4mation presents The Future of eCommerce alongside experts from dotmailer and Neopost Shipping Temando.
The most innovative companies use technology to create great customer experiences. Driven by these advances in technology, your customers are now prioritising businesses that put convenience first, rather than those that compete on price and scale. As a business leader, it can be challenging to keep up.
Thankfully there are companies that are making things easier for everyone. We invited our friends at dotmailer and Neopost Shipping Temando to share their insight into how technology is helping to deliver better customer experiences.
Jason Hincks: Good evening everyone. My name is Jason Hincks. I’m the CEO here at 4mation Technologies. And on behalf of Neopost Shipping Temando, dotmailer, and the entire team here at 4mation, I’d like to welcome you to the future of eCommerce. To set the scene, I’d like to take you back to a simpler time, some might say a mythical time before eCommerce began. It was a time when parents were happier. Computers were bigger and came with a Spice Girl option if you really, really wanted it. And they were connected to your landline– oh and also, we-we had landlines. Leonardo DiCaprio looked like this. Chandler and Rachel sold a software. And I somehow thought this was an acceptable look. For it, with the 90s, and our shopping experience was quite a bit different than it was today or that it is today — if you wanted to go out and buy something, you got the family and you pop them in the car and you went and visited a bunch of stores to compare products and prices. In our minds, at the start of the day, that experience looks something like this; in reality, it turned out to be something like this.
Then in 1995, these two mysterious organizations emerged from the depths of the internet — they were Amazon and eBay, and they signalled the start of eCom’s as we know it. The early eCom landscape was pretty straightforward. eBay looked like an auction house and Amazon looked like a department store. Over the years, new players have entered the market. The common thread for the most successful entrances has been the ability to identify and leverage technology and trends to create differentiation and scale. For Amazon and eBay, it was largely the emergence of the internet. For Netflix, it was high-speed Internet access and the emergence of streaming. Airbnb saw an opportunity to leverage latency capacity in the home driven by a short supply of hotel rooms and a compelling revenue model for users. For Uber, it was the opportunity to disrupt an established model through convenience, leveraging off the growth of smartphones.
Tonight, we’ll be exploring what’s next in the future of eCommerce and where this rocket ship is heading. We’ll be joined by our friends at dotmailer and Neopost shipping. Rohan Lock will be sharing insights from dotmailer’s “Hitting the Mark” report on the state of marketing automation, and Sheeda Cheng will be discussing Neopost Shipping’s “Great Expectations” report focusing on shipping, customer experience, and the buying behaviour of Gen Z customers; and then we’ll have a Q&A session at the end. So now, it’s over to Rohan Lock who is the Regional Director, APAC at dotmailer.
Rohan Lock: If you haven’t heard of dotmailer before, I’m not going to go through a big spiel tonight, so come up and see me– you know after everyone’s had a chat. But I’ve been with dotmailer for the last 12 years– and I guess in that time, I’ve seen a hell of a lot of change. So, we’ve come from being an email platform where you can pretty much just send anything, you could literally just batch and blast at any point. Through to the days of—the early days of segmentation and a bit of personalisation, then to email automation, and now to the time when as marketers, we’re expected to be looking at data across channels or across all channels and trying to create a single customer experience. So that in itself isn’t easy, right, so—and as marketers, I guess we don’t have much time, right on our hands. So, I guess what we’re to here to talk about today is “Hitting the Mark.” But before I get there, I thought I’d share just a generic customer view which you should have all sat down and had a look at, at some point—and I guess this isn’t—this I can fit this to most businesses. And this is really just talking—Google calls these moments, right? And each one of these moments, at a time when you should be looking to re-engage with your customer. So, whether they’ve bought online again, whether they’ve just bought something from you—and you shouldn’t be selling to them all whether they’ve haven’t replenished in a certain period of time, they haven’t been back, or they’ve subscribed and then have just not come back in the next ten days and bought from me. But these are all times that you should be mapping out, right, and I think again as marketers, what we’re expecting is technology these days, we’re all hearing the word ‘AI’ being floated around. And in our industry, that means most of the time is ‘Automation Intelligence’ rather than ‘Artificial Intelligence,’ and people are sitting back expecting artificial intelligence to give us our strategy for our marketing campaigns in our life cycle.
So, I’ve kind of opened up a lot of topics there to talk about and this kind of life cycle can be fulfilled through a number of different channels as well. But what we keep finding, and although we have a number of channels our clients can use: email, and SMS, and Facebook messenger, we’re pulling data in from all these great sources. We still find is email is still at the core because it’s the easiest to take advantage of and it can still affect every single one at these moments in the customer lifecycle. So, that’s why we’ve continued on with the email; we’ve done it for the last 10 years, alright. So it’s a study that has kept evolving but the main thing with this study is it is a study of email and we keep, I guess, branching out rather than just email and say I’m looking at the entire customer experience and how email can help boost the customer experience along the way.
