Data analytics is the process of collecting and utilizing data to identify patterns to aid a specific function. It’s a field that encompasses a lot of what digital marketers do – tell stories about consumer behavior.

Analytics reveal which channels, campaigns, keywords, or target audience are top and flop performers, which are all critical to improve the bottom line for online businesses. Despite this, a solid analytics setup and understanding are very often overlooked- this applies to even the biggest names in the industry.

While these companies may spend a staggering amount of dollars on marketing, findings from E-Nor, a US based digital analytics consultant, suggests that analytics is an area where there is under-investment of money and time.

Only 3% of the biggest global brands are using digital analytics correctly.

Source: E-Nor

E-nor’s optimization framework below shows us a bottoms-up approach to grow any online business, where the peak of the pyramid represents success.

Source: E-Nor Optimization Framework

Obviously, business impact at the top means different things for everyone – it could be driving online sales, leads, traffic, ad revenue, or something else altogether – but in order to climb, a business must have a great product and strategy at the foundation.

The focus here is a sound strategy. There is very little point in investing in analytics and optimization without it and only after developing a clear road map and setting KPIs is it time for execution.

What could go wrong?

The three stages that build on the foundation are what veteran marketers find the kryptonite of many online businesses across Southeast Asia: implementation, reporting, and analysis.

Installing web analytics tools like Google Analytics (GA) properly is one thing, but setting up the account and understanding what the output means is a completely different skill set. GA is an insightful tool but can only be as accurate as its implementation.

Imagine if GA was installed in the wrong place or triggered at the wrong time on the website, it would be dangerous to rely the entire business on this data because according to the upstream of the pyramid, poor implementation cascades to poor reporting, analysis, optimization, and in turn affects the business as a whole.

Too often do businesses try to jump straight into ad or web optimization before ensuring the data captured is accurate or if the right metrics are being tracked.  

The focus here is actually a key framework that outlines the entire scope of data analytics that can be structured into these 5-steps:

  1. Audit
  2. Implement
  3. Training

  4. Analyze

  5. Visualize

Demand for all these five components has been growing audibly in recent years, but there is a shortage of talent equipped with the experience and expertise in such niche skill-sets, particularly in Southeast Asia.

Source: aCommerce Analytics

Audit & Implementation

“Data hygiene” doesn’t take care of itself, it requires constant maintenance. In order for GA to track how much traffic and conversions a website is generating, GA tags must be placed wherever these “events” can happen using Google Tag Manager.

For example, if you have a separate mobile site or a website in multiple languages, failure to place tags on all these versions and platforms is an instant red flag. It would mean that reports would be based solely on either desktop traffic and conversions, or collect data coming in from only a Thai version of the website.

A website and its visitors are also constantly changing, mandating a QA process to ensure that those changes do not affect how your analytics tags respond and fire. Since the tags are capturing data directly from the website code, any changes to this code may result in unpredictable and undesirable outcomes.

Once tags are properly implemented, GA account settings need to be tailored to accommodate the features of each website. These tweaks include referral exclusions, spam filters, channel grouping, and AdWords linking. They not only result in more accurate data, but also a cleaner view of data.

Whether it’s having someone audit your current setup or setting it up from scratch, recommended practice is to do this right from Day 0, because the bulk of the data in GA is dead as soon as it has been parsed, meaning there is very little room to retroactively adjust past data.

Once setup is up to standard, we have peace of mind to trust incoming data and derive actionable conclusions from the numbers.

Training

With quality data flowing into GA, the next sensible step is to provide training for those who rely on it daily. GA reports consist of four main components (AABC): audience, acquisition, behavior, and conversions.

Online resources are a great place to start, Google provides free online resources covering topics on GA, but like acquiring any new skill, working with certified instructors can save company employee’s valuable time and accelerate deeper understanding.

Analysis & Visualization

The final pieces of the analytics puzzle lies in data visualization and the analysis itself. With a whole host of reports, metrics, dimensions, and abbreviations to learn and recall, finding trends and actionable insights from huge datasets can be an overwhelming task.

One might have to dive into five different reports from multiple marketing tools in order to answer an everyday question like what were the ad impressions, spend, web traffic, and sales generated from one of our Facebook campaign yesterday?

