In the last few decades, retailers have used innovative methods to drive brand loyalty and evolve their customer relationship management practice. Unfortunately, the pandemic consigned many of those practices to the past. As tried and tested methods were phased out, businesses were rethinking how to expand their reach to high-value audiences to shepherd them into repeat customers. This has been particularly true — and critical — for businesses across the Asia Pacific, where the growth of e-commerce has been a little short of tremendous in the last couple of years, prompting the OECD to classify It as the world’s largest e-commerce region.
With so many users coming online and the amount of shifting consumer habits, the big question is – did consumer loyalty also change? In spite of all the behaviour changes, the consumer is still seeking deeper brand relationships, and evidently, retail is struggling to cope. Our Treasure Data survey revealed that consumers are still receptive to the rapidly accelerating marketing and financing trends in the market. New options such as buy now, pay later (BNPL) have risen and continues to influence purchase, offering customers a seamless customer experience and unparalleled convenience. In Asia Pacific, BNPL is expected to grow 61.5 percent to reach USD 133.7 billion in 2022, and will further fuel e-commerce growth in the region.
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From our 2022 customer behaviour survey, here are 5 insights for brands to connect with their high-value audiences better:
Consumer financing is the future
In the current economic uncertainties, brands will find it challenging to address the financial needs of consumers. Historically, consumer financing has alleviated this burden in the retail segment, however, market conditions and technological integration today have enabled buy now, pay later solutions to thrive in the last two years, altered this perception among brands and consumers, and made a significant industry-wide impact. The study revealed the popularity of BNPL offerings, as more than two-thirds of shoppers (71 percent) have considered BNPL financing to pay for products and servicing in the past year. BNPL has simplified the purchase experience of customers, increased purchasing power, and is a win that has kept consumers coming back for more.
Loyalty, a value exchange
Brands and consumers that actively participate are, in a sense, partaking in an exchange of value. In the past, retailers merely kept shelves properly stocked but this has changed. Ecommerce and contactless shopping upped the stakes for retailers to begin winning the attention of consumers. Our survey showed a whopping 83 percent of respondents were willing to offer personal information to engage with brands and retailers, in exchange for member benefits, product recommendations and discounts. Businesses that offer these incentives in exchange for invaluable customer intelligence will find a mutually beneficial relationship that keeps on rewarding again and again.
Making loyalty work
As the pandemic raged on, brands found that they were losing sales as the product inventory could not keep up with the customer demand due to supply chain disruption. Empty shelves meant that customers were going to buy something else, and this echoed in our survey, as 21 percent of respondents agree that they would purchase another brand when their preferred brand was unavailable. However, the silver lining is this – 82 percent of respondents said they were motivated to purchase from certain brands due to the loyalty rewards – which means businesses that adopted a digital strategy with loyalty in mind could mitigate the loss of business with the right hook for customers.
Benefits of direct-to-consumer and contactless shopping
While a world without in-store shopping is hard to imagine, it is not difficult to notice that the shopping experience is becoming more and more contactless. Even as the world steps into a post-pandemic world in 2022, shoppers are still keen on contactless shopping and as many as 60 percent are anticipating pickups to continue through the next year. At the same time, two-thirds (68 percent) of consumers feel comfortable purchasing directly from brands instead from retailers than the year before. While retailers and third-party markets will continue to be a priority for consumer packaged goods companies, they can no longer ignore the influence of direct-to-customer (DTC) opportunities.
Maturity of personalized marketing
Brands and retailers will obtain a customer’s consent and guide the relationship through acceptable marketing communications. Often the line gets crossed and the consumer will have to endure overbearing communication as a result. Consumers today are in favour of proactive alerts and notifications, with two-thirds (68 percent) finding benefits regardless of time or season. Concurrently, marketers have improved in terms of customizing communications to shoppers, with 63 percent of consumers believing brand offers and recommendations reflect their shopping habits accurately.
As the pandemic continues to shift consumer behaviour, data has shown that the way and place people have shopped have changed in the last two years, and consumers will continue to seek out e-commerce platforms as their next channel to purchase. High-value customers will still find discounts and personal experiences appealing, and retailers need to begin implementing data-driven methods to build rapport with these customers if they want to continue benefiting and navigating a post-pandemic world.
Article contributed by Sean Valencia, Marketing Manager, APAC, Treasure Data.
About the author
Sean leads APAC marketing for Treasure Data, focusing on CDP Customer Data Platform. In his current role, he develops marketing strategies and manages marketing campaigns across the APAC region. He is based in Tokyo (Japan), and holds an MBA from Hitotsubashi University. Prior to Treasure Data, he worked in marketing for an online bank in the United States.