A few years ago, digital commerce and real-world customer service were often thought of as separate channels, but that is quickly changing, writes ANDRE STEENEKAMP, CEO of 25AM.
Just five years ago, the worlds of digital commerce and real-world customer service were separated by a massive chasm. Indeed, many organisations thought of them as separate channels rather than as part of an integrated customer experience. That picture is changing fast.
Consumers’ adoption of smartphones, the rise of big data analytics tools, and the emergence of the Internet of Things all mean that the real-world and digital customer experiences are moving closer together. Thanks to smartphones (and in the future, wearable computers, connected car technology, and other devices), marketers can interact with customers wherever they are.
What’s more, they can collect a wealth of contextual data (customer behaviour, location and more) that they can use to shape new customer experiences. Increasingly, leading companies are not just using this data to optimise online customer experiences, but also those that take place in the real-world.
Here are a few ways that we can expect marketers to put data to work this year and beyond:
A large and growing portion of consumers carry smartphones with them wherever they go – devices that can give marketers a wealth of contextual information they can use to deliver delightful customer experiences. Imagine, for example, putting it to use to streamline workflow in busy branches or stores, while sparing the customer the inconvenience of standing in a long queue.
For example, a consumer could use an app for a fast-food store to order a meal while walking from the mall parking lot. He or she could browse the menu (which might be personalised according to data from earlier interactions with the store), choose an item, and pay. By the time the customer gets to the shop, the order is ready.
Wouldn’t that be a refreshing way to deal with the long popcorn queues at the movies or the wait for a takeaway coffee during a busy lunch time break? This could help companies shrink queues, improve customer satisfaction, and start reducing the need to manage cash in their businesses. Even better, it gives marketers a wealth of rich information they can use to offer ever richer, more relevant, and more personalised services and messaging to their customers on an ongoing basis.
Beacons – such as Apple’s iBeacon technology – are increasingly becoming a feature in stores around the world. This technology allows a mobile app to recognise when a smartphone is near a small wireless sensor called a beacon. For example, if you walk past a supermarket, the beacon will recognise you and start transmitting promotions, coupons or product recommendations that are relevant to you, based on your purchasing history.
It will track you as you walk through the store, capture the aisles that interest you and track your customer journey right through to the moment of payment. This is a potentially powerful way for companies to deliver personalised specials and messages to consumers as they move through the store. It can also help companies to adapt their store layouts according to real customer behaviour.
Virtual reality and augmented reality marketing
Virtual reality (VR) is going to be big news this year with HTC, Sony PlayStation, Samsung and the Facebook-owned Oculus Rift having launched, or planning to launch, VR headsets in 2016. Google, for its part, has already hacked together a simple VR solution made from little more than a box and an Android smartphone.
VR allows one to immerse oneself in a 3D world, with a sensation of “presence”. For example, you could wander through a virtual recreation of the Louvre in Paris to browse its great art works. In addition to its potential for education or virtual tourism, VR is likely to have significant gaming and entertainment applications.
There will be many great advertising and marketing opportunities in VR. For example, while someone is immersed in a VR application, marketers will be able to talk to him or her through signage or branded items in the virtual world. Or a user could do a VR tour of potential hotels before making his or her holiday bookings.
This technology is expensive and immature, but full of exciting potential. In the meanwhile, augmented reality offers some interesting ways to extend a customer’s real-world experiences by overlaying computer-generated content over a live image viewed through a digital camera.
Imagine a shopper looking at a product in a store window through a digital camera and seeing an overlay of the features and benefits. Or consider someone walking down the promenade in Greenpoint, Cape Town, and seeing an augmented reality map of the best places to shop and dine layer onto his or her smartphone screen.
Another trend I expect to see start unfolding soon is a shift towards social rewards programmes, which take advantage of customers’ natural sociability. They’ll reward customers for using their social influence to the brand’s advantage, for example, by sharing their location or a recent purchase with their friends.
Such programmes could cause a resurgence for mobile apps. Most corporate apps failed to set the world on fire because marketers struggled to monetise them and get the sort of engagement they wanted with consumers. Now, social media offers an opportunity to create a community around the brand and to reward them.
Apps will be integrated with social media at a deep level. Customers will, for example, be able to easily share purchases, location, and other data with their friends, and be rewarded with points, coupons, or other incentives for doing so.
As the examples above show, digital customer experiences are no longer confined only to the PC or the smartphone – they’re a pervasive part of the experiences customers have at every touchpoint. Leveraging digital data to create better, more personal and more complete customer experiences across every channel is an opportunity that marketers cannot afford to ignore.
Online retail gets real
After decades of experience in selling online, retailers still seek out the secret of reaching the digital consumer, writes ARTHUR GOLDSTUCK.
It’s been 23 years since the first pizza and the first bunch of flowers was sold online. One would think, after all this time, that retailers would know exactly what works, and exactly how the digital consumer thinks.
Yet, in shopping-mad South Africa, only 4% of adults regularly shop online. One could blame high data costs, low levels of tech-savviness, or lack of trust. However, that doesn’t explain why a population where more than a quarter of people have a debit or credit card and almost 40% of people use the Internet is staying away.
The new Online Retail in South Africa 2019 study, conducted by World Wide Worx with the support of Visa and Platinum Seed, reveals that growth is in fact healthy, but is still coming off a low base. This year, the total sale of retail products online is expected to pass the R14-billion mark, making up 1.4% of total retail.
This figure represents 25% growth over 2017, and comes after the same rate of growth was seen in 2017. At this rate, it is clear that online retail is going mainstream, driven by aggressive marketing, and new shopping channels like mobile shopping.