The ultimate pain point is having to manually map ad impressions and cost data from Facebook, and sales data from our CRM to complement GA sessions.

With a dashboard, imagine a canvas with all the key metrics and charts that can be monitored at a single glance. The setup may be tedious, but a dashboard with automated workflows ensures that this will become a one-time effort.

Google recently released Data Studio- a data visualization tool that makes dashboards centralized, interactive, automated, and shareable.

As often as it gets overlooked, data analytics is a crucial aspect to any online business. Its scope spans beyond a simplistic approach of making analyses and drawing conclusions, but also involves a multifaceted process of auditing and implementing tags, setting up a leak-proof analytics account, and deriving actionable insights from reports via visualization.

From data collection, cleansing, consolidation, to presentation, a strict set of standards and best practices are required in a market where not many are qualified for this expertise.

However, if the business can overcome these hurdles and translate its top-line objectives into metrics, they will only be a few steps away from a strong digital marketing strategy.

By Watasit Chindakawee, Associate Internet Marketing Manager & Analytics Team Lead at aCommerce
POST SPONSORED BY SEAMLESS ASIA: THE FUTURE OF PAYMENTS, ECOMMERCE & RETAIL

Seamless is one of Asia’s largest conference organized by Terrapinn that focuses on cards and payments,  including a dynamic summit and large-scale exhibition bringing together the converging worlds of ecommerce, retail and payments.

The Seamless Asia team spoke to Padmanabhan Ramaswamy, former head of business intelligence analytics at online marketplace GEMFIVE about recommendation engines to find out how they are brilliant in improving sales for eTailers but are not always perfect.

Read more

The five most valuable companies of today account for almost $2.4 trillion in market capitalization combined while only employing around half of the people that normally attend the New Year’s Eve celebration in New York City’s Times Square.

This number may not tell us much per se but when we think that the whole continent of Africa with a population of 1.2 billion people has a combined GDP of $2.2 trillion, (International Monetary Fund) we realize that there was never a time in recent history where so much wealth was generated by such a small number of people.

If we think of these tech giants in simpler terms, we have a company connecting people (Facebook), another one organizing the world’s data (Google), one that’s aspirational (Apple) and another that makes businesses more efficient (Microsoft).

Amazon, on the other hand, is set out to become the world’s marketplace.

And even to this day, they continue to hold true to its original mission statement, which we can consider as their “Box Two”, which is to be “earth’s most customer-centric company, where consumers can find anything they want to buy online and at the lowest price” (Amazon.com).

In its annual letter to shareholders, Jeff Bezos characterized Amazon as an “invention machine” which three main pillars or “Box One” are: Prime, their marketplace and AWS. Not only will Amazon Prime members account for 50% of American households this year but they also spend more than twice as much and order much more frequently than non-members.

Members not only get free and fast delivery but other benefits such as video streaming, which in the end results in higher conversion rates and retention. The company is allocating almost $6 billion on original content next year.

With more than 63 million members spending around $1,300 each year and a retention rate of more than 90% (Consumer Intelligence Report, 2016), numbers seem bright for Amazon. We also see that last year, Amazon alone was responsible for 51% of the growth in US ecommerce while expectations are set on the fact that total global sales are predicted to reach $28.3 trillion by 2018 with ecommerce accounting for 8.8% (eMarketer, 2014).

Lastly, when looking into Amazon cloud service, AWS, we find that they lead adoption rate with 57% and around $10 billion in revenue this year. Spending on public cloud Infrastructure as a Service (IaaS) hardware and software are also expected to reach $173 billion within the next ten years – the market growth potential is massive.

Amazon ‘Box Three’

The new global logistics paradigm

Not that long ago, only a handful of retailers offered free shipping. Now, everyone is forced to try and do so, hoping they won’t run out of oxygen before it happens. Amazon has changed the rules of the game for the retail industry with its tremendous access to cheap capital that allows them to make multi-billion dollars investments in their fulfillment infrastructure.

They have opened more than 180 fulfillment centers across the globe surpassing any other retailer and only last year, they opened 28 sorting centers, 59 delivery stations and more than 65 Prime Now and Fresh delivery hubs with the intention of delivering goods to consumers in less than 60 minutes.

