amazon Echo, Amazon Dash.
You can book a cab even today with Google Assist. For the non-smartphone interface to work, there are a couple of things needed. Availability of device, for instance, is primary. According to International Data Corporation (IDC), though the wearables market in India is still at a nascent stage, over 5.67 lakh units were shipped in the second quarter of 2016, which is up by 42% in the first quarter. During the same period, India also accounted for about 1% of the global share of the smartwatch market as reported by IDC.
Even supply-side growth comprising sellers and marketplaces building an interface on top of infrastructure is picking up very well with the likes of HDFC ergo building an iWatch app for purchasing insurance, leading cab company enabling booking of cabs through iWatch. In the next 18 months, a chunk of early adopters will embrace non-smartphone based shopping in India.
by Capillary Marcom | Mar 22, 2017 | Capillary
Author: Varun Jain
In a turn to acknowledge the true makers of the retail industry, omnichannel and commerce-platform solution provider Capillary Technologies recently tied up with retail industry bodies Retailers Association of India (RAI) and Trust for Retailers and Retail Associates of India (TRRAIN) to launch Capillary Scholar: a program aimed at providing a springboard for the retail store staff to graduate and climb the ladder in their career, empowering them to realize their true potential.
The scholarship program aims to fund bachelor programs in business administration (BBA) for 50 retail associates.
“The program aims to support retail associates so that their lives change for the better. Education is synonymous with empowerment and this is a small step towards the betterment of retail associates,” said Aneesh Reddy, co-founder and CEO at Capillary Technologies.
“We are proud to launch the initiative on Retail Employees Day (RED), a day dedicated for all the ever smiling store associates who make every shopping experience, a happy one”
According to BS Nagesh, founder of TRRAIN, the retail industry employs over 43 million people making it the second largest employer in India.
“Capillary Scholar program is in line with TRRAIN’s vision of empowering people in retail and working to achieve immediate and lasting change in the lives of retail associates in India. I wish Capillary Scholar Program grows leaps and bounds and touches thousands of retail associates,” Nagesh said.
“I believe Capillary Scholar program is a small step in creating knowledge-led manpower in the retail world,” feels Kumar Rajagopalan, CEO at RAI.
by Capillary Marcom | Mar 22, 2017 | Analytics and Insights
Curious about our customers, we recently conducted a study that revealed what online shoppers buy after 9pm in the evening.The study had taken into consideration top ten cities based on visitor count, including New Delhi, Bengaluru, Mumbai, Kolkata, Hyderabad, Chennai, Pune, Lucknow, Noida and Ahmedabad.
In the process, we realised that contrary to popular beliefs, the night shopper actually preferred desktops over mobile phones while shopping online. Even though 50% of total online shopping happens over mobile phones, desktops still rule with users spending 10% more time on it than the time spent on mobile phones. Buyers would also visit around 17% more pages on their desktops during the night.
Apparels
In terms of apparel shopping, women were found to be far more active than men during the night, accounting for 63% with conversion time peaking between 10pm – 11pm. Moreover, while 18 – 34 year olds comprise the major chunk of online shoppers (more than 50%) at the same duration, a sizeable 35% of the shoppers are in the age group of 35 years and above.
CDIT (Consumer Durables and Information Technologies)
Here, we found men to be far more active shoppers than women at 72%, with visitors peaking at 9 pm. 50% of the shoppers are between the age group 18 – 34 years, while 22% are of the age group 35 and above.
Cosmetics
Interestingly, the average purchase value of cosmetics is 1% higher during the 9pm – 9am slot when compared to 9am – 9pm one, with 76% women and 34% men active, peaking between 9pm – 11pm. The survey revealed a surprising insight: people above the 65 year age bracket actively shopped for cosmetics, while 18 – 34 year olds formed the major portion of online shopper. About 15% of shoppers were over the age of 35 years.
Groceries
We saw that the bulk of grocery shopping happens in the morning between 9am – 9pm, after which, the purchase value drops by 8% with women and men being equally active, thereby accounting for a 50 – 50% ratio. In terms of a demographic split, 18 – 34 year olds constituted more than half of the total shoppers while 34% of the shoppers were seen to be between the age group of 35 – 65 years.
Sports
Given the sheer number of visitors that sports goods entail, they see their maximum conversions between 11pm – 2am with 73% men and 27% women active during the night. Fitness has become a rising concern and is one testified by the 65 year olds who are also active buyers of sports and fitness goods. Of course, 18 – 34 year olds still form the majority proportion of nocturnal shoppers.
Speaking on the survey findings, Abhijeet Vijayvergiya, VP and Business Head, India and South-East Asia, Capillary technologies, commented “While several studies have been conducted in the eCommerce domain, most of these looked at consumer buying behavior during the day and many have derived the conclusion that the mobile phone rules over the desktop as shoppers are increasingly switching over to the former. Brands then adopt a mobile first strategy to retail their products over the internet. Our survey revealed a different reality altogether, with good old desktops toppling mobile commerce during the night and, contrary to the general assumption, both men and women are more or less equally active at the same time, across all age groups.”
Additionally, both the genders are completely category agnostic, shopping for everything ranging from apparels and groceries to sports goods during the night. We hope to bring out more such interesting studies in the coming times.
