Global e-commerce tactics to keep retail business alive - SmartBrief

As the coronavirus crisis has covered the globe this year, Western retailers and brands can learn from China’s retail industry resilience.

In particular, China’s retailers and supermarkets have long been integrated with e-commerce and online marketing channels, partly thanks to strong efforts by digital giants Alibaba and Tencent, the country’s dominant players in e-commerce and social media.

So when draconian stay-at-home measures were instituted to fend off the coronavirus pandemic, many of China’s retailers were able to stay alive through on-demand delivery services, livestreaming e-commerce platforms and private WeChat groups. The digital infrastructure and consumers’ online shopping habits were already firmly established.

These tactics have come to serve customers well over the last few months, providing food delivery, groceries and valuable entertainment for the nation’s 712 million smartphone users, most of whom have been stuck at home.

We take a deeper look at how demand for these global e-commerce best practices has skyrocketed and how they can help your retail business survive the coronavirus crisis.

China’s on-demand delivery infrastructure pays off

China benefits from low-cost labor and relatively dense populations living in urban cities. Unlike the United States, China has few suburban areas where people live in large two-story homes and drive to work every day. China is primarily divided into urban and rural areas; as of 2018, approximately 60% of China’s 1.4 billion citizens lived in urban areas.

China’s scenario makes it easier for on-demand delivery services such as Alibaba’s Eleme and Meituan Food Delivery to achieve economies of scale. When you have large apartment complexes of 10-15 buildings each with 40 floors of apartments, a delivery worker can make many deliveries in one trip, lowering the average cost of a transaction. 

Just to show how prevalent on-demand food and grocery delivery is in China, top food delivery platform Meituan Dianping’s four million delivery riders made a whopping 8.7 billion deliveries in 2019, according to its most recent annual report. That’s 392.7 billion RMB (US$55.45 billion) in meals and groceries – and this figure is 38.9% higher than in 2018, indicating that there’s still room for growth.

During the coronavirus pandemic, most restaurants in China shut down in-store dining altogether and limited options to take-out and delivery. And yet many were operating at full speed due to the prevalent nature of the abovementioned mobile commerce delivery services. Many apartment complexes set up centralized no-contact collection stations where delivery workers could drop off food and groceries, notifying customers with automated text messages to their mobile devices. 

Can the US achieve a similar feat?

In more densely packed cities such as New York, Chicago and San Francisco, it’s definitely possible. Citizens, merchants and platforms alike should push for apartment buildings to set up centralized collection stations to keep delivery riders safe.

While labor costs are higher in the US than they are in China, delivery platforms may be able to make a higher number of deliveries due to increased demand, lowering the average cost of a delivered meal. And since nowadays people are more likely to be staying with relatives, merchants should be willing to offer discounts for bulk purchases.

Fashion, beauty retailers turn to online entertainment 

Some of the hardest-hit categories in the retail space have been fashion, luxury and beauty, all of which depend heavily on offline sales and are considered discretionary consumer categories. Not only are brick and mortar retail stores closed, but people are staying inside for extended periods of time, reducing the need to buy new clothes, handbags, and makeup products.

In China, most brands in these categories have doubled down on e-commerce during the coronavirus pandemic. But how does one stand out when every other brand in the country is trying to do the same thing? 

Two interesting methods have been the use of livestreaming and private WeChat traffic groups. 

With livestreaming, brands hire a top influencer to give a QVC-like product demonstration on Taobao Live, Alibaba’s top streaming platform for e-commerce. An influencer will discuss the brand, answer any questions, and even offer raffles and product samples to keep people interested. At any time during the session, customers can click on the product page and make a purchase with Alipay, Alibaba’s mobile payments platform. 

The costs of hiring an influencer are steep -- some influencers can ask for commissions of 30% or more -- but it’s a good way to drive excitement, impulse purchases and immediate sales conversions. An added benefit is that brands can raise awareness among a newer niche customer group that they haven’t been able to reach in the past. 

