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Prepare for marketing megatrends

Social Places has identified seven digital marketing megatrends that will shape the martech industry this year, writes director ASHLEIGH WAINSTEIN.

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New tech tools take hold and consumer behaviour moves ever faster towards instant communication and results. Ashleigh Wainstein, director of martech firm, Social Places, says seven key trends will define digital marketing in 2020:

1. Data visualisationwill become even more important, particularly the consolidation of all marketing and operational touchpoints into a single dashboard that offers quick visual insights into a business –  its performance and relationship with its customers. Data doesn’t mean much without the tools used to visualise and analyse it. All business channels – online and offline – have to be integrated into this single view and this can be a challenge, but the rewards are great. 

2. Artificial Intelligence (AI)-powered insights are possible once data has been collected and formatted.. AI tools are able to look at much larger datasets than humans and can draw correlations across business events quickly, flagging insights and anomalies. The software picks the trends and then people can unpack these, analyse them and make more informed business decisions. For example, AI can take 50 marketing channels – billboards, local messaging, Facebook and so on, and can tell you what marketing channels achieve the most with whom and when – the detail is incredible. It interrogates the metrics and can make suggestions and recommend marketing opportunities. These are based on data rather than human assumptions or biases.

3. Local messagingis becoming increasingly significant because local content trumps brand messaging when talking to consumers. It comes down to authenticity and relevance – and technology lets businesses talk to consumers, via many channels, one-to-one. Global brands have long since steered away from big generic messaging. We can see how their messaging varies between countries and even within territories. Brands are now identifying that this needs to be taken further ,with different branches tailoring their messaging on a community (suburban) level, to suit their individual clients’ needs, because every store’s customers are different. When it comes to messaging, don’t waste your budget – one size does not fit all and brands get three times the customer engagement using local, customised content then they do with blanket messaging.

4. Expectations around reviews is growing among consumers and this is reflected in the growth of near-me searches and review stats – proximity stats have jumped 500 percent in the last two years and show no signs of slowing. Consumers prefer to interact with a brand digitally instead of through call centres and more than 80 percent trust online reviews as much as a personal recommendation. They do expect quick responses to any review they give – positive or negative – and companies need to be prepared for this.

5. Growth of Loyalty Clubswill accelerate in 2020 as more brands go this route because the data they produce is valuable. Organisations are better able to understand their customers using the data they acquire from their loyalty programmes. It’s a win-win situation – brands give customers rewards  and as they know more about their customers are able to communicate through the most relevant channel and this in turn results in increased loyalty.

6. Marketing Automation with Personalisation simplifies communication with consumers based on their preferences. Historically, multiple teams were required to create and send targeted messaging. Increasingly sophisticated tools are now able to identify consumers’ preferences, as well as which channels they prefer to receive communications on, and send intelligent, useful and relevant marketing messages to them.

7. Brands will place less emphasis on“influencers” with a large number of followers – there will be more relevant content being produced by smaller, on-the-ground nano-influencers who are in touch with their immediate community. This ties in with brands moving towards local messaging which is more relevant and authentic for consumers.

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The shape of the SME future

What does the future of technology look like for South Africa’s SMEs? COLIN TIMMIS, general country manager of Xero SA and a professional accountant, looks into the tech crystal ball

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Over the past decade, technology has radically changed the way businesses operate. Now, even small businesses have access to powerful tools that were previously expensive or complicated.

The pace of change has been rapid – and it’s unlikely to slow down. Businesses must keep up with technology to stay competitive. According to research conducted by Citrix, 92% of companies across South Africa’s key industries agree that digital adoption directly affects company profits. However, 54% still feel unprepared for the future.

So, what does the future of technology look like for South Africa’s small businesses? How can the other 46% of companies prepare?

5G and WiFi 6 – faster internet speed

In the foreseeable future, we will see a rapid increase in the use of fibre across South Africa. According to Xero’s State of Small Business Report produced with World Wide Worx, 49% of small businesses surveyed used ADSL connections and only 37% used fibre. When asked to describe their internet connections, 45% said they were ‘great’, while 43% said they were ‘okay but not 100% reliable’. 57% of those who said their connection was ‘great’ were fibre users.

South Africa is still playing catch-up in terms of internet connectivity and speed. However, WiFi 6 is set to improve the way routers distribute traffic to connected devices and increase the transfer speeds by around 30%. For when you’re on the go, 5G is the next generation of mobile data standard. It’s already being trialed by South African carrier Rain, and a broader rollout is expected in 2020.

Machine learning and Artificial Intelligence – more efficient software

Even if you aren’t aware of it, you’re probably already using smart software which leverages machine learning (ML) and artificial intelligence (AI) in your business. While only a tiny proportion of respondents (0.25%) from Xero’s State of Small Business Report say they are using them, most businesses are aware of how important they are.

AI and ML are great at taking large amounts of data and spotting patterns that humans might miss. They help businesses cover some of the more routine tasks so they are freed-up to focus on the most important priorities. For example, tedious tasks like bank reconciliation, can now be completely automated.

Blockchain – safer, more secure transfers

If you hear ‘blockchain’ and think ‘cryptocurrency,’ you’re not alone. However, the technology also has something to offer when it comes to existing payment technologies. Through its complexity and high level of encryption, integration with blockchain can make transferring valuable assets more secure. It can also be used for more effective fraud prevention and other security-focused tasks.

The cloud – access data everywhere

Cloud computing is starting to become a standard part of life for many small businesses in South Africa today. According to Xero’s State of Small Business report, 19% of respondents surveyed make use of cloud technology. Of these respondents, 98% reported a significant increase in profit thanks to adopting this technology – and 99% identified an increase in efficiency.