Amazon also offers a platform called Fulfillment by Amazon (FBA), which is a way for third-party retailers to take advantage of Amazon shipping infrastructure. FBA saw its active users grow more than 50% last year while nearly 50% of total third-party units delivered was through this platform.

To this day, the Achilles heel for Amazon continues to be its shipping costs, which account for 11% of its overall sales and have increased each year to almost $12 billion in 2015. Shipping fees collected – mostly through Prime users – are only 50% of all shipping transportation costs making this situation unsustainable in the long-run.

Amazon needs to reduce its dependency on external providers and change the role it plays in the delivery of products.

The Seattle-based company has not sat quietly and recently made of series of moves to strengthen its logistics arm:

  • obtained a freight-forwarding license through one of its Chinese contractors that allows them to sell space in cargo ships potentially becoming a sort of travel agent for freights
  • leased 40 US cargo planes that could account for 20 to 30% of its cargo volume independently
  • started testing the usage of parcel-drone delivery under the “Prime Air” platform
  • utilizes more than 30,000 robots at its warehouses
  • started delivering packages under the “Amazon” brand with leased truck trailers.

Amazon has also recently focused on its “last mile” strategy, which is the final and normally most expensive part of a package’s trip to a customer’s front door.

Amazon started to team-up with delivery startups in Europe, mostly the UK, and introduced its own crowd sourcing delivery service called “Flex” that uses contract drivers to deliver its regular packages directly competing with FedEx, UPS and if thinking about future possible business models, with Uber.

Amazon has also filed a patent to use transient warehouses that would allow smaller vehicles to access items from places other than brick-and-mortar locations.

This is Amazon’s move into expanding across the supply chain by focusing on logistics components that were previously outsourced — first inbound logistics and then home delivery.

Once they have built a sustainable and efficient transportation network over the next 5 to 10 years, others will be able to use it and Amazon will market it accordingly, just like they did with their cloud computing business.

This way of doing business is explained by Freightos CEO Zvi Schreiber in Techcrunch as being part of the development process at Amazon. First, you identify some inefficiency and start developing a technological solution internally, then as you scale that solution and it becomes a platform, you can offer it as a paid service to third-parties.

Amazon has done this for things like product development and warehousing to payment systems.

Figure 1. Amazon’s vertical integration in the supply chain (Freightos, 2016)

In the following years, we are going to see a disruptive change in the current transportation business as Amazon will not only compete domestically but it will also become a global delivery company capable of moving goods directly from China to consumers in the US or Europe through its transportation network that ranges from cargo ships to drone deliverance.

Nowadays, ocean freight continues to be mostly a “paper-based” industry with room for technological improvement with consumers keen to have faster and cheaper access to a broader range of products from around the world and merchants eager to have a broader market.

This is what Amazon believes is a unique opportunity to enter both the $1 trillion market of cross-border online sales and tap into the $350 billion ocean freight industry.

Disrupting fashion

Although most of Amazon sales comes from either books or consumer electronics, there’s one category that has seen tremendous growth over the past few years: clothing.

Amazon has invested heavily in setting itself as a fashion destination for anyone looking to buy clothing online. Many designer brands have decided to be on the platform to take advantage of its huge consumer base, its excellent supply-chain management and the fact that Amazon has promised them full price on their listings.

Figure 2. US sales of apparel and accessories (Quartz, 2016)

On the other side, we see that all major department stores have witnessed their stocks fall last year as their long-term market outlook seems rather obscure with more people turning to Amazon for apparel.

Macy’s had to close 100 stores last year and it’s said that others like Nordstrom and Sears would have to cut down around 30% their stores in order to have the same level of sales per sq foot as pre-recession (2008) times.

Amazon has shifted its initial strategy about fashion to start offering more high-end designer names in its listings somewhat successfully with “accessible luxury” brands but most higher-end luxury labels still don’t want to be associated with what they consider to be a “simple marketplace” and diminish their brand equity.

Luxury is defined mostly as a customer experience that is difficult to replicate online and by no means in a template-ized format where their listings would be next to fast fashion or lower-end brands. But this could turn out to be a good opportunity for Amazon to acquire brick-and-mortar stores in exclusive locations -Macy’s for example – and build what could become an aspirational brand in the future, much like how Apple went from being a tech company to a luxury one.