Burberry invited a top key opinion leader, Yvonne Ching, to visit its Kerry Center store in Shanghai; the Kerry Center is one of the most high-end shopping malls in the city. During the video, Ching freely walked around the store so that the camera could give viewers a more realistic shopping experience. The video attracted over 1.4 million views, selling out most of the featured products within just an hour. 

Could such a phenomenon occur in the US?

Amazon has been experimenting with its Amazon Live platform, but there is one important yet subtle difference in that the brands tend to be less well-known brands. The more premium brands prefer to sell through their official brand website. In China, official brand websites are less common as Taobao/Tmall quickly became the dominant e-commerce platform as Chinese internet users started to move to smartphones for the first time.

Additionally, in China, the brands that tend to have the most success are the larger ones who are well-known and have big budgets to afford to work with the top influencers. Influencers do a good job at converting customers who are on the fence, but only the top ones are able to get fans to buy a product they’ve never heard of before. Since the brands selling on Amazon Live tend to be less well-known, there may be difficulties in getting livestreaming e-commerce to work out.

Nevertheless, it is still early to tell and it remains to be seen how both merchants and customers alike will be receptive to livestreaming in the United States.

With private traffic groups, brands and online retailers have asked store employees to make use of their free time by setting up 500-person WeChat groups for VIP customers. The store employees then dispense fashion and beauty tips, as well as discount promotions. This is especially the case for luxury brand stores and beauty counters at department stores, where deeper customer engagement is a crucial part of the shopping experience.

The idea is that:

1. Customers are more receptive to instant messages than e-mail messaging in China, and
2. Group settings can drive more engagement and entertainment than in one-on-one settings.

In China, connections are influential, as consumers tend to be social buyers who seek confirmation and approval from their peers before making purchases.

One notable brand making use of this is China’s local sportswear brand, Anta Sports. This particular company asked 30,000 of its store employees and distributor partners to help sell products on WeChat. The company gave each of them customized QR codes on WeChat so that customers could pay with WeChat Pay; the QR codes were designed to keep track of commissions for each employee.

In other cases, brands may also roll out interactive WeChat games to keep people entertained, distributing them in these WeChat groups and inserting product ads in the games to remind customers to make purchases. Top beauty brand Perfect Diary released a Valentine’s Day game in which the user has to complete challenges to protect the “lonely single dog” from harm. In China, being single is frowned upon and the term “lonely single dog” has become popular in the everyday use of slang among Chinese millennials.

Key Takeaways

1. China’s on-demand delivery services infrastructure has kept the country running and well-fed throughout the coronavirus pandemic. Similar services in the US may see a surge in demand as people stay at home and restaurants have no choice but to resort to delivery services to drive revenues.
2. Livestreaming e-commerce has proved to be particularly popular as brands seek to entertain bored shoppers stuck at home. While livestreaming can’t completely replicate an offline luxury store experience, it’s the closest a brand can come to doing so online, and many brands have been successful at using influencers to drive sales conversions.
3. Another common tactic is the use of private WeChat traffic groups, in which store employees set up 500-person WeChat groups to circulate beauty tips, articles, promotions, and even interactive games to keep people entertained. This helps increase engagement and cultivate the customer for future purchases.

Franklin Chu is managing director the US for Azoya International, a provider of turnkey cross-border e-commerce solutions to assist retailers looking to expand into China through a cost-effective and lower-risk method. To date, over 35 retailers in 11 countries are partnering with Azoya to expand into China with ease.

If you enjoyed this article, sign up for SmartBrief’s free email from the National Retail Federation. It’s among SmartBrief's more than 250 industry-focused newsletters.

Let's block ads! (Why?)

"tactic" - Google News
May 06, 2020 at 01:13AM
https://ift.tt/2WuSpgi

Global e-commerce tactics to keep retail business alive - SmartBrief
"tactic" - Google News
https://ift.tt/2NLbO9d
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update

Bagikan Berita Ini