Open navigation IDEAS COMMERCE2021-05-06 India’s e-commerce surge: Fulfilling consumer needs with human experiences Oindrila Roy Share Oindrila Roy of Essence says brands should not lose sight of the human connection as e-commerce features and functionalities continue to open up more opportunities for marketers. The onset of the COVID-19 pandemic brought about multiple consumer behavioural changes, foremost of which was the rapid adoption of e-commerce. In India, from April-May 2020, a consumer report found that there was already an increase of 11% in first-time online shoppers, 16% in new category online shoppers and 30% in online shoppers with larger purchases in existing categories. The country’s e-commerce market is estimated to grow at a 30% compound annual growth rate over the next five years and serve 300-350 million shoppers by 2025. Despite being accelerated by the pandemic, India’s e-commerce growth does not stray far from the predictable trajectory worldwide, which predominantly starts with an increase in shopper penetration. But unlike in mature e-commerce markets like China, where the pace of adoption was in phases, India is likely witnessing mass adoption, increase in shopper comfort and increase in purchase frequency taking place almost simultaneously. One India but many worlds and possibilities India’s e-commerce growth narrative is taking shape differently across the country as its approximately 90 million online shoppers come from a medley of city tiers, income levels and digital fluency. Tier I cities in India are metropolitan with consumers who are seasoned online shoppers and comfortable with user interfaces that are more complex and in English. Their expectations, purchase triggers and shopping journeys differ from consumers residing in Tier II cities and beyond, who are still getting acquainted with online possibilities, especially in commerce as it mitigates the limitations of their location; 97% of postal codes in India have been served by e-commerce, demonstrating its unprecedented reach. In the last quarter of 2020 alone, India’s Tier II and III cities accounted for 90% of year-on-year incremental volume and value growth in e-commerce, highlighting their high growth potential that outpaces that of Tier I cities. From January-June 2019, consumers in Tier II and smaller towns contributed to three out of every five orders for leading e-commerce platforms, fuelled by access to affordable mobile phones, one of the world’s cheapest mobile data services and platform interfaces that support vernacular languages, voice, visual search and video assistance. While their purchase triggers and journeys likely differ from their metropolitan counterparts, they are largely buying the same things, only with a marginal difference in average purchase prices. Irrespective of the differences and similarities between cities, there remains an inherent need fulfilment for all consumers with shopping. It is critical for marketers to understand these needs to be able to ride the surge of e-commerce in the market. 1. Seamless omnichannel shopping experiences Both mature and new online shoppers engage in purchase experiences that include a multitude of touchpoints, all which play a crucial role in the decision-making and purchase journey. For instance, a typical consumer may be inspired on social media, click through to the online shop, potentially visiting a physical outlet to try the product and then order it through an online marketplace for home delivery. Such fragmented shopping behaviours are underscoring the importance of omnichannel retail more than ever and retailers are increasingly shifting away from a product-centric model to one that is customer-centric. According to a study, customers will pay up to a 16% premium on products and services for a great shopping experience but one bad experience can result in 32% of customers walking away from a brand they love. Keeping this in mind, brands today are gradually transitioning out of historical customer relationship management practices and adopting the more popular customer data platforms (CDPs) which can track, map and analyse consumer interactions across channels and platforms – including company-owned websites and mobile apps, social media assets, and in-store data – to provide holistic and data-driven insights through a single, unified view of every touchpoint. The utilisation of CDPs provides two key benefits for brands in the increasingly competitive omnichannel retail space: Data-informed and complete consumer journeys. Brands will be able to unify all their data sources – web, mobile, server and cloud – to get a comprehensive picture of their consumers and their interactions, and therefore piece together a well-informed roadmap of a complete consumer journey. A unified customer experience management system. Brands have easy access to a central data source which assembles and shares unified customer profiles, and are enabled in the activation of that data through various channels of experience management to provide a world-class brand experience to omnichannel shoppers. In short, the data collected and managed through CDPs can help marketers create behaviour and personality-based segments to enable purchase journeys that are more predictive and tailored to individual consumers. For example, shopping for makeup and beauty products online can be daunting for online shoppers. However, personalised profiles created with data from across touchpoints and purchase history can provide unique recommendations that are suited to every consumer’s lifestyle, preferences and needs, and provide confidence that they are buying the right products. Similarly, by analysing individual customers’ spending patterns across retail channels, promotional offers can be tailor-made and offered through personalised ads. Overall, marketers increasingly have the opportunity to leverage collected, actionable insights to create powerful brand narratives by weaving content with commerce and deliver seamless and meaningful shopping experiences that are timely, relevant and engaging to their customers across channels and platforms. 