Even when they are not officially on the platform, high-end luxury brands like Louis Vuitton also have products listed on Amazon. We can see that even when their products rank higher than other prestige brands, the bulk of their sales happened in the grey market through third-party sellers.

This phenomena involves mostly apparel and fragrances brands who can’t control the flow of counterfeits or legitimate discount listings.

Amazon keeps a close eye on the volume of these listings but only for partner brands, as is the case with Calvin Klein who after signing a partnership with Amazon went from having 7,824 SKU fragrances in 2014 to only 38 one year later.

This is the way that Amazon forces high-end brands to become partners and have an official store inside the marketplace.

Amazon’s move into the fashion industry does not only involve increasing brand equity by bringing higher-end brands into its platform but also positions them as a key player.

To do this, the company has launched its own private fashion label hiring executives from top luxury fashion companies and launching seven in-house brands.

They understand that branding is shifting towards the consumer and with its loyal and affluent Prime user base,they will surpass every department store out there and become the largest clothing retailer in the US by 2017.

Amazon entering our house

In a recent conference, NYU professor Scott Galloway stated that our previous understanding of how market capitalization is made in the tech industry has completely changed in the last few years. In the past, we would argue that value was dependent on the amount of users we had and how engaged they were and we could cite Twitter as a clear example of this with its vast (but declining) user base.

He argues that the algorithm for value is now based on how many “receptors” we have,

How much user data and user behaviour patterns we can collect and what we do with this data for the consumer in terms of intelligence.

Amazon had pioneered this idea long ago when they enabled shoppers to make informed purchases through user reviews while reinforcing search algorithms. This algorithm works by comparing historical and recent sales to determine a sales rank, which it then uses to support search placement.

Based on the user recent purchases and what product listings they visited, Amazon shows a customized home page relative to each person and while they provide users with the most information than anyone else about a product, they also ensure consumers that they are selling it at the lowest possible price.

While BestBuy and Walmart change their prices about 50,000 times each month, Amazon does it 2,500,000 times each day reinforcing the idea to Prime users that they don’t have to go anywhere else to buy something online.

Almost 20 years ago, the world of ecommerce was shaken when Amazon filed a patent for a “one-click” payment system that allowed customers to avoid the hassle of entering their personal information each time they make a purchase. This patent covered a business method with such a broad definition that created an initial technological lead by Amazon for many years.

With the recent introduction of the “Dash” button, Amazon now offers these “one-click” purchases within the household as a way for consumers to effortlessly order goods for their everyday lives but have no desire to spend time purchasing it, such as cleaning detergent, for example.

This was a bold move by Amazon to lure consumers away from brick-and-mortar stores and also learn even more about their users purchase history.

At the same time, it came at almost no cost for them because 150 brands were each sponsoring their own version of the “Dash”. But it doesn’t stop there, as Amazon launched a device called the Echo that uses cloud-based AI Alexa to perform tasks that range from answering queries about the weather to controlling smart home devices and making purchases.

Alexa has recently been opened up to external developers and more skills are introduced each week by the community – over 3,000 as of now. With sales reaching 3MM units this year, even other tech giants like Google had to come up with their own version of the Echo (using “conversational actions” instead of skills), to not miss the opportunity of entering ‘our’ house.

Conclusion

Not many companies have a broader “Box Three” than Amazon does at the moment. It has the ambition to disrupt not only the retail and fashion industries but also global logistics and content-on-demand to name a few.

Amazon is already the undisputed leader in ecommerce and cloud infrastructure (“Box One”) and have an affluent and loyal Prime user base.

My prediction is that Amazon will continue to secure this user base by spending more each year on generating original content for its users. The budget for next year ranks 3rd worldwide only after ESPN and Netflix.

It will also add more special perks such as “Prime Day” and finally continue providing an ever faster and cheaper service for consumers.

As Jeff Bezos said in a recent conference, “I don’t think anyone will ever want to spend more in shipping and have longer delivery times”. These users belong mostly to upper-middle class households that have yet to shift most of the purchases they do from offline to online.