The trend towards cloud adoption is likely to continue as we see the development of technologies, like faster speed through fibre, WiFi 6, 5G, and machine learning powering it.

Integrated financial software

When it comes to accounting in a small business, these new technologies will enable much smarter ways of working. Take bank reconciliation, for example, where cloud storage and machine learning will search through documents and expenses on your behalf to compile reports.

Eventually, we will be able to access everything we want in one integrated, seamless hub. We can see this development through the use of app integration. Xero has 800+ apps already compatible, which enables small businesses to automate, gain better insight and grow their businesses all through one ecosystem of partners.

Access to capital

Open banking, the process of banks and financial services opening their APIs to the market, will shape how businesses access funding. By sharing their financial data instantly, potential investors have immediate access to a company’s revenue, profits and cashflow – enabling them to make fast, informed decisions.

Platforms like Xero keep all of a company’s financial data up to date. That way, when the company needs to file for a loan their documents are ready to go. Xero is also continuously pursuing new partnerships to help fuel small business growth. Earlier this year Xero partnered with three new alternative lenders, to help improve access to funding.

Digital adoption offers an island of stability in the volatile South African economy. Technology allows businesses to run more efficiently, remain globally integrated, and maximise their profits. Companies which keep up with the latest technology, from incorporating it into their processes to training staff, will have a real advantage over their competitors.

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Cash is here to stay, and other trends shaping payments

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As we enter the next decade, local and African merchants should support payment methods that suit their customers, rather than following global trends just for the sake of it. Peter Harvey, MD of payment service provider, DPO SA, looks at five trends we can expect over the next few years.  

  • Cash is here to stay – for now

Despite common perceptions, South Africa still has more than 11 million unbanked individuals and cash remains the preferred payment method for these and many other customers. 

Harvey says: “As we enter 2020, we can expect a host of new digital payment technologies that sound like excellent options – and they may well be for some – but merchants need to carefully monitor their customer behaviour before they rush to try the latest gadget or fad.”

According to Harvey the banks and card companies like Visa and Mastercard will be placing a large focus on enticing consumers to move from cash to card-based payments in the coming years. 

“Overcoming the reliance on cash will take a fair amount of time and effort,” says Harvey. “For merchants trading in a cash-based community, depositing money into a bank that tracks your spending, charges you to store your money, and then charges you again to withdraw it can seem unattractive. At the end of the day consumers will make their decision based on convenience, cost and risk.” 

Card payments are expected to morph over the coming years. In South Africa the tap and pay method is becoming more commonplace. Harvey believes this and other near field communication (NFC) methods of card payments will continue to grow in use as shoppers become more trusting of the technology and retailers see the efficiency benefits of moving customers through their purchase cycle more quickly and easily. 

  • Mobile is still king 

There is no doubt that the means to facilitate most digital payments in Africa will depend on mobile technology. 

According to South African communications regulator, ICASA, South Africa has a smartphone penetration of 80%. In Sub-Saharan Africa meanwhile, the mobile phone penetration is 50% and the GSMA expects smartphone penetration to grow from around 40% to 66% in 2025. 

Harvey says smartphone technology and wearable technology will allow for the growth in some of the newer payment tech, like Apple Pay and Samsung Pay, but these payment methods will remain in the hands of the top LSMs and have little effect on the bottom of the pyramid customer base. 

“For the moment USSD technology will still underpin the majority of mobile payment methods. Until smartphones increase in penetration, payments like m-Pesa will continue to dominate. Customers know and trust the solution and its these types of offerings that will need to be beaten by any new entrant over the next two to three years at least.”

  • New decade, new banks 

Harvey is upbeat about the new digital-only bank offerings like Tyme Bank, Bank Zero and Discovery Bank. 

“It appears that 20Twenty was two decades too soon,” says Harvey. “The local markets are now finally ready for a new digital offering without the fuss and cost of the traditional offering. These banks stand a good chance of making an impact and making headway towards financial inclusion in the country.”

Harvey believes, that in order to boost the number of people using digital payments, the banking institutions, merchants and payment service providers need to start incentivising consumers to make the switch. Loyalty and Rewards will start playing an even bigger role in the near future.

  • New services for the payment ecosystem

Based on demand, Harvey believes forward thinking payment service providers will work closely with their banking partners to focus on providing their mutual merchants with a ‘fully managed service’. This service includes: instant sign-up; a full suite of payment products; risk screening; account reconciliation; anti money laundering checks; access to shopping cart plugins; and a variety of other value-added services in the online digital payment space.  

These services will enable digital retailers to quickly and easily start selling their services online, while protecting them from the associated risks.

The service benefits the banks as well as the broader digital ecosystem, as the payment service provider actively monitors and manages merchants and transactions, removing risk from the process and facilitating ‘good’ transactions.

  • Identity technology takes centre stage

Looking at newer technologies, Harvey believes biometrics will continue to be the key focus.  

Harvey says voice and facial recognition are set to take off in South Africa in 2020 and 2021 and he believes the key driver in this regard is the increasing use by the government. 

“Banks and Home Affairs teaming up for the renewal of ID documents and passports is a major win for the average citizen,” Harvey says. “This falls neatly into the ‘convenience’ motivator and as people use and trust the biometrics used by the banks for this service,  they will become less afraid to try it for payments.”

As technology rapidly improves, the payments ecosystem can expect some exciting advancements over the coming decade. Chat commerce and even augmented and virtual reality developments will almost all come with payment features. However, Harvey cautions against over exuberance. 

Harvey says “Make sure you cater for what your customer actually wants, not what you think they should want. If working closely with African merchants, banks and customers has shown us anything, it’s that the fastest way to drive away business, is to dictate how customers pay. Provide the options and let them choose.”

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