E commerce strategy during covid 19 downturn - B2C Growth Summit by GMC
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As the whole world is affected by uncertainty, there are still some learnings from the previous downturns. What are these learnings and how we can apply them to craft a dynamic strategy that takes into account the psychographic segmentation and behavior insights?
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E commerce strategy during covid 19 downturn - B2C Growth Summit by GMC
- 1. eCommerce Strategy during Covid-19 downturn
- 3. “I think there is a world market for maybe 5 computers.” Thomas Watson, chairman of IBM, 1943 The mortality rate among women in the section of the maternity ward where Semmelweis practiced was 1 in 10.
- 4. “I think there is a world market for maybe 5 computers.” Thomas Watson, chairman of IBM, 1943 A second section of the maternity ward had a mortality rate of 1 in 50, much better than the rate in Semmelweis’ section.
- 5. “I think there is a world market for maybe 5 computers.” Thomas Watson, chairman of IBM, 1943 During a four-month leave to another hospital, something intriguing happened. The mortality rate in his section had fallen significantly
- 6. “I think there is a world market for maybe 5 computers.” Thomas Watson, chairman of IBM, 1943 Semmelweis started to investigate the research done by the doctors on cadavers.
- 7. “I think there is a world market for maybe 5 computers.” Thomas Watson, chairman of IBM, 1943 As a result, a policy was instituted that required doctors to wash their hands thoroughly. The death rate immediately plummeted to 1 in 100
- 8. What if I am the problem?
- 9. What if I the management is the problem?
- 15. Experience No action, low memorability Emotions Positive Negative Action, high memorability No emotions
- 17. Is acquisition generated by: Emotions or Ration?
- 18. 95% of our purchase decision making takes place subconsciously Gerald Zaltman (Harvard Business School Professor)
- 19. There are 2 types of eCommerce companies: Customer-centric Product-centric
- 20. Customer-centric companies care about their customers.
- 21. Their growth engine? Delighting their customers. CX NPS Data Understand the demand, emotions, behavior Buying WOM LTVDemand
- 22. Product-centric companies care about the products that they are selling.
- 23. Their growth engine? Demand-gen, products, prices Products Prices Buying Discounts MediaDemand
- 24. Nowadays, as you can find the same products everywhere… The customer experience matters more.
- 25. The Experience Economy The Service Economy The Industrial Economy The Agrarian Economy We are here
- 26. Source: Marketing-class.co.uk Differentiated Undifferentiated Market Pricing Premium Com petitive Position
- 27. “Companies should think about what they would do differently if they charged admission.” Joseph Pine
- 28. Source: Temkin, Customer Experience Matters 2016
- 29. 1 Demand Generation 2 3 4 Standard eCommerce Customer Journey Order Is placed Send Order Confirmation Order is Delivered 6 2nd order is placed (15% of customers) 5 Ad remarketing & Email blasting with discounts
- 30. Advanced eCommerce Customer Journey Order is Placed Order is Delivered Objection Treatment (if they appear) Personalized ad, email & web experiences 1 2 3 4 65 87 9 Demand Generation Customer satisfaction survey / NPS Enroll in the Customer Retention programme Send Order Confirmation 2nd order is Placed (50% of customers)
- 31. 3 Qualitative Research Reasons & Buying frictions Products/Brands Insights Which are the most valuable customers and their margin contribution? City/Location Insights Customer Experience Optimization Strategy 2 CoCA Cost of Customer Acquisition RFM Customer Segmentation 1 4 Ideal Customer Profile (ICP) Which are the most important customers - value & attributes socio-demographics 5 Buying Patterns 6 ICP Insights Anomalies Improve Ad spending Improve eMails Improve website 7 Ongoing Segemented Qualitative Surveys 8 Customer Retention Strategy 9 Ongoing Personalization Channels: SMS/Web/Apps/email/Ads/ Direct Mailing Net Promoter Score
- 32. Psychographic segmentation: more important than ever!
- 33. John Quelch, Harvard Business School Companies that put customer needs under the microscope, take a scalpel rather than a cleaver to the marketing budget, and nimbly adjust strategies, tactics, and product offerings in response to shifting demand are more likely than others to flourish both during and after a recession.