Amazon wants to capitalize on that by offering a seamless experience to users through Dash and Echo for everyday item replenishment and through Amazon Fresh and Pantry for grocery delivery.

Amazon will surely open brick-and-mortar stores that will serve as warehouses and offer curated items with a 5-star user rating along with user reviews similarly to what they currently do in its Seattle bookstore or the recently opened cashier-less convenience store they call “Amazon Go”.

Amazon Go serves as proof that vertical integration is key to this kind of disruption as no other company would have ever pulled something like that off through corporate partnership.

As only 3 to 5% of the shopping we do is actually enjoyable and we prefer to do it in brick-and-mortar stores, Amazon understands that to capture the mid-high end market, they need to transform its brand into an aspirational one. For that, they need to provide a disruptive shopping experience inside its stores and make a name for themselves in the fashion industry.

Finally, through all this user generated data, Amazon machine learning algorithms will learn our purchasing behavior over time and eventually be able to “predict” what our purchases will be, only asking for confirmation before ordering the groceries for the week.

That way, most of today’s purchases, both offline and online, will happen through Amazon thus increasing the current Prime user yearly expenditure from $1,300 to $10,000 pushing market capitalization to a trillion dollars.

By Nicolas Metallo, the original article can be found here. Editing by ecommerceIQ
Post sponsored by Last Mile Fulfilment Asia (LMFAsia)

LMFA is Southeast Asia’s premier trade show for the retail, ecommerce, logistics and parcel industries, and returns with the 3rd edition on March 2-3 2017.

Themed “Go Global, Deliver Local”, the event aims to drive and strengthen a borderless fulfilment process.

Amidst a backdrop of economic uncertainties today, Southeast Asia’s ecommerce market is expected to reach $88 billion by 2025.

In recognising that last mile costs almost 28% of total cost of moving goods, achieving cost efficiency through innovative logistics solutions will be key to amplify the ecommerce market that is already expanding at rapid speed in the region.

According to Frost & Sullivan, the global B2B ecommerce market alone will reach US$6.7 trillion by 2020. This year’s conference will feature a new track “The Future of Ecommerce is B2B Ecommerce”, and include industry speakers from renowned retail, ecommerce and logistics leaders such as DHL, aCommerce and JD Worldwide.

The two-day conference and exhibition, organised by SingEx Exhibitions, comprises of a multi-track component that will dive into topics such as turning fulfilment challenges into opportunities, designing cross-border fulfilment solutions across Asia.

For more event information, please visit the website: http://www.lmfasia.com/

For Logistics related reports, visit our reports section

Disclaimer: ecommerceIQ is LMFA’s official Knowledge Partner for this year’s conference. We look forward to meeting everyone.

With pure play online brands around the world adopting offline channels, which retail strategy is really the way to go? Is an online-to-offline (O2O) approach feasible for your brand? David Jou, founder & CEO of Pomelo, one of Southeast Asia’s best performing ecommerce fashion brands, shares his views on today’s definition of a “retail experience” and what it means for his company.


A few months back, I had a very memorable meeting with a prominent Indian investor. He was the number one ranked student among all Institutes of Technology in India back in his days as a student, sold his first company for a hefty sum to Amazon and now heads up one the leading venture capital firms in India. His perspective is particularly interesting because India over the last decade has experienced one of the steepest adoption curves for ecommerce globally.

I was given a bit of time to pick his brain at his office.

“Ask him your hardest questions, because he’s an absolute genius.”

I sat down, launched into a quick introduction of myself and Pomelo and got him up to speed about my margins, growth, the brand, our competitive advantage, the team, our factory etc. etc. I looked over and asked,

“Does that all sound good?”

“Yes, that all makes sense.”

“So, you think this all makes sense?”

“Yes I think you’re absolutely spot on and you’ve figured something out.”

So there it was, we were on the same page and the discussion could continue.

With the groundwork in place, I decided to ask him a question Pomelo had been considering over the past few months.

“Should Pomelo spend its capital on creating an offline retail footprint or on marketing its mobile app?”

I had asked this particular question to many before and heard variations of “forget offline, you’re online! Why would you want to deal with a non-scalable, hassle-filled business model that’s crowded and competitive. You’re exactly where you want to be. Double down!”

