Online retailers and brands have long been asking for an email address upon signup or login on their  websites. And why not? It enables the establishment of a relationship with customers and push for sales through email marketing. But as the global usage of smartphones increases, the focus of businesses should move towards mobile, and it is customer phone numbers that hold the future potential to better target online shoppers and track their behaviour.

Phones these days are no longer reserved for only voice calls or text messages. With smartphones, the internet is accessible at any time opening up new ways for customers to interact with businesses – they can research and browse for products, call or text and make purchases all on a single device.

Southeast Asia has quickly become a mobile-first region with nearly 800 million mobile connections which constitutes to 124% penetration of the general population.

Every fourth person in the region has two mobile connections.

And smartphone subscriptions are increasing. By 2021, they are expected to pass 100% of the population in Malaysia, Thailand, Singapore and Vietnam, while in the Philippines and Indonesia, they will more than double.

Smartphone subscription in “mobile-first” Asia is rising. Source: South East Asia and Oceania Ericsson Mobility Report, June 2016

What are the benefits of capitalizing on phone numbers?

1. SMS marketing has higher conversion rates than email marketing

Email direct marketing (EDM) is still one of the most effective tools to boost sales as 48% of online consumers in Southeast Asia have made a purchase as a result. However, it is becoming a crowded space – if every ecommerce player asks customers to sign up for a newsletter, the customer inbox fills with several emails all pushing them to buy. 

According to popular email marketing service MailChimp, of all ecommerce emails sent 16.7% are opened, but the click rate is only 2.36%.

SMS marketing, on the other hand, is more efficient as 99% of text messages from brands are opened and the click rate is nearly 20%. While emails tend to get lost in a crowded inbox, the chat-loving Southeast Asians rarely miss an instant message.

Online marketplace Orami is one of companies in the region which actively uses SMS marketing to get its message through to customers. Orami sends text messages with promotions to its clients approximately every two weeks. They contain a link and promotion that encourages customers to shop on Orami.

Online marketplace Orami regularly sends its customers text messages with latest promotions.

2. Phone numbers enhance ad targeting precision

Phone numbers can easily be used for the same purpose that email addresses are collected for by advanced online marketers. They can be uploaded to a platform such as Facebook or Google Adwords that allows mapping to its corresponding user profile to send ads to a specific audience.

Two years after the eye-popping $22 billion acquisition of WhatsApp by Facebook, the social network revealed its true intention – to gain access to WhatsApp users’ phone numbers to better target ads.

Facebook is also using other tactics to obtain more phone numbers by forcing usage of its Messenger app that can be activated only with a number verified with One-Time Password (OTP). In addition, new users now can sign up for Facebook with their phone numbers.

Facebook has been actively pushing to get phone numbers from its customers – one can now sign up with a mobile phone number for a Facebook account.

By adding phone numbers to its extensive database, Facebook will improve its ad targeting capability and remain a highly attractive advertising platform. Ecommerce businesses could separate their own large phone number databases into different sectors depending on interest, channel of acquisition, gender or other to improve campaign performance and sales.

3. Phone numbers more convenient than emails

In Southeast Asia, more than 85% of adults own a mobile device, whereas many don’t own a computer.

An older colleague once told me she wasn’t able to make a purchase online because she forgot the email address registered earlier by her daughter and couldn’t sign in. Still few marketplaces offer a guest checkout option and even if they do, they still request an email. India’s leading ecommerce player Flipkart last year made a bold move by requesting mobile numbers once they realized only 12% of India’s computer users knew how to use email.

Flipkart, one of India’s top e-commerce players, allow users to register with just a phone number.

Flipkart noted this change would ease the signup process as well as simplify password recovery, the reset process and add an extra layer of security.

4. Better customer behaviour tracking across different channels

For businesses that operate offline and online, using a phone number as a customer identifier allows tracking of behaviour across channels.

Tops Market in Thailand, which has brick-and-mortar shops as well as an online store, recently began using phone numbers to identify customers instead of loyalty cards for point collection. If a customer forgets his loyalty card, he can simply tell the cashier his phone number and Tops Market will record the purchase history.

The retailer can identify whether this particular shopper prefers to shop online or offline, how often and what he is buying throughout the week, the month, the year. Having this data allows the retailer to then create personalized emails or SMS targeted to this shopper and those similar to him and improve click-through rates by an average of 14%.

Connecting all these behaviors across channels will enable businesses to gain insight about their customers in an unprecedented way.

Higher conversion rates, precision of ad targeting, and tracking customer cross-channel behaviors are the benefits that will drive adoption of a phone number as the main customer identifier in the future. Ecommerce players who will be able to fully capitalize the phone number will have a far greater advantage than competitors in acquiring new customers and retaining existing ones.

 

By Koravut Pavitpok, aCommerce Internet Marketing Manager

 

What works best for your business – email or SMS marketing?
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