2. Engaging, inspiring and building trust through social commerce While the influx of first-time online shoppers is grabbing headlines, the advent of social commerce, projected to reach over US$50 billion in gross merchandise value by 2025, has also begun changing the retail landscape. Marrying social media’s engaging nature to e-commerce platforms, the rise of social commerce highlights the larger role that peers and communities play in influencing online decisions. Notably, the number of internet users in rural India has overtaken those in metropolitan areas at 227 million versus 205 million. Users across the country spend more than three hours online daily on average – most of which is via their mobile devices, likely for entertainment content, messaging and social media networking. Social commerce naturally taps into these new online behaviours to break the trust-deficit barrier of e-commerce – fear of complex user interfaces, receiving defective products and a lack of understanding on return policies, and above all, missing the human connection. With its interconnection to social media and its communities, social commerce systematically helps to build trust in online shopping for consumers new to the experience. In anticipation of social commerce’s upward trend, e-commerce brands are increasingly finding innovative ways to obtain and integrate social content with e-commerce to transform consumers’ online purchase experience from product discovery to the checkout process. For instance, vernacular content platform ShareChat acquired Elanic, a peer-to-peer marketplace for fashion and lifestyle products, to leverage its insights and expertise for future product development. In the fashion space, Myntra launched Myntra Studio within its existing app to provide consumers with access to original and exclusive content created by fashion influencers. To make the most of social commerce, brands should focus their efforts on three key elements: Invest in the right channels. To drive maximum engagement and retail outcome, brands must first understand which channels and platforms their customers are most comfortable using, as well as their content consumption patterns and engagement behaviour in those channels. Accordingly, they can then create strategies that optimise shopping experiences in those relevant channels. Focus on user-generated content. User-generated content, which includes images, videos and reviews that consumers post on social networks, is generally viewed as, making it a valuable resource and storytelling tool for marketers to leverage. Brands must find ways to incentivise consumers to create and share such content to drive positive brand experiences and boost tangible retail results. Seamless and shorter consumer journeys. Brands should ensure that their end-to-end purchase process is as frictionless as possible, and leverage platform features such as shoppable posts and social checkout features where possible. 3. Create brand familiarity by leveraging existing online behaviour As e-commerce evolves and matures, industry players have been and will likely continue adding to their core e-commerce businesses, with sticky service offerings such as video streaming, gaming and user-generated content, thereby attracting potential customers by leveraging their existing online behaviour. To build brand familiarity, brands must first comb through their existing consumer data to derive insights on consumers’ online behaviour and identify the most lucrative hook to draw potential shoppers to their platform. For example, in 2019, as more new to internet users from small towns and beyond came online in search of entertainment, Flipkart launched its free video streaming service on its existing Android app. By doing so, it raised brand awareness and discoverability amongst its potential audience. The strategy was likely to get new users familiar with the brand and platform experience, and attract them to eventually explore Flipkart’s flagship retail experience as well. 4. Human touch in online retail experiences For potential and new e-commerce shoppers, one of the biggest barriers is the absence of the human touch, versus seeking assistance and recommendations from retail staff in a physical store. That is relentlessly being broken by brands utilising technology to deliver more human experiences. Conversational technology, for instance, in e-commerce can bring alive the human and assisted aspect of shopping. Targeting customers in rural India, as well as Tier II and III cities, Flipkart’s smart assistant Saathi mimics the physical retail experience for first-time e-commerce users, where the salesperson’s assistance is delivered in the form of text and audio-based instructions to help customers make purchases via the platform. For brands wanting to scale up through new internet users, the gap between offline and online retail experiences can be further bridged with the delivery of content in vernacular languages – personalising user experiences at scale, creating a bigger impact on purchase decisions and better guiding shoppers from indecisive browsing to carting out. After all, in India, 90% of new internet users consume content and one-third of Google Assistant users interact with the voice assistant in their local language. Shopping is all about the experience While there is currently a rapid surge in e-commerce driven by COVID-19, and the need for convenience, speed, value and safety, sustaining its growth will depend on the kind of experience brands are able to provide. Shopping has always been more about the experience than the transaction. Brands that can leverage technology to create a more human experience are the ones that will emerge winners in this competitive landscape. This article was originally published in WARC and is part of its Spotlight series on what e-commerce 2.0 means for brands in India. 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