Now, we do it with 100 different retail brands. It’s started in the UK but now it’s the US, the UK, and we’ve got Australia for the first time, right. The report doesn’t just cover large companies and it’s not just all our own clients either, all right, so it’s actually a 100 companies that we have followed for 24 weeks. We’re not just giving them a call and saying, “Hey, do you do about [Inaudible 06:16] do you do a welcome program, what do you do for it?” Now, we’re actually following the customer experience. We’re going online, we’re signing up, we’re creating an account, we’re abandoning account, we’re buying things, and then we’re checking to see if they’re actually engaging with us or personalizing after that as well so what’s their messaging like afterwards. So that’s the value of this report. Like I said, we keep evolving it. We’ve out of Australia to the International Report now so you can download it from our resource centre, but we’ve also got a dedicated Australian version which I’ll talk about some of the stats from that tonight, and also give you some comparisons to the US and UK as well.
Okay, so these are some of the brands that we’ve—these are the brands that we went through — the 20 brands. Have I got any of the brands in the room tonight? No? We’ll talk openly, cool. [Laughter] I’m not going to offend anyone. Okay, so let’s go through—some of the top findings. I’m just going to click all these up because—we’re going to walk through each one of these and just give you a couple of examples. If you want to take any photos, then that’s one slide you might want to, but we’re going to go through each one of these findings just now. Okay, so first up, this 95% of brands are sending a welcome campaign. That don’t sound much, all right, but it’s a stat and it says that pretty much all—19 out of the 20 brands are sending a welcome campaign which is ahead of the US and the UK, right? And the main thing here to realize with the welcome series is that or welcome email, at least, is that if someone engages with those emails are 60% more likely to engage with your communications over the next 150 days, right. So, you think about all your promotions that you’re sending, alright. One, it’s just polite to say thank you and welcome them, right, whether they subscribe or they’ve bought. But two, if they’re engaging with that and they are kind of setting the tone early, then it makes a big difference to see your marketing later on as well. So some brands, they are doing really well if you want to have a look at them, recreate yourself was one playing around with some nice imagery, we had Harvey Norman playing around with some reference centres, love them or hate them, and we had [Inaudible 08:25] really nice personalised message from the CEO if you’ve ever bought from [Inaudible 08:30] it’s kind of handwritten or looks handwritten so it’s really nice. But the one that was a clear leader was The Iconic. You know, again they set the tone early clear expectations that they meet here with the welcome, so from sign up, a little welcome message but then they’ve been incentivized at sign up which again they’re delivering on straight away and they’re also pushing to mobile as well.
So again, it’s the timeliness of the email around why I’m actually subscribing and then getting that in my inbox straight away. You’d be surprised. I just bought from Next Clothing; it might not know them over here the other night from a little girl for a school uniform and didn’t get anything for probably over 24 hours from—it’s really off-putting. I’m sure you’ve all had the same experience. So next one is from our international study, we’ve got here, this is Bulk Powder. They’ve got this incredible signup form– at the start, I say incredible, not necessarily the greatest but it’s they collect a lot of data at the sign-up. Now just using that data, I think this is a really simple way to do it. They knew we were vegetarian. I might personalise with vegetarian products. Sounds really simple. Remember this a benchmarking report; you’d be surprised how many people don’t do this simple step and pay attention to what we’re saying to them.
Okay, so next one, I guess newsletter signup, big part of our new source app or account creation. Obviously, a big part of what we do and a big part of the customer experience. We’re looking for here to see availability on the site; you’ll be surprised how many people don’t do it or make it easy to sign up and receive more information. Looking at the prominence on the site so can we find it, and then the incentive as well. So again, they’re giving you personal data, right. So whatever you are collecting from them: an email address, a phone number, whatever that might be, again they’re giving you personal data. You’ve got to give something back it, doesn’t always have to be an offer though, all right? So here, great example — Cotton On, really nice popover. Not everyone loves popovers but they do work; we’ve seen up to 500% increase in database size just from a popover, all right, from some of our clients. Love them or hate them. This is a nice one; it minimizes if you don’t interact with it, obviously incentivizing there as well, nice little message down the bottom there that says, “No thanks, let me shop as well.” They can just kind of move on nicely if they want, and it doesn’t take over the whole screen — quite important over there as well.
20% of brands; so, 20% of brands don’t personalise and 80% brands were showing no sign of segmentation. And this is again something we see constantly because marketers run out of time as I said earlier, but this is the simplest form of marketing out there. This is really the technology we have available to us today, there’s really no excuse to be doing this. And what this is saying to us if you’re not personalizing, you’re not segmenting, is I really don’t care about my customer, right, and the customers are too impatient these days to for you to be doing that, so we need to be paying more attention to that data that they’re leaving behind.
So next one, so it just a really quick example here, recreate yourself again. I’m not saying these are the best emails over the scene but when you’re talking personalisation, people get really obsessed with lots of product being, you know, and me the actual product that they looked at that day or wherever it might be or some cross-sell opportunities and rest. This is a really simple one just using their name at the top and it’s around the automation or the timeliness of this email which was just a review and win. They bought something, and they get a review and win the amount. You’d be surprised how many people don’t get to this step. Again, we get a review, we can use that in our emails as well, or in any of our other communications, there’s a lot of benefit there. This is nice personalisation just around timing, right?
Okay. From that one, next one: couple up here, so the body shop—lots of points. If you’re going to use them then again make sure, right, that you add them to your emails [Chuckles] you’d be surprised when you got to go to emails and search for how many points you’ve got from a brand, but it’s so simple to just add them in; that has to be in every email obviously. Another one down here I really like, so we’ve seen up to 80%… Yeah, 80% click-through rate, so up to 80% increase in click-through rate when using personalised imagery. This is through one of our partners. That, whereby that where it ‘Welcome Harry’ there, that’s not actually typed in and that is actually a personalised image, right. So again, have to play around with some of that as well in personalisation.
