Consumers in Southeast Asia are now increasingly comfortable with online shopping, with consumption habits reportedly being more digital and home-centric, as they adjust to the impact of lockdowns and social distancing measures.
While consumers are still seen to be shopping, experts however have observed that they are now more cautious with their spending.
A recent report by Facebook and Bain & Company said there has been a shift to value-for-money purchasing across Southeast Asian markets amidst the current climate.
In the region, 57 per cent have cited “value” as one of their top three purchasing considerations, while approximately 70 per cent of consumers in Singapore and Thailand have placed it at the top of their list.
With a good enough 11.11 and 12.12 coming up, how can e-commerce players continue to win over the region’s cautious online shoppers?
Experts are now positing that e-commerce firms can generate a much bigger impact if more time was set aside to promote shopping campaigns. According to a Facebook meta-analysis of 2019 mega-sale days in Asia Pacific, brands get clear advantages by extending their marketing campaigns by another three to four weeks.
Zalora is one company which has been actively carrying out marketing campaigns to gain an edge over others, and it was recently shortlisted as one of the finalists in Marketing’s Mob-Ex Awards 2020.
e27 recently had a chat with Zalora’s CMO Jo Bjordal to learn more on how e-commerce players are making the most out of major shopping events by leveraging campaigns and marketing strategies.
Jo Bjordal, CMO, Zalora
He has been with Zalora since 2015, leading a team of over 100 people and used his steadfastness to navigate changing consumer habits in the new normal.
How did ZALORA fare on 11.11? How does it compare to pre-COVID-19 years?
Year on year, Singles’ Day keeps growing for most shopping websites, and we too had a strong performance this year.
In fact, to date, it has been our biggest sales day in Zalora history — with significant improvements in profitability, marketing efficiency and growth in our customer base.
We have also observed interesting shifts and trends in this year’s 11.11 across categories, with standout growth in beauty and luxury, which constituted almost one-third of our sales, taking a bite from the traditionally strong apparel category.
We also saw changes in shopping behaviour, where we observed more scattered peaks within the day compared to well-established peaks during pre-COVID-19 days. This included spikes during the first and last hour of the sales and during lunch time.
As more people are working from home, the lunch spike has flattened, and it contributed to a more distributed sales during the daytime.
What did you do differently this year?
This year, we looked at the data and took note of the growing interest in our new categories — beauty, lifestyle (including home and living), luxury, and kids, and focused on growing these categories during the major sales season including 11.11.
We have rolled out a few consumer-friendly initiatives that continue to make us a platform of choice for online shoppers. One of these initiatives is our cashback programme, which was introduced in July this year and has helped us improve on shopping frequency and customer reactivation.
With a hyper focus on value, most consumers find this new feature exciting. We have also launched new payment methods in the region, such as OVO in Indonesia, a few days before 11.11, making it easier for shoppers to purchase their favourite items and brands on our app/website.
We have also relooked at how we traditionally roll out marketing initiatives across our markets and significantly expanded both our digital and offline reach by diversifying our marketing media mix with new channels, embracing a more holistic 360-degree approach.
Finally, we invested in implementing and applying a new best-in-class marketing technology stack which not only improves the deliverability, cross-channel orchestration and timeliness of customer communication, but it has also enabled new personalisation capabilities that allows us to better segment and relate to our users.
As e-commerce grows in a COVID-19-struck world, how is Zalora fighting competition to stay on top of consumers’ mind?
We are committed to continuously improving our customer experience and our offerings to maintain our strong position as the top-of-mind fashion and lifestyle destination in Southeast Asia.
As an e-commerce player with a strong regional presence, it is important for us to be agile and to respond to changes in customer trends and preferences swiftly.
To date, we have done this by using data to track where these movements are, then tweaking our strategies and strengthening categories that were anticipated to grow in demand because of the pandemic.
Also read: Infographic: 21 e-commerce marketing tips to consider before starting
For example, we noticed that consumers were purchasing more leisurewear and sportswear, as they were spending more time at home.
We also saw an increase in consumer searches for daily essentials and personal hygiene products, such as food, hand wash and masks, which also led us to introduce an ‘essentials’ category on our platform.
We have made significant progress this year in introducing new categories, including ‘home and living’ and our ‘Earth Edit’ for sustainable shopping — a first of its kind for a major Southeast Asian online retailer.
We are also constantly rolling out exciting new features and experiences to ensure we offer fans and customers a more seamless shopping experience.
One of our recent launches is the ‘Get The Look’ feature, which in brief connects the Zalora app with fresh looks from local influencers and celebrities from Instagram so our customers can shop the look of their favourite influencers straight from the app.