Without hesitation and much gusto he answered,

“Go offline.”

Astonished, I asked, “why?”

“Even 5–10 years from now, best case scenario, only 10–15% of retail spending in your markets will be online. 85% of spending will still be offline.”

So there it is. For the coming years, offline will remain an important part of the 360 retail experience. Think of Warby Parker, Amazon, Bonobos in the US who have all opened offline stores. Now how can online players really take advantage of clicks to bricks?

1. Provide concrete incentives to visit your offline location

Spend time with your team to figure out the ‘why’ behind your offline project. Why would your target customer come to this particular location and what benefits do they get from coming to it? Opening a flagship store for the sake of it isn’t a good enough reason, answer these questions first:

  • Is it to showcase your physical product because it shows better in the real world?
  • Is it to alleviate a particular barrier to purchase that exists in your category?
  • Is it to provide a space where you can build a community?

If your “why” is to drive more sales or a generic “to increase awareness”, it will be hard to determine if you’re set up for success or failure. Imagine the location you’re contemplating is really a physical billboard to drive customer acquisition and that the metrics you track should be on that basis.

Amazon recently picked up a lot of attention following the launch of Amazon Go, an offline grocery store that boasts zero queues and no check-out. The major realization was that Amazon could reinvent the grocery store experience by getting rid of lines and cash and draw in more users online through a highly attractive offline experience.

“Grab & Go” at the Amazon Go store.

2. Scrap traditional retail conventions

The key to success is to provide a differentiated experience and scrap traditional retail conventions. Remember that you’re not in the business of building more efficient candles, you’re after the next light bulb. Figure out how to disrupt the traditional store format that reigns in your category.

One great example is New York based workwear website MM.LaFleur that has become famous through a product it calls the “Bento Box”, a mail-ordered shipment that comes with four to six ready-to-try wardrobe staples.

The company focuses on professional women’s wear for the office and have been extremely successful, with revenue growing 600% in 2015 and a projected $30 million in 2016.

David-Jou-Pomelo

The “Bento Box”

The brand’s approach to its offline experience directly mirrors the Bento Box philosophy. Stylists curate a selection of products based on a survey customers fill-out when they book their appointment online. A lot of players in traditional retail would say the cost of having a personal stylist on hand for an unpredictable amount of customers is highly inefficient and consequently won’t scale.

MM.LaFleur’s success would suggest otherwise; they’re launching a showroom in Washington DC this March, in addition to a showroom in New York and pop-ups scattered the country.

David-Jou-Pomelo

MM.LaFleur New York City location

3. Have a built-in digital marketing plan

One thing I would say is if you build it, they will not so simply flock. If your brand is considering an offline location, you have most likely built up a loyal following on social media, your email database and an efficient conversion funnel online. The trick here is to take the same approach with offline as you did online, and fully utilize it for your brick & mortar venture.

One of the best examples I’ve come across was by fashion label Marc Jacobs at the Marc Jacobs Daisy Pop-up Tweet Shop in 2014.  The three day pop-up store in lower Manhattan used tweets and Facebook posts as viable payment methods, where customers walked out with products after tweeting or posting a picture about the pop-up event.

The pop-up was a huge success and the brand received a ton of PR via social engagement to reinforce the fun playful character of the brand all at the same time. This concept was later replicated at a few additional Marc Jacobs locations, including London.

Marc Jacobs Pop-Up Tweet Shop window

David-Jou-Pomelo

Signage showing how the tweet shop works

From eIQ:

What’s next for Pomelo?

Multiple mall staples in the US, such as BCBG and JC Penny are struggling to keep stores open. Long-standing department stores Macy’s had to shut down multiple stores, while scrambling to launch ecommerce strategies to stay afloat. Ironically, purely digital brands are beginning to adopt offline strategies, most notably eyewear startup Warby Parker and Rent The Runway. If the death of pure play retail is indeed true, then what is stopping Pomelo from pursuing an offline store strategy to become a global fast fashion powerhouse?

BY DAVID JOU, FOUNDER & CEO OF POMELO

Read more about David Jou in eIQ’s SPARK 40

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?
We would love to hear from you, find us on
Facebook | LinkedIn | Twitter