Marketing is evolving in fundamental ways due to digital technology. Now, measurable, multi-screen, and hyper-targeted digital marketing solutions are becoming the norm. Google APAC’s Chief Marketing Officer, Simon Kahn hosted the CMO's of two Singapore-based startups - Redmart and Wego - for a roundtable discussion on marketing strategies in the digital age. Redmart's Todd Kurie and Wego's Joachim Holte are seasoned marketers and veterans in the online space. They each have over a decade of experience at companies like eBay and Yahoo before leading marketing for two of Southeast Asia’s most exciting startups. Here's what was shared at our first CMO Fireside Chat.
Last week, Todd and Joachim joined us at the Google offices for a conversation and question and answer session with Google employees. We spoke about today’s interwoven world of technology and marketing, and the increasingly blurred lines between brand and direct marketing channels.
Q: Todd, in a recent panel, you mentioned that in this day and age, every marketer has to be a technologist. Could you elaborate on this?
Todd [CMO, Redmart]:
It’s a very convoluted field out there with dozens of providers for any specific category. Piecing together a technology staff for the marketing function is a very big challenge. I would say it’s the biggest change I’ve seen in the last five years.
Joachim [CMO, Wego]:
Something I’ve seen in the States and in Australia is that traditional channels like radio, outdoors, and TV are moving into the real-time buying marketplace. As Todd said, that kind of traditional marketer won’t be around anymore in five years. You’ll have to be a technologist. You can no longer say “I’ll let the tech guy handle that.” You’ll have to understand what’s going on in the tech space in order to do well.
Q: With the proliferation of screens today—desktop, tablets, phones, TV—how do you approach the different screens when it comes to your marketing strategy?
50% of our orders are placed on mobile apps. Customers not only flip back and forth between their desktops and apps across orders, but they do it withinorders, which makes it really complicated. We have customers who will add to their cart on their mobile, for instance, then they realize on the MRT that they need to buy diapers, then check out on desktop because that’s the easier experience. We spend a lot of time trying to unify data, which is very complex. It’s one thing to unify log ins but quite another to unify anonymous visits that start on desktop, mobile web, or the app, and then unify them after log ins. A lot of work is being done so we can get a unified view of the customer, but we still have a long way to go.
Q: You’re both performance-driven marketers. Can marketers drive brand recognition and loyalty with just performance advertising?
You look at companies like Booking.com that have been around for 15, 16 years. For 10 years, they did nothing but paid search. That was their brand building, and they succeeded to become #1 in every hotel query. That is getting to be quite expensive but is still doable right now.
In order to establish our brand identity, we mainly rely on our platforms, our web, and our apps, instead of external advertising. Not many people will say that AdWords is an awareness channel, but for us, it is great at establishing initial awareness and initial browsing activity, and customers come back to us via organic and retargeting later. We’ve been asking in surveys for new customers for years, and consistently, the three major awareness-building channels are word-of-mouth, Facebook, and Google, all at about 30%. For us, it is about using marketing to drive people to the site or the app. At the site or the app, that’s where we really begin the brand-building experience.
"Not many people will say that AdWords is an awareness channel, but for us, it is great at establishing initial awareness and initial browsing activity, and customers come back to us via organic and retargeting later."
Q: Both your companies provide services, and your customers have a transactional relationship with your brands. How do you use marketing to create an emotional connection?
The emotional connection for us, in many ways, is when the delivery rep shows up at your door because that is when it becomes real. E-commerce is a very emotionless experience, but when the delivery guy shows up at the door with a smile and helps you with your groceries, that is the emotional connection we try to deliver. It is important for e-commerce companies to capture that in some way.
First, we don’t actually take the transaction. We are an aggregator, and we refer customers to the sites where they make the final transactions. I’ve been in the travel industry for quite a few years now, and what we offer is a really cool experience that people are going to actually want. So we try to be a little bit more inspirational with our content, on blogs and on social channels, to inspire customers to go somewhere they already aspire to go.
Q: The travel industry ecosystem contains many participants with lots of different suppliers with different priorities. How do you position your business within that landscape?
At Wego, we are obviously competing with many other providers. What we do is put the consumer first. Our proposition is that in one go, [you can get] the results from all websites across numerous products—that is how we set ourselves apart. Most websites do either flight or hotel searches; we differentiate by doing both.
Q: And at Redmart? How do you include suppliers who may not be as digitally capable into your system?
Going back to the 4P framework, the one “P” that we focus on a lot is position. This is critical in a crowded marketplace such as in Singapore. We thought about how to position ourselves vis-a-vis the incumbents, who have been around forever, and we take a demographic-focused approach by looking at the next generation’s way of shopping. Eighty-five percent of our customers are between the ages of 25 and 44, which is a very different audience compared to Cold Storage or NTUC. This notion of reaching the next generation resonates well with our suppliers. They know there’s an emerging cohort of consumers who don’t do traditional shopping and even though this is only a fraction of their sales, they see it as a way to learn and get in the game early.
Q: How would you characterize your company culture?
Wego is very diverse—we’re from all over the place. The culture is very open but very determined. We know what we want to do, and we’re also very open and collaborative across all the teams.
We’re still trying to maintain that entrepreneurial, risk-taking culture. It’s hard because we have about 700 people in total, so by now there are all sorts of policies and guidelines and forms to fill out, which is a challenge for me. But we’re still trying to maintain that entrepreneurial approach in our day-to-day.
Q: You’ve both worked at more established companies. What’s the difference between a more traditional company versus a start-up?