This complements our earlier visual-based features, such as ‘Complete the Look’ shopping and our visual search on the app, making it easier for fashion shoppers to achieve their gram-friendly outfits and looks.
We are also now rolling out a community influencer programme, which allows literally everyone to become a Zalora influencer and earn a commission for every successful sale they refer through their social media accounts.
Is there a shift in your marketing strategies in the new normal? What are the major changes?
COVID-19 has pushed a lot of people — and more importantly, communications — online. Being connected to the internet has, as a result, become quite noisy, and breaking through that noise as a brand has become much harder.
Customers are not triggered as easily by each individual customer relationship management (CRM) communication, so we as marketers are required to think more creatively and be more clever and interesting in our messaging to attract the users’ attention to avoid spamming customers with too many interactions. We focus on the quality of interactions.
Media asset prices have also fluctuated a lot because of advertisers reducing spend primarily offline and moving more digital. We are constantly optimising our media investments by efficient KPIs and as a result, we have been very active in reallocating spend to the most lucrative channels.
COVID-19 has also contributed to the surge of new online users and new e-commerce customers, which required us to explore new channels to ensure we can reach these users.
In summary, the need to be more creative and dynamic in our approach remains to be our main strategy.
Is it any different for the marketing for new users?
Yes, we engage them differently. Thanks to the time and budget invested in rebuilding our marketing technology stack, we have unlocked far better capabilities in identifying new users and tailoring their on boarding journey with more relevant communication and offers.
Our performance marketing campaigns are intuitively also segmented by customer activity levels, ensuring optimised engagement with our users.
What are the various online channels used and which ones worked well for you in Southeast Asia?
We continue to diversify our media mix to avoid high dependency on any specific platform. This allows us to be early adopters of new channels and we set aside a budget for experimentation every month for us to test the efficacy of these new channels.
It is difficult to say which ones work best since each channel usually has very specific characteristics which make them strong in either customer acquisition, such as Facebook and app installs like Google Universal App Campaigns (UAC), or Return on Advertising Spend (ROAS) such as Google Shopping.
How has social media marketing changed in the light of the pandemic?
Social media has certainly become more important during the pandemic as users have used the platform to stay connected, express themselves and be entertained.
The emergence of new social media phenomena has unlikely ever been faster than during the last eight months, with adoption rates soaring and content from across age groups increasing significantly.
Social media has given normal people an opportunity to build their own brand through stimulating content and engagement. These new influencers are more relatable than traditional celebrities. About 71 per cent of consumers are more likely to make a product or service purchase online based on social media referrals.
Understanding the role of social media in capturing attention and engaging with our audience, we rolled out our Get the Look feature together with our partner influencers. We are also introducing our Community Influencers initiative soon to create communities of social media ambassadors for the brand.
Staying ahead of the curve on these trends are important to remain relevant to our audience. Online users also expect brands to communicate more emphatically and be sensitive to what is happening around us.
And what about livestream e-commerce? Is it here to stay?
Yes, I believe social commerce, including livestream e-commerce, will continue to become a more important sales channel in Southeast Asia as the markets mature. SEA is a mobile-first region, with most countries ranking high in mobile phone ownership ratio and use of mobile in their communications.
Also read: The 6 Cs of e-commerce marketing
As much as 63 per cent of the region’s population are invested in social media; it is no wonder why Southeast Asians are considered “the most engaged mobile internet users in the world”.
This thriving melting pot of digital activity also creates myriad opportunities for retailers to not only reach online shoppers but also entice offline shoppers at the same time.
China is a prime example of where the phenomenon has been around for a while already and it continues to grow in adoption.
So is there any value in outdoor advertising and others now that we are all socially distancing?
Currently, with the multiple movement restrictions in place, there are less people outdoors in most countries, so the number of impressions captured by the same placement has decreased for most assets.
However, the asset prices offline seem to have decreased at a higher rate as more traditional offline retailers and businesses who were historically heavy on offline marketing have reduced spending.
This created opportunities for some players to invest more in offline or outdoor advertising, and diversify their advertising mix. I do think there is still merit in doing so, but the challenge for brand marketers is to create impactful offline ads that captures attention and encourages interaction with the brand.
What are the other shopping events you are working on this year?
For all our six markets, the remaining key shopping events are Black Friday, Cyber Monday, and 12.12, which is still the biggest sales event of the year in markets like Indonesia.
We would then have the festive season of Christmas, which is largely celebrated in the Philippines, before we enter the Chinese New Year sales season – an event that is traditionally strong for markets such as Singapore, Hong Kong and Taiwan.
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Image credit: Karolina Grabowska from Pexels and Zalora
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