I said I’d show you the Bulk Powders form; now this thing is huge, big independent and it’s there. So that’s if you missed the first time, so that, like I said, this isn’t recommended for everyone, but these guys were really high on our international study. They get people to sign up to this. Mainly look, they’re incentivizing people at the bottom but also with what they do, it’s quite important to get it right now, and people are filling all of that in, right. That’s not hurting them at all. So actually, play around with how many questions you ask because we know, as marketers, the more questions we ask, the less signup we get, right. So, do things like use progressive profiling; so ask fewer questions more often, the ones you got the answer for, should be able to just have the system take them down so they don’t show again, right. So, you’re progressively profiling that customer. All right. This did work though especially if you’re going to use, if you’re going to ask a question, make sure you use it.
Next one: segmentation. This one’s an interesting one. So, we saw the popover from Cotton On earlier. Again, they deliver here. So, we then got a welcome email but, in the email, you see right down the bottom here, so yes, they’ve delivered so they’ve given us some percentage off, but right down the bottom of the email, they’ve actually got the other brands that you’re subscribed to already. They know they’re saying already they know you as a customer, and they’ve if you notice at the top, the images at the top are also of the same brands that they’re subscribed to, and they can change those preferences down there as well. So again, just a really nice way to say, “Hey we know you as the customer, we care. We’ve delivered on our promise as well.” They also did some basic personalisation here with gender as well in their future promotions as well.
25% of brands achieved 50% or more for their email experience. Look, again, we’re just looking for things like basic best practice and things that are kind of forgotten about a little bit I think with email, things like view in browser, right, just in case the email doesn’t render properly. But really what we’re looking for is personalised content relevant to what you’ve searched, what you’ve bought, what’s the preferences you’ve given us. And we’re also looking for probably the most important one, which is optimized for mobile. You’d be surprised how many people out there, that, you’re all optimizing your sites, you’re optimizing for payments but then the thing that the customer sees probably more than they see your website, right. Unless it’s a daily deal site they’re going to all the time, is the email, right, so don’t fall over at the first hurdle, right, you’ve got to make sure that the email does render properly. A great example that we see is Appliances Online — has anyone ever bought from them before. Yeah, awesome, right. The experienced they give is just, yeah, it’s first-class. And from– I ordered for our office, literally Next Day Delivery, and any issues they’ll take…Yeah, again, have a sign up to them, follow the experience. But also, their emails as well. Here, with their content again personal but here multimedia content behind-the-scenes look, you know, what’s happening, you know, at appliances online. But also, all the way through to their offers, they’re using countdown timers as well in their offer which I know from a marketing point of view, that’s awesome because it creates urgency. But the thing here is they’re giving you an offer but then they also follow up. They’re not just giving you an offer and they’re letting you walk away and hoping you use it at all. You know they want you to buy, right, so they’re following up with these things all the time reminding you that the times out. And you’ll see here, I do render on a mobile, you know I might be the biggest fan of the design, but the single column there just makes it easy, right, less likely to break as well.
Okay, next one — again, a really-really important one is, don’t always be selling, all right? The customer wants you to have a relationship with them, right, we have to be more human online and that’s what we’re trying to achieve with all the data we’re collecting. If you’re just selling to them all the time, that friend, if you were doing that to a friend, they’ll just walk away, right? We can’t be doing that with our customers, right. We’ve got to change up the message a little bit. Here, Williams Sonoma — they do a great job. The imagery is beautiful, but also their content, short snippets, most of the time, clear easy call to action but also, they’re educating, right. So they’re giving back to the client — again, it’s not just sell sell sell, really important.
Let’s say 55% of brands are not sending in an abandoned cart. Look, this gets talked about over and over again. I still have people coming up to me saying, “No, I don’t believe it works. I don’t believe it works.” Like I said, it’s just a customer service message, right. If it doesn’t convert, the worst thing you’ve had to do is pay for an email to send out, right? You’re just reminding someone that they’ve left something behind. You know, it does convert, you know global abandonment rates sit about 69%. That’s on average, a recovery rate of about 5 to 20%, right. Even if it’s at the lower end of that goal, you’re still making money you weren’t going to make before, right. Doesn’t have to be salesy, doesn’t have to be a percentage off. There’re all sorts of theories around three emails, one email, yeah, have a play around with it, but it is one of the highest yielding email campaigns there is, all right. A good example — Temple & Webster, you know, obviously, personalise with the image, all the product, I should say, that was left in the abandoned cart—quick and easy way to go back and buy, a nice little call-to-action at the top just saying, “Hey, you left this behind,” quantity short trying to incentivize them to come back. They’ve got a cross-sell as well on the email just in case it wasn’t the exact thing you looked for and also payment options, alright. So again, simple email just—yeah, and it’s automated.
