20 July 2018
Multi-channel E-tailing World Set for Intelligent Computing Makeover
While e-commerce is still seen as in its infancy by many, the sector is on the verge of a wholescale revamp as AI, IoT and a range of customer relationship management tools are to be deployed to make it match-fit in the multi-channel world.
Setting the tone for eTail Asia 2018 – an event that bills itself as the "E-commerce and Digital Marketing Conference for Asia's Leading Retail Innovators" – Steve Carlile, Global Head of Nu Skin's Digital Center of Excellence, said: "The Asian ecommerce market is set to double by 2020. This is partly because the region is home to 1.5 billion millennials, the most significant purchasing demographic, with their spending patterns now being adopted by Gen X consumers and even Baby Boomers.
"With the global e-commerce spend now US$272,000 a second, Asia – a region where 79% of all consumers are digitally-connected – is accounting for an ever-expanding proportion of that. At the same time, would-be Asian purchasers are getting more and more clued-up. Typically, they spend at least 50% of their shopping time on online research, while an adverse comment by a member of their social media network has led 53% of them to reject a particular product.
"With all of this in mind, brand-owners need to be aware that it's now a 24/7 market, one where customers don't clock out at 5pm. Wait a few hours or until the next working day to respond to an inquiry or an online comment and you may miss out big style – with 71% of customers already believing that most online vendors don't work hard enough to retain their business."
Again emphasising the importance of prompt action in the online world, Chen Peng, Asia Regional Vice-president for SessionM, a Boston-headquartered specialist in customer data management, said: "If you take too long to act on data, the customer will have already moved on. A real-time rule engine controlling your data warehouse, while processing real-time transaction data in order to provide timely and targeted offers, is the way forward. It's all about hitting the right target, at the right time, with the right offer.
"In the case of a fast-food franchise, for instance, once any customer data has been collected, passed to the marketing team and then analysed, it can still take up to nine weeks before any promotional campaign is ready to be rolled out. By that time, the customer has moved on and the data is only of historical value. In order to get around this problem, you really have to change the paradigm.
"Say the customer in question has only bought a burger but, before he leaves the outlet, he receives an offer on his mobile for a discounted drink. We can already make such a scenario a reality. The tools required to boost revenue via intelligent, targeted, and personalised marketing are already in place."
While acknowledging the high level of e-commerce penetration throughout the Asia-Pacific region, it was also noted that many conventional retailers were still struggling to migrate online. Outlining how his own company had made the leap, Koen Besteman, Ikea's Head of E-Commerce for the Southeast Asia region, said: "It wasn't easy for a traditional retailer like Ikea to make the move into e-tailing. Its whole approach, after all, was geared towards the in-store experience. In order to be successful online, we had to change the touch points we offered our customers, integrating digital channels into all of them.
"Within Southeast Asia, to date, we are only online in Singapore, but we have learnt a number of lessons by tracking the typical purchase path of local consumers. We've found that 80% of customers visit our website before visiting our store. It's also become apparent that 40% of those that actually buy online, go to a store first. In light of this, it became apparent that the experience must be the same regardless of the channel."
While, for some consumers, purchasing online remains too much of a cultural and technological challenge, the e-tailing sector itself is also having to cope with a certain degree of uncertainty. In particular, smart computing – Artificial Intelligence (AI), Virtual Reality (VR), Augmented Reality (AR), the Internet of Things (IoT), machine learning and a suite of new Customer Relationship Management (CRM) tools – is poised to transform this still-nascent industry.
Outlining the scale of the coming change, Juancho Jerusalem, Regional Vice-president of Salesforce, a Singapore-headquartered CRM specialist, said: " By 2020, there will be 50 billion connected devices worldwide, 6.6 for every man, woman and child. In the developed markets, the figure will be closer to 10. This presents a real challenge for online retailers, with 82% of all shopper journeys likely to span multiple channels. In order to track customers across these ever-more varied online routes, 57% of companies are already relying on AI, believing it to be essential in an increasingly multi-channel world."
Another speaker to single out AI technology as likely to play a pivotal role in the future of e-tailing was Mikael Lindholm, Internet of Things Vice-president of the Telenor Group, an Oslo-headquartered mobile services provider. Outlining just what the technology brings to the party, he said: "In a crowded room, even now, AI is able to identify individuals by age, gender, speed of movement and even mood. The challenge for retailers is how to use this kind of data to drive sales.
"Properly harnessed, AI can predict customer needs based on past and present behavior and thus optimise a brand's approach to any individual purchaser. Voice recognition, too, has role to play and could prove hugely effective in boosting purchasing in particular environments, with cars being the most obvious example.
"Those looking to how it should be done should look to China, with the country having taken a clear lead in the e-commerce space. Last year, for instance, Alibaba's 11/11 sale resulted in transactions worth some $25 billion in one 24-hour period, a 40% increase on the previous year. By comparison, the US' Black Friday, which took place just a few days later, only generated sales valued at $5 billion.
"China is also taking a lead in other aspects of the sector. Same day delivery via drone is now a reality, while the ubiquity of its cashless payment systems is unmatched anywhere in the world. Indeed, just about everyone, even a roadside charity worker, relies on one mobile payment app or another when it comes to paying for their daily needs."
While the majority of speakers majored on the importance of creating a genuine synergy between on and off-line channels or the prerequisites for taking a High Street retail brand into the digital space, Marc Woo, Head of Google's e-commerce, travel and financial services division, maintained that such concerns should already have been consigned to history. Asserting the online and offline worlds have already covertly merged, he said: "Back in 2001, Asia's e-commerce market didn't exist. This year, the region's e-commerce market will be worth $18 trillion or around 25% of all retail sales.
"With online sales in this market up 26% year-on-year, compared to a rise of just 6% in the offline sector, it's clear that conventional retail outlets are under threat. E-commerce, though, will never take over the whole of the retail sector.
"At present, consumers are going online to search locally – asking where is the nearest fashion boutique or which is the closest mall that is still upon. Once their queries have been answered, 75% of consumers will go to the business their search identified within 24 hours. These consumers are also 25% more likely to actually make a purchase and spend, on average, 10% more when they do so. It is this interdependency between offline and offline and the blurring of the lines that represents where we are right now."
eTail Asia 2018 took place from 6-8 March at the Sheraton Towers in Singapore.
Ronald Hee, Special Correspondent, Singapore