But it is equally clear that not all retailers are getting it right. According to the study, the unwillingness of business to reinvest revenue in developing their online presence is one of the main barriers to long-term success. Only one in five companies surveyed invested more than 20% of their online turnover back into their online store. Over half invested less than 10% back.
On the surface, the industry looks healthy, as a surprisingly high 71% of online retailers surveyed say they are profitable. But this brings to mind the early days of Amazon.com, in 1996, when founder Jeff Bezos was asked when it would become profitable.
He declared that it would not be profitable for at least another five years. And if it did, he said, it would be in big trouble. He meant that it was so important for long-term sustainability that Amazon reinvest all its revenues in customer systems, that it could not afford to look for short-term profits.
According to the South African study, the single most critical factor in the success of online retail activities is customer service. A vast majority, 98% of respondents, regarded it as important. This positions customer service as the very heart of online retail. For Amazon, investment back into systems that would streamline customer service became the key to the world’s digital wallets.
In South Africa online still make up a small proportion of overall retail, but for the first time we see the promise of a broader range of businesses in terms of category, size, turnover and employee numbers. This is a sign that our local market is beginning to mature.
Clothing and apparel is the fastest growing sector, but is also the sector with the highest turnover of businesses. It illustrates the dangers of a low barrier to entry: the survival rate of online stores in this sector is probably directly opposite to the ease of setting up an online apparel store.
A fast-growing category that was fairly low on the agenda in the past, alcohol, tobacco and vaping, has benefited from the increased online supply of vapes, juices and accessories. It also suggests that smoking bans, and the change in the legal status of marijuana during the survey, may have boosted demand.
In the coming weeks, we can expect online retail to fall under the spotlight as never before. Black Friday, a shopping tradition imported “wholesale” from the United States, is expected to become the biggest online shopping day of the year in South Africa, as it is in the USA.
Initially, it was just a gimmick in South Africa, attempting to cash in on what was a purely American tradition of insane sales on the Friday after Thanksgiving Day, which occurs on the third Thursday of November every year. It is followed by Cyber Monday, making the entire weekend one of major promotions and great bargains.
It has grown every year in South Africa since its first introduction about six years ago, and last year it broke into the mainstream, with numerous high profile retailers embracing it, and many consumers experiencing it for the first time.
It is now positioned as the prime bargain day of the year for consumers, and many wait in anticipation for it, as they do in the USA. Along with Cyber Monday, it provides an excuse for retailers to go all out in their marketing, and for consumers to storm the display shelves or web pages. South African shoppers, clearly, are easily enticed by bargains.
Word of mouth around Black Friday has also grown massively in the past two years, driven by both media and shoppers who have found ridiculous bargains. As news spreads that the most ridiculous of the bargains are to be had online, even those who were reticent of digital shopping will be tempted to convert.
The Online Retail in SA 2019 report has shown over the years that, as people become more experienced in using the Internet, their propensity to shop online increases. This is part of the World Wide Worx model known as the Digital Participation Curve. The key missing factor in the Curve is that most retailers do not know how to convert that propensity into actual online shopping behaviour. Black Friday will be one of the keys to conversion.
Carry on reading to find out about the online retailers of the year.
Reliable satellite Internet?
MzansiSat, a satellite-Internet business, aims to beam Internet connections to places in South Africa which don’t have access to cabled and mobile network infrastructure, writes BRYAN TURNER.
Stellenbosch-based MzansiSat promises to provide cheap wholesale Internet to Internet Service Providers for as little as R25 per Gigabyte. Providers who offer more expensive Internet services could benefit greatly from partnering with MzansiSat, says the company.
“Using MzansiSat, we hope that we can carry over cost-savings benefits to the consumer,” says Victor Stephanopoli, MzansiSat chief operating officer.
The company, which has been spun off from StellSat, has been looking to increase its investor portfolio while it waits for spectrum approval. The additional investment will allow MzansiSat’s satellite to operate in more regions across Africa.
The MzansiSat satellite is being built by Thales Alenia Space, a French company which is also acting as technical partner to MzansiSat. In addition to building the satellite, Thales Alenia Space will also be assisting MzansiSat in coordinating the launch. The company intends to launch the satellite into the 56°E orbital slot in a geostationary orbit, which enables communication almost anywhere in Africa. The launch is expected to happen in 2022.
The satellite will have 76 transponders, 48 of which will be Ku-band and 28 C-band. Ku-band is all about high-speed performance, while C-band deals with weather-resistance. The design intention is for customers of MzansiSat to choose between very cheap, reliable data and very fast, power-efficient data.
C-band is an older technology, which makes bandwidth cheaper and almost never affected by rain but requires bigger dishes and slower bandwidth compared to Ku-band connections. On the other hand, Ku-band is faster, experiences less microwave interference, and requires less power to run – but is less reliable with bad weather conditions.
MzansiSat’s potential military applications are significant, due to the nature of the military being mobile and possibly in remote areas without connectivity. Connectivity everywhere would be potentially be life-saving.
Consumers in remote areas will benefit, even though satellite is higher in latency than fibre and LTE connections. While this level of latency is high (a fifth of a second in theory), satellite connections are still adequate for browsing the Internet and watching online content.
The Internet of Things (IoT) may see the benefits of satellite Internet before consumers do. The applications of IoT in agriculture are vast, from hydration sensors to soil nutrient testers, and can be realised with an Internet connection which is available in a remote area.
Stephanopoli says that e-learning in remote areas can also benefit from MzansiSat’s presence, as many school resources are becoming readily available online.
“Through our network, the learning experience can be beamed into classrooms across the country to substitute or complement local resources within the South African schooling system.”