Next one—next couple— similar kind of philosophy, the product that they had in an abandoned cart, cross-sell opportunities as well. I don’t love these emails but again, it’s just a simple automated email that goes out that will make you money. All right, only 40% of brands sent an after-sale review email. I mentioned it before. I mean look, this is a simple thing to do. If someone gives you something, or they give you money in this instance, you should say thank you for shopping, and the review again can be used for so many more things, alright. So again, just to, I guess, reinforce that only 40% of people are doing that, right. You’ve got to continue, okay. You know if you are talking to a friend and you know they’ve had a great experience going– I don’t know– surfing or wherever it was they’ve been on a holiday, you ask them about that experience; that’s what friends do, right. If you want that relationship with your customer, then think about reviews as well. Some guys are doing some great after sales support — ao.com, so this isn’t the Australian Open, all right. This is ao.com out of the US. Again, really nice order confirmation email here just with the actual product. Again, you’ll be surprised how many people don’t put the actual product in their confirmations, the actual product again, and where I can get help, all right, if I need it. So again, really simple cancellation, whatever it might be, if I just want to track my order, really quick and easy to do. But all the way through their dispatch notifications to real-time delivery tracking, all the way through to this, which is right at the end, they just ask for feedback. And it’s simple but highly effective, writing from 0 to 10, and did we make you smile? There’s a really nice way to finish off a conversation or to finish off the engagement with the client.
So yeah, for those guys, the top five is a study…I don’t have a lot of time left but the top five were these guys. If you’re not signed up to their newsletters—so you probably want to have a look at them. But the winner and was The Iconic. I mean everyone knows about The Iconic — probably no surprise, but yeah, I mean they were the winner of the Australian study and they finished second in our international study out of 100 brands that we looked at that. So I mean look, it’s from there, you know, if we want to compare, I guess, The Iconic to the rest, really the standout here is the segmentation. The segmentation, their use of behavioural information as well. But yeah, by far in a way, you know the most data led out of the ones we looked at. Their emails are also pretty attractive, alright, so they’re attractive, they’re engaging, you know, they do vary up the design quite a lot as well to keep their clients engaged, and again we come back to things like automation and just paying attention to that data piece, all right, their personalisation was second.
So just in summary, it’s my time, I guess Australia versus that world. I guess what we found here is that, I guess, our data-our use of data is pretty poor, especially when we look at the US, right, who is by far away the most data led marketers that we’ve seen, you know and there is a direct correlation right between data-led marketing and the best highest performing email campaigns out there as well. We’re collecting a lot of data but we’re really not using it well. What I can say is, I’d come back to what I said right at the start: have a strategy, don’t rely just solely on the technology, build right around your customer experience, the data you collect, make sure you’re using that data, right, in some way to personalise. And then on top of that, just break it down, keep it simple use a benchmarking report like this and look at some of the simple things you can make big adjustments to, or if they can make big differences. You know if you did one new segment or one new program. When you see one new program, you hit your button. Per week or per month, you’re going to have a pretty impressive automation or customer experience, I guess, by the end of the year. So, thanks very much for your time, everyone.
Jason: Thank you Rohan, that’s some great insights there. Wait– oh!! Back again. Okay.
Rohan: Sorry, right. I should say I do have a few reports here if you want the hard copy rather than downloading it, we don’t print many obviously for obvious reasons but there are a few if you would like one.
Jason: I’d now like to hand over to Sheeda Cheng who is the head of brand at Neopost Shipping to have talk about their “Great Expectations” report.
Sheeda: So, as Jason mentioned, I’m Sheeda Cheng, head of brand at Neopost Shipping. You might know Neopost Shipping more via Temando— big, bright orange logo banner here. Temando is a shipping software company; Neopost Shipping is the parent group of Temando. First and foremost, I’d like to say thank you to 4mation and the team here for putting this together and collaborating with us on this one for event. Also, Rohan, thank you so much for your insights with the dotmailer “Hitting the Mark” report. Alright, so first things first, get out of the way, Jason is my husband and that’s why he is here. [Laughter] I did not get the gig because I’m his wife. I just want to be really transparent about that. This picture is from two years ago; there’s our dog Hitchcock, that’s our cat that’s 14 years old, Thomas, and that’s me before I was pregnant, right. I have 10 years of experience in marketing, but I really got into Temando about two and a half years ago because I saw a huge potential in eCommerce. Both as an online shopper, I shop online, I would say 80% of my purchases are online including groceries and I really wanted to get really involved in it. So about maybe a year ago, I was moved into the parent group as their global head of brand and I’ve been there ever since.
Okay, so I won’t go into extreme detail, but this is quite self-explanatory, Neopost Shipping has four product brands underneath Temando, which is Australian founded; it’s a shipping software company. ProShip is founded in the US; it’s also shipping software. We’ve got Pack City which is a smart passive Locker brand and you’ll see that around a click and collect value proposition, and we’ve got CVP-500 which is an enterprise standard automated packing system. So Neopost Shipping essentially is the division of a very old French multinational called Neopost, that’s founded in 1924.