- 34. SLAM ON THE BRAKES This group feels most vulnerable and hardest hit financially, and reduces all types of spending by eliminating, postponing, decreasing, or substituting purchases. Although this segment is more likely to include lower-income consumers, some higher-income folks can adopt this frosty mentality, particularly if health or income circumstances worsen. Even essentials will be jettisoned for lower-cost products or private-brand substitutes - and they simply won't consider treats or expendables, and will postpone what can be postponed unless forced to make an emergency replacement.
- 35. PAINED BUT PATIENT These consumers tend to be resilient and optimistic about the long term but less confident about the prospects for recovery in the near term or their ability to maintain their standard of living. This is generally the largest of the four segments. Like those who slam on the brakes, these consumers seek to economize in all areas, but less aggressively. They will stock up on good deals of their essentials, or seek cheaper, less-preferred alternatives. They will cut back somewhat on frequency and quantity of treats, and emphasize value. They will postpone major purchases where they can, repairing rather than replacing; value and low-ownership costs will be uppermost in their minds for postponables, and they will give up extra features. Expendables will be deeply curtailed.
- 36. COMFORTABLY WELL OFF These consumers, the top 5 per cent in income, feel secure about their ability to ride out current and future bumps in the economy, and so they consume at close to their pre-recession levels. There is no change in their pattern of purchases of essentials, although they will be slightly more selective in purchasing luxury treats. They will still buy postponable items, but seek better quality for the price or negotiate harder. It's rare that they view anything as expendable, but may reduce some conspicuous consumption.
- 37. LIVE FOR TODAY Typically urban and younger, this group carries on as usual, not worrying about savings. They not only continue to buy their favourite brands of essentials but also stick to their favourite treats. With postponables, they may buy if there is a good deal, although if there isn't they could extend their timetable for purchase and wait. They are reluctant to consider any customary purchase as expendable, although they may not expand their consumption to new types of purchases.
- 40. What data can you use to understand these patterns? The past & the present.
- 41. RFM Groups2 Depending on the client base one can define fewer or more of the RFM groups exemplified above. For small client bases there’s no need to have a large number of groups. The idea is to have manageable chunks of people that share a particular behaviour in relation to your website. True Lovers Your most frequent buyers, have placed the highest number of orders and of the highest value. Ex-Lovers They used to be True lovers, but have dumped you. Lover Active, have placed a good amount of orders or significant value. Potential lover Potential to become active customers, have placed more orders than Flirting. Flirting Have placed more than 3 orders of high value. Passionate new guy Have placed their second order, high average order value. Platonic friend Active, have placed a moderate amount of orders or moderate value. About to dump you Rather inactive; have placed last order more than half a year ago. Fresh apprentice Fresh ones, have just placed their first order. Breakup Inactive, low value spenders.
- 42. Lovers These customers bought: > Recently > Many times > Big monetary values R F M4= = =3 - 4 3 - 4
- 43. Don Juan These customers bought: > A long time ago > Only once > Big monetary values R F M1= = =1 5
- 44. Ex-lovers These customers bought: > A long time ago > Many times > Big monetary values R F M1= = =5 5
- 45. Depending on the client base one can define fewer or more of the RFM groups exemplified above. For small client bases there’s no need to have a large number of groups. The idea is to have manageable chunks of people that share a particular behaviour in relation to your website. True Lovers These customers bought: > Most recently > Most often > Biggest monetary values R F M5= 5= 5=
- 46. RFM Groups2 Depending on the client base one can define fewer or more of the RFM groups exemplified above. For small client bases there’s no need to have a large number of groups. The idea is to have manageable chunks of people that share a particular behaviour in relation to your website.
- 49. Next steps 1. Change your mindset: the game has new rules! 2. Get everyone on the same page 3. Know your best & worst customers, understand patterns, find the winning products in your portfolio 4. Level-up your CX game: monitor what matters 5. Adjust the team, resources, budget, according to the new vision 6. Execute, measure, adapt continuously
- 51. QUESTIONS?