Key shifts in consumer behavior and growth of the internet economy spell transformation for businesses seeking to succeed through improved customer experience.

The COVID-19 pandemic has led to an accelerated and sustained shift in consumer behavior. Although Southeast Asia’s internet economy remained resilient in 2020, a resurgence in 2021 propelled the region upwards to US$170 billion GMV.

E-commerce, together with other sectors like food delivery and digital financial services, remain the primary growth drivers, with the internet economy expected to reach US$360 billion by 2025.

Southeast Asia is also one of the leading regions for smartphone users, with consumers making all their shopping decisions right from the planning stage on their first screen: the mobile.

What do these trends mean for businesses in the region? DigiconAsia sought out some insights from Saurabh Madan, General Manager of SEA and ANZ, MoEngage:

Saurabh Madan, General Manager, SEA and ANZ, MoEngage

How has the consumer landscape evolved in Southeast Asia in 2021?

Saurabh: We conducted research with InMobi during the 2021 festive season, and found that 56% of consumers in Southeast Asia intended to shop online with only 7% planning to shop offline.

70% of consumers wanted to use their smartphones to shop during the festive season. Additionally, Facebook predicted that 78% of Southeast Asia’s population of 15-year-olds and above would be digital consumers by the end of 2021 – creating a whole new generation of e-consumers for businesses to reach.

That said, this is not the death of physical retail. This trend shows us that retail brands need to adapt to changes in consumer behavior – which is the increase in purchase decisions and information gathering on smartphones before transacting offline or online. The newer normal may not be choosing between online and offline retail, but an integration of both channels.

As borders open up and consumers adapt to a new normal, there will be an increase in BOPIS (Buy Online Pick up in Store). Foot traffic in stores will increase, but shoppers will browse products and gather information online before making a purchase. The way forward is a strong hybrid of offline and online retail.

Besides platforms and channels, consumer behavior and preferences have also changed in the last year. 26% of Southeast Asian consumers have decided what categories they want to shop for, but have not narrowed down on specific products or brands yet. Meanwhile, 46% of male shoppers in this region are “Category Explorers”.

Personal values play a role in purchase behavior, too. Consumers are also demonstrating greater awareness towards environmental and sustainability factors, with environmental, social and governance (ESG) factors among the top three most cited reasons for switching brands. Facebook’s report found that 9 in 10 consumers were willing to pay more for ESG, with 8 in 10 consumers indicating that they would be able to accept a 10% premium if it meant purchasing a more sustainable product.

These insights are more than just figures and percentages, and can play a catalyst role in defining success in any brand’s customer engagement strategy when harnessed to drive informed decisions.

What will these trends mean for businesses this year?

Saurabh: In line with these trends, creating omnichannel engagement strategies will be key to delivering a seamless customer experience. Businesses must employ a hybrid approach and embrace shopping across all channels, which includes physical outlets, social commerce and livestreams – platforms that are rising in popularity in Southeast Asia. Adopting a connected experience across online and offline channels is no longer an added bonus, it is a necessity. Brands need to ensure that they provide customers with a seamless omnichannel experience.

Investing in in-app campaigns and creating personalized micro-moments on apps is definitely a good idea for businesses in Southeast Asia, and optimizing the mobile website should be another key focus area. While it is imperative to understand customer behavior, businesses should be transparent in communicating about data usage to their customers.

Leveraging these insights for informative decision-making when building customer engagement strategies can go a long way in helping a brand stay ahead of their competitors.

What are the 2 myths that businesses should not fall into in 2022?

Saurabh: A mobile-first strategy is definitely key for any business looking to succeed in a digital economy, but there’s more to a concrete mobile strategy than just engaging customers within the app. Instead, look at how your customers are behaving on the various apps and platforms. 

Our report found that while digital banks, fintech mobile apps, and retail and mobile E-commerce apps witness higher conversions on Android devices than iOS devices, OTT and content streaming mobile apps generally see a higher conversion and click-through rate on iOS devices. Fine tuning your mobile strategy to target the right audience with the right content could go a long way in not only saving costs, but garnering a stronger ROI.

The second myth is believing that push notifications will always reach consumers. In Asia, the Android market is a large and fragmented one, that is also dominated by many popular OEMs. 40%-70% of push notifications in Asia go undelivered because devices get disconnected from Google’s Push Notification delivery service called Firebase Cloud Messaging service or FCM. This disconnect can be caused by a variety of reasons including internet connectivity issues or users opting out of notifications, but this is a great deal of missed opportunities to engage, convert and retain more customers. Brands need to start ensuring maximum push notification deliverability through A/B testing and investing in the right technology that can identify and retarget push notifications to reach consumers effectively.

What are some of the key things that businesses can adopt to deliver successful customer experiences in 2022?

Saurabh: To reach and engage mobile-first consumers effectively, it is imperative for brands to understand consumers and their preferences. It is also important to get the right strategy in place to build real connections and memorable experiences.

Brands can do this through an insights-led engagement approach – which is the modern marketer’s way of delivering better customer engagement by using data. Brands need to evolve from a campaign-centric approach to a customer-centric approach to engagement, which means reducing reliance on hunches and gut feelings and using real-time data and insights to answer questions such as ‘at which point in my customer’s journey do they drop-off the most’ or ‘which customer cohort prefers receiving communication on in-app messages more than emails’ or even ‘which customer cohort is more likely to purchase through the app’.

The biggest impact insights-led engagement has on businesses is that brand communication naturally becomes more personalized instead of general broadcasts. Brands can also immediately become more proactive in their communication rather than waiting for the customer to perform a certain action and then reacting to it.

Chatbot investment is also key in delivering successful customer experience thanks to their 24/7 availability, real-time communication with customers and ability to gather customers’ information as well as their preferences. Brands can then customize their offerings to better suit customers’ needs with the data gathered. However, brands should note that chatbots are only a part of the customer service solution.

Given that chatbots are, in essence, codes, it does have difficulties ascertaining user emotions, which could lead to the chatbot coming across as emotionally insensitive, and as a result, harming the brand’s reputation. With chatbots assisting brands in collecting customer data, it is crucial that brands ensure the security of the data collected when it is transmitted from the chatbot to their CRM.

Subsequently, brands must also ensure that all data collected is stored securely and that the chatbots only collect relevant customer data which will then assist brands in customizing their offerings to meet customers’ needs.

As we head deeper into the Year of the Tiger, it is time for businesses to realign business goals and more importantly, understand how the market is changing. Building the ultimate, unmatched customer experience can help brands to end the year with roaring success.