Okay, so essentially what am I going to talk about? I really want to share with you the evolution of custom experience through shipping. And why shipping? Shipping is really a critical touch point for every online consumer. So, unless you’re buying a service, shipping is going to be part of that value proposition right. You go online, you choose something, you need to get it delivered. Shipping is really a key touch point for many retailers and brands. I’m going to do that by showcasing the great expectation report which focuses on a new generation of consumers being Generation Z. Show of hands anyone here who’s from a Generation Z person. You’re not. No, everyone’s all like me? Okay, great. [Laughter] All right, so why is this relevant to you? I think we all realise that customer experience is not static. It’s something that’s constantly evolving, so I hope that the next few minutes in my presentation, you’ll be learning something from it. And I also believe for retailers, shipping is infamously known as a loss leader and so we hope that with this presentation, you’ll be able to at least learn how to tame the beast.
Okay, so I want you to think about the world as your eCommerce oyster. If you look at the chart here in 2018 which we are in currently right now, only 55% of Internet users are really tapping into eCommerce. So, only 55% of Internet users are actually buying online. By 2022, this will grow by another 6% which means there’s almost 40% of Internet users that hasn’t really tapped into, so the potential for eCommerce to grow is massive. And if you look at a table here, you can see that the annual growth rate for eCommerce is almost 10%, whereas if you compare it to total retail, which includes eCommerce is only 5.4%; it’s moving at a rapid pace.
What I want you to think about when you look at this data is eCommerce and physical commerce, or physical retail are not two separate entities, rather if you are able to drive efficiencies between eCommerce and physical retail, that’s when you really, you know, get to drive the performance of your business exponentially.
Let’s just compare the Australian and global eCommerce market. Australia’s this way, global — the silver one at the end. What’s interesting here is that Australian consumers have a higher average revenue per user at over a thousand US dollars when you compare it to global, it’s just over 600 dollars. That indicates to me that consumers here in Australia is really, really interested in buying online. What are retailers and brands doing to really help them buy more online? If you look at the user penetration as well, it’s quite high; it’s over 70%, with about 2% more growth by 2020, whereas in the global stats, you can see is 55% right now and it will grow by about 10% by 2020.
All right. So why is Generation Z important? There are three things that I’d like you to really think about. The first one is Generation Z is a preview of all consumers. They’re basically showing how all consumers will behave today and tomorrow and they will also indicate what consumers expect from brands and retailers. The second thing is they’re really challenging the status quo. They’re challenging what is an acceptable standard in terms of what a great experience really means. And if you remember—if you recall, I spoke about how customer experience is something that constantly evolves, and with Generation Z, this happens at a-at a pace which is really-really quick. Last but not least, they’re also increasingly savvy in terms of their buying behaviour. They’re not held back by the limitations of your predecessors, such as you know, going to a shop physically; they can buy from anywhere, anytime, anyhow. And this freedom or liberty of Generation Z comes at a high price for brands and retailers. Just pulling out quick stat here: By 2020, 24% of Generation Z will have disposable incomes because they’ll be working and when you combine it with Millennials, they will make up 60% of the workforce and that’s just in two years from now.
Alright, so I’ll jump into the report. I won’t go into extreme detail if you want to know more about it, you can talk to me about it. But essentially, it covers Australia, UK, US, and France, and we published it in August this year. Right, the key findings from the report, there are three things when it comes customer experience. The first thing is customer experience is being redefined. What we mean by this, is the concept choice and convenience is no longer what it used to be, and consumers are not waiting around. They’re not going to wait until you get something fixed, they’re just going to go to somebody else. Customer experience is also quantified now. What it means, is you know online consumers now are okay with paying for services that they really enjoy. It’s no longer ‘I just want everything for free,’ but you know we always like a freebie, but they’re okay with paying something that they enjoy, and they desire. The last finding is customer experience is everywhere. There’s no stop and start when it comes to building a great relationship with today’s consumers at every touchpoint, regardless of whether you’re in control of it or not, is precious and important. This is what the ‘New Normal’ online shopping looks like. The retail landscape is always on. It doesn’t– you know, it just follows the clock, just because you’re sleeping, doesn’t mean your consumers are. It’s competitively priced. There are some things that you have to give away for free. How are you going to be able to do that without cannibalizing your profit margins? It has to be highly responsive and it has to be contextual; it has to be available online, it has to be available on a magazine, on a poster, how do you really evolve within this space? Looking at the features of a retail landscape, it really is encapsulated in what Generation Z about. The top two reasons why they say they shop online is because it’s open 24/7, and because the price is reasonable. They also have a shorter attention span. Millennials before had a 12 second attention span and Generation Z, they have 8 seconds. So how does that impact your conversion when they’re shopping online? They are also digital nomads; they’re not used to living in an analogue world or waiting around and how does that impact how you do business.
Right, so how does this translate to shipping and delivery? If you see up here in blue, the column in the black is what retailers are currently offering, the yellow is what Generation Z wants, and the grey is what the average consumer wants. As you can see, retailers are really great at offering next day shipping, but then what’s happening is, they’re losing their capabilities to offer other types of shipping. As you can see here, we can see hyper local after hours, and most particularly same-day delivery options that Gen Z really value. And they have said that if those options were offered, they would shop more online. Right, the rise of fast and convenient deliveries is something that retailers and brands really need to think about. In the green squares, you will see a comparison between Generation Z’s demands in 2017 in the darker yellow, and Generation Z in 2016 in the lighter yellow. Essentially, these are the options that Generation Z are saying that they are willing to pay for. You can see hyper local same-day express as well as weekend are things which they are okay to pay for because there’s value in it. And then what we see here extended click and collect, and locker collection, there’s less of them in 2017 who are willing to pay for it compared to 2016. This doesn’t mean that standard click and collect, locker collection are options that they do not want, but rather what’s happened is, it’s been standardized, it’s been normalised. So how do retailers and brands introduce these as free options rather than options that, you know, consumers have to pay for? Alright, so this is– I’m going to show just two quick examples. Instant gratification with Generation Z. At the end there, you can see 62% of Australian consumers really value same day compared to US which is 57%. And over here, you would see how instant gratification in terms of shipping really impacts basket size. So, 71% of Generation Z say that they will be willing to pay for more products or add more things into your basket if they can qualify for free shipping.