First and foremost, it is about risk-taking. At Redmart, we’re happy to fail, happy to come to our CEO and speak candidly about our failures, and use every experience for learning. We put close to 20% of our budget towards tests, not only within the marketing team but across the entire organization. So one of the major differences is that we are far more open to failure.
Q: Once you get past the acquisition, for engagements, what are you doing to drive increased spends for existing customers? Is it just promotional, or are there other elements you’re using, particularly within the digital framework?
For us, it’s about figuring out the behaviors that lead to a certain purchase path. So, it might be someone who’s done three searches for flights originating from Dubai and going to Paris or London or wherever. That’s the person you want to send hotel promotions to. That’s the person who’s going to come back and book another trip in two months instead of four. It’s about finding a smart way to get into the data to find out who those people are, and we’re working with a number of vendors to do that.
Promotions are endemic in the grocery market, so we obviously had to play that game as well, but what we’re really trying to do to capture a greater share of our customers’ spend is improve our core service. This means expanding the range of our offerings, like going from 12,000 to 25,000 products, as well as improving the delivery process, like offering same-day delivery, one-hour windows, or a discount on an eight-hour window. We know that in the long term, we can’t compete in the promotions game, so we have to look at improving our core services.
"Google Analytics is a lifeblood for digital marketing. It gives tremendous insights on understanding not just our purchase path, but also early versus late channels within that path."
Q: You mentioned that you’d like to test different media and technologies. How do you measure the results, especially when it comes to the newer technologies?
Google Analytics is a lifeblood for digital marketing. It gives tremendous insights on understanding not just our purchase path, but also early versus late channels within that path. It’s been instrumental also because if we only looked at last-click conversion data, we might have cut a lot of promising channels. So we make sure that we do very in-depth analyses via Analytics and other tools before making any decision.
Q: What is your split between branding and conversion marketing?
We do about a 50-50 split between branding and conversion marketing, but we do include Google and Facebook in the branding side of that equation, which is why it balances out to that. Over the last year or two, I’ve discovered that this notion of brand and conversion being separate and distinct doesn’t really apply anymore. It’s about getting the consumers to interact with you in some capacity. Conversion channels are designed to drive traffic at a known price and known frequency, but that’s also where you can build your branding into the different elements. So we’re trying to move away from this brand versus conversion dichotomy. It’s tough because that’s what investors understand and want to know—what is your split in dollars—but at least internally within the marketing department, we’re moving away from it.
Q: I was in Israel last week, and one of the key things we learned is that Israel had access to all the key nodes for innovation—education, talent, research. It seems that Singapore also has many of those nodes. What are your thoughts on the startup environment in Singapore? What are the key challenges of having a startup here?
I think it’s quite similar, but Singapore is probably lacking in investment compared to Israel. In terms of access to talent, Singapore is a great place. There’s great education and access to talent, but we’re probably lacking a bit in engineering talent here compared to Israel.
I agree. The talents are definitely emerging, and I think Google has done a great job. Last year we participated in your Squared Data program with the IDA; it’s a great idea to start training the next generation of digital marketers. You’re also sponsoring GOSF for a second time, and those activities will continue to help. I think finding hard engineering talents is still very challenging here, but other than that, Singapore has come a long way for innovation.
Q: What kind of skill sets do you look for moving forward?
We recently took the data analytics guys into our digital marketing team, and those are the sorts of guys and girls that we’ll be looking for in the future—folks who are hands-on, who can run a SQL query, and who can interact with all the data we have and make sense of it to make sound marketing decisions.
Todd: In terms of skill sets, it’s analytics, and if not an in-depth understanding of technology, at least not being afraid of technology. And a willingness to dive in and assess the data.
"Conversion channels are designed to drive traffic at a known price and known frequency, but that’s also where you can build your branding into the different elements."
Q: My question is around key growth drivers for revenue. What’s one key thing that will be a big growth area? Second, do you consider millennials to be a big priority?
Increasing capacity is big for us, but the other priority is increasing retention from the first and second month. Every quasi-subscription service has challenges with fall-off. Grocery shopping is very habitual, but one order doesn’t change a habit. We found that the magic number is really three or four orders before Redmart begins to become part of daily life. We want to solve the challenge of retention between the first and second month or the first and second order. If you guys have any solutions, we’d be happy to hear them! In terms of millennials, they’re definitely a core target group. We hope that even 15-year-olds think of Redmart first. My daughter is 15 and uses a smartphone to order everything, so when these 15-year-olds move into their purchasing years, we’ll see e-commerce skyrocketing in Southeast Asia.
Q: On that note about retention and churn management, what kind of metrics do you look at in terms of retention? Is there anything you do in terms of churn management?
We’ve tried the traditional stuff, for example, sending first-time customers an email three, five, 10, and 15 days after their purchase with all the discounts, but we found that hasn’t really worked. I think there’s something more fundamental about why they’re not shopping with us, and I think it’s because we haven’t yet become a habit. So we’re trying to think beyond throwing coupons at them. Subscription services could be a solution, because many of our customers want stuff on a weekly or biweekly basis. Things like the Amazon Prime membership is great, because it gives customers an additional incentive to come back.
We have found pretty much the same thing. One of the mistakes we made when we first started doing push notifications was that we probably sent too many to our users. We’re getting better at that now and focus on finding the people who would actually do something.
Stay tuned for future editions of CMO Fireside Chat, where we speak with chief marketers and business leaders around the region.