With many retailers have had to close their physical shops and rely only on online for a significant portion of 2020, the fourth, and so-called ‘golden’, the quarter will be more important than ever to recoup lost sales, says Stuart McLennan, the senior vice president of Asia Pacific at Rakuten Advertising.
Upcoming peak dates such as Black Friday, Cyber Monday and Boxing Day will be critical to help brands on the road to recovery.
The good news is that indications suggest consumers still plan to spend big over the peak shopping season. 43% of retailers expect traffic levels to exceed pre-coronavirus levels during the 2020 peak shopping period. Over 70% of shoppers do not plan to decrease spending at all this year and 73% of holiday shoppers will purchase primarily online, regardless of a potential return to lockdown.
That said, the impact of Covid-19 will be felt. Here are the key consumer trends we have seen from our recent research and network data that retailers should use to build their strategies and drive revenue in this year’s unique golden quarter.
Social commerce is on the rise
As people have adapted to the pandemic, they have changed how they shop. Asian consumers are engaging with brands on social media more than ever, before making a purchase. This channel continues to increasingly inspire shoppers throughout the purchase journey.
Of people making online purchases, consumers in Asia prefer to engage with brands through social media and mobile or chat applications, with Facebook being the most popular platform - notably in Hong Kong, Taiwan and Malaysia – followed by Instagram and YouTube. In China, WeChat and Weibo continue to dominate the social media landscape.
This provides a prime opportunity to introduce a brand to new customers at the start of the journey and also retain a strong connection with existing shoppers. Furthermore, brands can better understand customer behaviour and work to optimise the consumer experience, no matter which platform they choose.
Personalisation for heightened consumer engagement
Touches of personalisation go a long way in sealing a brand in a consumer’s mind. With more time spent online, consumers are discovering content creators and brands they might not have noticed previously. In an effort to increase conversion, brands can use this opportunity to add a touch of personalisation in their marketing by sending out a customised email or video to customers thanking them for their order.
Video content is not only a channel for showcasing brand messaging, but is ideal for marketing on platforms such as Facebook, Instagram and YouTube. Over 50% of consumers in Southeast Asia have increased their usage of VOD services such as Netflix and Rakuten Viki, and almost half of these are first-time users who will continue to use VOD services post-pandemic.
When considering personalisation as part of a digital marketing strategy, audience segmentation is key. Advertisers should consider creating a plan for each publisher partner based on their audience’s interests and demographics. This will ensure brands deliver personalised, dynamic messages to target the right customers at the right time.
Discounts are still king in Asia
While it is important for retailers to continue to invest in technology to improve reach and engagement, sales and discounts still reign in Asia. This trend remains even more pronounced as consumers continue to be more cautious about their spending as they come out of lockdown. It has been revealed that over 60% of consumers in Taiwan, Malaysia and Singapore subscribe to regular brand newsletters to receive coupons and updates about promotions.
For brands, cashback and rewards sites will be influential platforms to incentivise shoppers to make a purchase. In fashion, voucher and coupon publishers have been particularly effective in driving conversions.
‘Dynamic commissioning’, where retailers increase cashback on products or categories with higher margins, higher price points, or based on seasonal trends, can be used to stimulate purchases. For publishers, many advertisers offer a higher commission for new customers to encourage acquisition or a flat rate to ensure loyal customers are rewarded.
‘Voucher code commissioning’ also lets advertisers track the effectiveness of particular partnerships. Advertisers can use exclusive codes to boost conversions while ensuring commission is only paid to the publishers with active campaigns.
Many advertisers are also using AI tools to provide publishers with the ability to serve personalised ads and discounts based on past shopping behaviours. Using a tailored approach to communicating value will further encourage brand engagement.
Continual optimisation during and beyond the golden quarter
Alongside optimism about spending over the golden quarter, 54% of global consumers have said there will be no change to their spend for key shopping dates in early 2021, such as Chinese New Year and Valentine’s Day.
With shopping behaviour continually shifting as the pandemic evolves, being able to make smarter content decisions in real-time will remain imperative.
Brands can utilise Affiliate Consumer Graph for campaigns in Q4 and into 2021 to gather unique insights based on consumers’ browsing and shopping behaviour. They can then strengthen their campaigns based on this information. This means brands can create more personalised experiences that are relevant to the consumer’s mindset and target them based on their purchase history.
Ultimately, the road to recovery is likely to have twists and turns. Performance across the 2020 peak shopping period should be used by brands to build strategies for 2021. It will be crucial that retailers continue to closely monitor shopping behaviour throughout the year so they are ready to continually adapt.
Stuart McLennan is the senior vice president of Asia Pacific at Rakuten Advertising