We spoke about how customer experience is quantifiable. This is the first report that we were not involved in, but essentially, it shows that if a business meets or exceeds customer expectations, they increase cross-selling and upselling by 140% and they also increase retention and loyalty by 74% versus 43% if they didn’t make any custom expectations. And when they underperform in customer expectations, they actually increase churn by 10%. Alright, so I only have 5 minutes, so I might jump through this. All right, what’s holding retailers back from being awesome? Sounds like it’s really easy to do, but really, it’s not. Shipping and delivery friction is one of the key pain points that consumers find and retailers’ find as well. Rohan mentioned there was cart abandon rate of about 60%. Rohan, was that right? Yeah. The number you see here is based on the fact that customers want to check out, but they could not find a shipping option of their choice. When consumers can’t find a shipping option of their choice at check-out, 98% of them globally would abandon a cart, and what’s that broken down into? 33% will abandon cart and try to buy from a bricks and mortar store. If you’re just an online retailer, that’s it. 44% will abandon cart and try to buy from a competitor; that’s even worse. And then 21% will abandon cart and take their chances at a mall. Either/or unless you have your brand all over in a physical environment, basically, you’ve just lost a customer simply because you don’t have a shipping option of their choice.
Shipping cost is extremely high, reason why carts are being abandon, and one of the issues that retailers– that we found retailers had was how do you manage, we know, putting together fast and free shipping if it’s really expensive to do that, and that’s something that technology can really help with. These are the three common things that we hear when we speak to retailers on a daily basis. First, they can’t justify free and fast shipping. Second, they say that their shipping and fulfillment process is too time-consuming; they don’t have the right people in it, and it’s really expensive or they’ve been undercut by the competition. So just by putting together three simple ideas using technology, you can apply shipping rules which helps with working out how you can offer free and fast shipping, you can look at process automation. Automation is one of the things that Rohan also mentioned, how do you really leverage that and automate things which are previously manual, and you want to be looking at tapping the ‘Best of Breed’ customer experience. Okay, so one of the other questions that marketers often ask me is, “Isn’t shipping and supply chain simply a back-end problem?” My response to that is, “No,” because if you have poor shipping experiences, it impacts you in four different ways — retention, reputation, referral, and recommendation. The most important data to get out of this slide essentially is the first one here — when a Generation Z customer has a great shipping experience, 71% of them tend to come back and to shop and they would want to shop with a retailer again. But if the shipping experience sucks, and that 56% will say, ‘No, forget about it; I’m never going to shop with you again.’ Think about that. Previously, shopping is quite a linear journey — awareness, familiarity, consideration, purchase, and then loyalty. It’s no longer like this anymore; it’s cyclical. At each and every touch point, a customer is either convinced to buy from you or convinced not to buy from you, and that goes with your current customers as well as prospective customers. All right, so I’ve come to the end of the presentation. We’ve got four very handsome boys in the room with me: Justin, Jarrod, Mervyn and Matt. If you have any questions around shipping, software, custom experience, or report, please reach out to it any of us and that’s pretty much it.
Jason: Thank you Sheeda for that presentation. I guess the cat’s out of the bag. The reason why I’m here is because I’m Sheeda’s husband apparently. The other thing I learned is that there’s four handsome men in the room, I didn’t make the list, unfortunately. That’s my life. So last and potentially least, I’d like to introduce our last speaker which is me, and I’ll be presenting our recently published insight into “The Future of eCommerce.” Firstly, a little bit about 4mation. We’re a full-service agency and our mission is to help clients innovate faster. We recently celebrated our 17th birthday. We’ve been around a little while. And we have a team of 90 here in our Surry Hills office working across a broad range of clients. We have deep experience in strategy, design and development. Okay, enough about us, let’s get on to the insight. As I mentioned earlier, the adoption of emerging technologies has helped companies establish market leadership and redefine their industries. We recently published insight into the 20 most innovative eCommerce trends of 2019. And you can see them here on the screen. There’s quite a lot of them. I know this can seem a little bit overwhelming and if you’re not careful, eCommerce can start to feel a little bit like an arms race. So I’m going to explore a handful of trends that we feel are going to give you the greatest chance of competitive advantage. Okay, let’s start with a piece of low-hanging fruit — Payment Options. Consumer purchasing behaviour is evolving. People are now shopping on mobiles more than ever. In fact, a recent PayPal report estimated that 72% of Australians smartphone users are using their devices for payments. In fact, payment issues represent 50% of all abandoned carts. I have to say we’ve had quite a varied approach to the reasons for abandoned carts but they’re all true I promise. But what does this mean for a business?
