Trends and developments retailers need to understand to stay ahead in the digital economy of 2021.
2020 had been a year of uncertainty and constant change. The COVID-19 pandemic has impacted lives, and redefined daily habits.
In particular, we’ve seen how it has reshaped retail habits and perceptions, and prompted the increased use of digital channels in a time of social distancing, with 55% of shoppers in Asia Pacific downloading at least one shopping app during the peak of the COVID-19 outbreak, according to Criteo’s Global Apps Survey.
As consumer behavior changes, what can brands and retailers look forward to in the new year 2021? How can businesses stay competitive in the new post-COVID economy and continue to win over customers in an increasingly competitive retail landscape?
DigiconAsia spoke with Kenneth Pao, Executive Managing Director for Asia Pacific, Criteo, for some insights:
Please share your outlook and some predictions for the retail sector in 2021, especially in the areas of marketing technologies, e-commerce and customer experience.
Pao: As we step into a brand-new year, Criteo expects to see the following trends play out, not only globally, but also in Asia:
- Exponential e-commerce growth will continue
When COVID-19 hit in 2020, online shopping increased exponentially. Looking at Criteo’s APAC consumer survey at the peak of the pandemic, more than half of respondents in Asia Pacific (52%) reported that they were making more online purchases, with millennials leading the way, and 60% reporting an increase in online shopping.
This increase is driven from both existing online shoppers buying more, as well as new online shoppers who have been pushed out of their “in-store comfort zone” due to necessity.
Our recent “Peak to Recovery” Survey, of more than 13,500 consumers worldwide, revealed that 39% of respondents purchased from online stores for the first time during the peak of COVID-19. These new digital shoppers represent the massive opportunity for advertisers to expand their existing audiences on digital channels.
- Advertisers will increase investments in digital advertising
Given that many shoppers discovered at least one form of ecommerce during the peak of COVID-19 that they will continue using, including more than half of shoppers (55%) in India and over two-thirds (68%) in Taiwan — and are likely to continue with it, we can ascertain that advertisers will follow suit and invest more in online advertising so as to not only encourage purchases, but also sustain customer loyalty for the future.
With the ad economy in our region expected to rebound by 8.1% to reach USD175 billion in the new year, we are expecting that advertisers will increase their spend across paid display advertising and retargeting in the next 6-12 months.
- Connected TV will become a marketing mainstay
Like ecommerce, the use of connected TV (CTV) and over-the-top (OTT) devices has accelerated as a result of the pandemic, and advertisers need to engage consumers on these devices. With more people using CTV and OTT devices, even in Asia Pacific, means more hours of content watched on those platforms. As such, advertisers need to meet them there, and be seen while consumer stream, and eventually turn views into conversions by leveraging data from across web, app and in-store.
- In-store shopping experiences will become even more seamless
While e-commerce trends took center stage in 2020 as a result of COVID-19, in-store shopping is starting to pick up now that regional markets are pivoting toward recovery. Consumers now seek safer in-store shopping options and online-meets-offline shopping like buy online and pick up in-store to meet their needs for a holistic experience.
What we expect to change about the in-store shopping experience, beyond increased measures for greater hygiene and safety, is that it will be optimized for consumers to spend less time inside with features such as digital transactions, and cashier-less checkouts.
How should businesses leverage digital advertising to target the most relevant and valuable audiences?
Pao: For brands to successfully leverage digital advertising, it requires an acute understanding of where their audiences are at, and how best to engage them.
This year, apart from the rise of ecommerce that I mentioned earlier, we saw a significant rise in the adoption and usage of apps. According to Criteo’s recent Global Apps Survey, 55% of shoppers in Asia-Pacific downloaded at least one shopping app at the peak of the COVID-19 outbreak.
There is a trend toward boosting sales and achieving conversions within apps, and in particular, in-app advertising and app retargeting tools have been key in ensuring that the most relevant audiences are targeted.
In-app advertising is crucial as it leverages machine Learning as well as real-time data, and analysis of user intent signals, like in-app conversion frequency and engagement levels, to ensure the building of accurate user profiles. This ensures that brands identify the most relevant users, and take an active approach to engaging them, especially if they are dormant or new users to the platform.
Through in-app advertising, brands can push new and trending products, and inform them of promotions such as discounts and free shipping.
The second tool is app-retargeting, which involves reaching consumers with personalized ads after they leave the app to bring them back and maximize conversions.
Leveraging Machine Learning to predict items of interest and show shoppers products that they might like in addition to previously viewed products, brands can tailor the most relevant recommendations to users, based on their activities across devices, for a more accurate experience.
What are some successful brands in Asia Pacific that have managed to maximize customer engagement amid the COVID-19 pandemic?
Pao: Korean online cartoon platform, Mr Blue, has been leveraging advanced AI technology to identify high value users, identify new users similar to existing audiences, and reaching them with display advertising. When COVID-19 hit, Mr Blue managed to pivoted their strategies to target and re-engage dormant users and increase sales on their site, ultimately drive higher conversions by engaging consumers interested in online entertainment while serving stay-at-home orders.
This ultimately enabled them to acquire new customers and increase the lifetime value of existing members. Mr Blue noticed immediate results in membership, and is now confident of long-term growth by continuously engaging newly introduced users with the upper-funnel campaign and turning them into loyal customers.
Our team also works with online fashion retailer, Zalora in Southeast Asia, who leverages Criteo Engine to analyze each shopper’s readiness to purchase, their navigation patterns, geographic locations and seasonality, before delivering the right number of relevant and personalized ads or product recommendations to boost revenue at optimal costs.
Throughout COVID-19, Zalora continued to invest in their retail presence, and as we entered double-day sales – like 10.10, 11.11 and 12.12 – they continued to invest in engaging prospective customers. Preliminary numbers showed an increase in sales volumes as compared to a year before, with Zalora seeing an increased volume of sales on Singles Day, of 49%, compared to a year before. This grew to 99% on 12 November, one day after the major sales moment.
What are some best practices to improve customer engagement and targeting, and ultimately increase sales and profit?
Pao: As brands prepare for 2021, my advice would be to consider the trends on the horizon while keeping strategies nimble, to leave room to adapt to the unpredictable and unexpected.
In terms of driving maximum traction with customers, we recommend the following best practices:
- Targeting the most valuable audiences
Considering that the average adult spends more time engaging with their mobile device than watching TV, brands not only need to ensure that they target consumers on the right platforms, but that they zero in on targeting the right audience in a saturated space. Through leveraging data and insights, brands can find new, interested shoppers and re-engage existing customers.
- Enhancing ad relevance
It is not enough for brands to advertise their Singles’ Day deals – they need to ensure that ads are served in the right context and with the relevant content to their specific audience. This means considering the timing at which ads are served, preferably at a time when a consumer is likely to make a purchase.
- Maximizing customer value
This could include unique and practical customer services, launching loyalty and incentive programs to encourage loyal users to grow the brands following, and communicating through push notifications on promotions that would be most relevant to their target audience.