Brands and businesses are coming to terms with what we call the "Great Retail Migration" — the wave of shoppers moving online during the pandemic. And judging by the numbers, they’re never going back.
In 2020, Southeast Asia saw 40 million new internet users, meaning over 70% of the population is now online. New shoppers generated over a third of 2020’s online commerce. Of these, 8 in 10 say they intend to continue shopping online.1 The trend also holds true globally: only 23% of customers say they will revert to in-store spending after the pandemic.2
New shoppers generated over a third of 2020’s online commerce. Of these, 8 in 10 say they intend to continue shopping online.
Consumers have elevated expectations when it comes to shopping. They now expect brands to understand their shopping preferences, provide personalised experiences, and deliver quick and convenient buying journeys.3
While disruption is nothing new in retail, the pace and intensity of change over the past year has been unprecedented. To keep up with the "Great Retail Migration," going digital and making quick but strategic investments are critical. Here are three investments brands can make to connect with online shoppers and drive future growth.
1. Invest in your brand
Stuck at home in 2020, more than 75% of people in surveyed countries across the globe discovered new brands online. And 30% of online shoppers purchased a brand that was new to them, indicating an openness to trying unfamiliar labels and brands.4
To stand out in today’s increasingly competitive retail landscape, brands need to build strong connections and give people reasons to engage with them. Showcasing your brand’s values is one way to do that. Consumers show a willingness to increase their spending by as much as 31% on products and brands that articulate values that align with their own.5
Investing in brand building also pays off in the long term. While sales activations can drive more immediate revenue impact, it’s often short lived.6 Businesses that invest in brand awareness are also more resilient. Following the 2008 financial crisis, businesses that invested in brand building exercises recovered 9X faster than others.7
2. Invest in your own direct-to-consumer website and mobile app
While online marketplaces can play a meaningful part in your sales strategy, investing in direct-to-consumer (D2C, or, brand.com) websites and mobile apps build long-term customer relationships.
People also prefer to engage with brands directly:
The direct connection to brands gives consumers peace of mind and allows brands to deliver a top-notch experience. You can build a reputation of credibility and trust with your customers by doing things like localising your channels with the right language and publishing authentic user reviews.
D2C websites can help you provide clear product comparisons, after-sales support, as well as value-added services such as loyalty programs, warranty, and personalised recommendations. So while D2C websites may be perceived as pricier in a crowded market, shoppers are willing to pay a 20% premium for the assurance and value-added services they offer.8
Of course, D2C mobile apps play an equally important role in the shopping journey. 80% of people already have at least one retail app installed, and 72% prefer to engage with brands via their apps.9 When it comes to apps, people are looking for more than just the functionality of shopping online.10 They want a full shopping experience that includes reliable customer service, image search functions, and a wider, "one-stop-shop" functionality.
3. Invest in first-party customer data
Brands can develop a deeper understanding of their customers through the wealth of first-party data gathered from physical store transactions, visits to brand websites, and interactions on social media channels such as YouTube.
First-party customer data also gives an accurate understanding of who you’re selling to and how best to personalise the shopper experience. This requires investing in robust analytics on your websites and apps to harness insights that will enable you to deliver better online experiences.
Don’t feel like you’re making the most of your first-party data? You’re not alone. While 87% of APAC brands consider first-party data critical to their marketing efforts, more than half believe they are below average or average at using it.11 Many brands are also concerned that customers may have privacy concerns and might lack confidence in brands’ cybersecurity infrastructure.
But look at it this way: 70% of people would actually be willing to share more information with retail brands if it meant having a better shopping experience.12 Brands that use this data to tailor the online shopping experience drove an average of 11% more incremental revenue and 18% more cost efficiency.13
At Google, internal studies found that retailers using first-party data earned on average 1.5X more revenue than those that didn’t, and up to 2.9X more revenue when using sophisticated solutions like cross-channel led management.
Amid growing privacy concerns, investing in a first-party data strategy is increasingly a necessity rather than a luxury.
Thrive in the "Great Retail Migration"
In the face of the "Great Retail Migration," brands need to adapt while playing the long game, taking their cue from changing customer behaviours and habits. Now is the time to invest in your brand, D2C website, mobile app and in thoroughly understanding your customers via first-party data. Get more in-depth advice and useful tips on setting up your digital presence in the Google for Retail Playbook 2021.
Contributors: Prajwal Chinta, Strategy and Insights Manager — CPG, Govt & Retail; Daan Suijlen, Industry Manager — Tech & Telco; Adeline Ang, Digital Marketing Associate; Stephan Wu, Strategy and Insights Manager — Tech & Telco