I want to start with payment options. We know the two of the most important things to consumers are quickness and– quickness and ease, and the availability of their preferred payment options. And there are three payment options that we think you should be considering. The first is digital wallets — digital wallets such as Apple Pay, Google Pay provide users a secure way to store sensitive credit card information, removing the need to reach for your wallet or your purse. A 2017 Baynard Institute study — in that study, it suggested that 20% of online consumers said that long and complicated checkout was the main reason why they abandon their carts, yet another in this complicated reason why people abandon their carts. For mobile shoppers, digital wallets make checkout as simple as pushing a single button. The second payment option that we want to explore today is ‘Buy now, pay later.’ Platforms such as Afterpay, and Zip Pay allow consumers to buy products immediately and then pay for them in instalments. Australia Post ‘Inside Australian Online Shopping’ report estimates that these services accounted for 7.7% of online spend in 2017, or a whopping 1.6 billion dollars. These have particular appeal in the 18 to 39-year-old demographic. The third payment option that I want to talk about tonight is cryptocurrencies. I’ll explain what crypto is in case you’ve been living under a rock, but cryptocurrencies like Bitcoin and Litecoin are a form of electronic currency verified using a technology called blockchain. And while none of us are really sure where the cryptocurrency journey is going to end, the reality is there’s an increasing number of online shoppers using cryptocurrency, and it’s estimated that by 2024 that number will grow to more than 200 million. So, a legitimate segment of your market.
One of the best ways to fast-track the amount of payment options available and that you accept is to utilize an innovative payment gateway like Stripe. These instantly give your customers access to a range of options like Apple Pay, Google Pay, and even WeChat Pay. They offer competitive rates and a host of integration options. With so many options on the table, you know, as a business where should you start? We suggest that you start with your audience. For example, if you’re looking at digital wallets, go to your analytics; if you’re finding that you’re receiving a large amount of iPhone traffic, then we suggest you start with Apple Pay — pretty straightforward.
Okay, now I want to move to a couple of technologies that we believe will start to set your business apart from others. Personalisation is arguably one of the most– one of the most fast-moving aspects of the eCommerce landscape. In Rohan’s presentation, he talked a lot about the importance of personalisation. Customers expect a well-curated and highly relevant environment. This is driven by the adoption of services like Netflix and Spotify. Think about our 90s example before and try not to remember my photo, but our television viewing was limited by the linear nature of programming. You’d probably get some cartoons in the morning, you’d get some news in the afternoon, maybe a movie in the evening and watch some sport on the weekends. Today, services like Netflix ensure that you’re only served up content that relates directly to you. Personalisation allows us to replicate and yet replicate that in the digital environment. Only serving up content that aligns with your customers’ individual values, interests, and circumstances.
So how do we do that? I want to do that by talking about the data points that allow us to personalise the customers journey, and I’m going to start on– I’m going to list three of these that we believe are a good starting point to tailor these, because there’s quite a few on this screen, and it’s important to know where to start. The first is generic data. For example, using a weather report can help you personalise based on circumstance, elevating raincoats and umbrellas to those customers who are stuck in the rain. Behavioural data is the second one. Establish a profile based on the products that your customers have viewed. It’s fair to say that Sheeda and my online experience at the moment is peppered with baby strollers and car seats. AI, machine learning will help you turn these insights into predictions of future behaviour. And the third data point I want to talk about tonight is collected data, and that’s deepening that profile with the information you collect from your customers. We’re not just talking about name, age, and gender but recent purchases, key milestones, like birthdays and anniversaries, as well as products they may have abandoned in their cart for the various reasons that we’ve spoken about.
The next thing I’ll talk to you about is chatbots. And chatbots are an interesting-interesting topic. Normally, the mention of chatbots often draws groans and eye rolling but the reality is these little buggers are just quite misunderstood. What is a chatbot? In its simplest form, they are– they use a computer program that automates certain tasks by chatting with your customers through a conversational interface. On the screen, you’ll see a great example from cosmetic retailer Sephora that provides personalised customer service 24/7. AI, machine learning, and natural language processing are helping to create human-like interactions which improve with every conversation. The Sephora chatbot provides personalised product recommendations. The ability to try on those looks using augmented reality and then make purchases without ever having to leave Facebook messenger. Customers are no longer required to navigate through pages of content to find the products that they want, eliminating one of the most common frustrations for mobile shoppers.
Finally, we move on to the disruptors. These are the technologies that are the hardest to implement but have the greatest potential for differentiation. Almost overnight, voice technologies have infiltrated our homes, our officers, and our cars. Your customers are leading busy lives and they want to maximize their time and voice is a great way to multitask. For me, conversations with Siri have become commonplace in every car trip adding something to the shopping list, creating calendar appointments or sending text messages. But what does this mean for your brand? Earlier in the year, we published some insight on voice technology identifying two key themes for business. These were utility and availability. Utility — these are the things that make your customers lives easier. Platforms such as Amazon Alexa and Google assistant are providing online retailers with the ability to create voice first applications for their customers. So if you are a pet store, you can design a voice app that will allow your customers to order dog food when it’s running low. At the brand level, you can take that one step further by answering questions and providing advice on how to take care of your dog. Availability is helping customers find your store and product. Voice search creates a unique opportunity for you to connect with your audiences in real time. In fact, by 2020 is estimated that 50% of all searches will happen through voice. Using the pet store example again, potential customers might ask Google, “Where can I buy dog food in Surry Hills?” A good place to start with availability is optimizing your online content to be more conversational. Think about how you may answer customers’ queries out loud. Google “who can help me define and execute my eCommerce strategy.”
And possibly one of the most exciting trends, and the last one of our evening is augmented reality. One of the major problems online retailers face today, when compared to bricks and mortar stores, is that that you can’t experience their products. Augmented reality is here to bridge the gap between retail and online creating unique and tangible experiences. All of us have been in the situation where we’ve been in a furniture store and we’ve wondered how that sofa will look in our living room. As you can see on the screen, IKEA is using augmented reality to bring its products to life in your home, or in our case in our foyer. We encourage you to explore the experiences that you can create in your business to help customers experience your products in their environments.
So what next? We’ve covered quite a lot of ground tonight but here are a couple of key takeaways for you. Number one: understand the behaviour and needs of your customers and focus on solving their highest order problems. Number two: define a strategy that focuses on the trends and technologies that give you the greatest differentiation. Three: leverage products like Temando and dotmailer freeing up your development investment for truly unique innovation. And four: doing the key things well will add more value than doing everything on the menu poorly. So if you like some help defining your strategy, 4mation is offering a complimentary to our workshop for tonight’s guests so please see one of our team to book yours. Okay, it’s now time for our Q&A. So we’re going to get– we’re going to get Rohan and Sheeda back up on stage, and they’re also going to be joined by Regan McGregor who is our head of marketing here at 4mation. And I’m going to help move the chairs.
Jason: Hello. Okay, I’ll be the roving mic for the night. Who’s got a question for our panel?
Question: Oh hi, as we have entered the data change, when the actual item value increased; a lot of it is about fashion but if it was a high-end item, did the data change very much?
Sheeda: Who is this question for? You want to go for it?
Question: So, if the-the item price is– if it’s a high street fashion which could be is a $20, if this was an item that’s $500 that you’re buying through a cart, did the data change very much in terms of abandoned carts and so forth?
Rohan: Abandoned cart? No. I think, look, it’s um… yeah, no. ‘No,’ is the simple answer on that. I think it’s still comes back to you might have a lot of data or a bit more insight into that but from our point of view, ‘no.’ I guess the decision still comes back to the experience you’re giving throughout the entire process on the site — the personalisation on the website, the personalisation if they do subscribe that probably, at $500, they’ll probably going to do a little bit more research around it, there, are your, the entrusted, I guess, brands are either one they’re learning from in terms of video content as well. I guess it’s all leading up to that but I don’t have an exact step for you though. I’m assuming it would change a bit but I don’t have that data unfortunately.
Question: A pair of shoes, I don’t mind, [Crosstalk]
Rohan: In terms of abandoned carts, people try and game in a little bit as well, they throw it in abandoned cart– they– I do it for myself where I’m remind myself to come back as well. So look, I’d– yeah, I don’t have the exact data on the more expensive the product, so yeah, I don’t have that data.
Sheeda: What’s your name sir? Mark, hi. We have some data around that, so we do find customers who have higher basket sizes when they– when they want to purchase something, they have a few patterns which are quite common. One of the things is they really value express shipping or anything which is a premium shipping options. And when they don’t have that option, it actually increases the cart abandonment, and so it makes logical sense, right? If you’re paying for something and it cost you an arm and leg for instance, you want it right-right there, right now. We have seen that data across the past 2 years that we’ve surveyed consumers.
Jason: Thank you. Who else has a question?
Question: [Inaudible 55:31] I’m just wondering when it comes to selling medication [Inaudible] in terms of the data you collect on consumers and [Inaudible] and you engage them with reminders or along their purchase journey, you know, when you start following them with, “Have you forgotten?” Or reminding them to potentially cross shop. In terms of the retailers that you’re looking at, what does your research sort of suggest? Is it, would you take a different approach because it’s a lot more sort of privacy involved and–?
Rohan: Yeah, I think… again, it comes down to when you first obtain that customer, so whether it’s just through subscriptions so they’ve just given you an email address, that’s it; it’s just under their expectation, right. If you’re– again, if they’ve subscribed and they’re not– and you haven’t told them you’re going to send them an email every day or every week or every month, doesn’t matter the product, it’s going to annoy them, right? I think the– you know if you’re talking about replenishment and getting into that sort of things, well that’s different — that’s showing you know your customer. So again, that’s not the volume of email — the more you send, right, the more money you make which is why there’s so many spammers out there and so many people just batching and blasting and not paying attention to personalised and segmented content. Sorry, I should turn that on. But yeah, just answered your question straight up, it’s really about setting the expectation upfront and then the communication can be as much as you’ve told them.
Question: If I’m one of the retailers, I’ve challenges sort of [Inaudible 57:08] that would be relevant for them?
Rohan: Yeah. Look, I think if you’re being a bit—we have the ability to—if you’ve sign up a client or you got someone subscribed, and we can see what they’re looking at online. If you’re being that, speaking you’re sending them an email that afternoon saying, “Hey, I noticed you looking at product A,” you know “at 3:20 today,” probably going a bit too far and you’re going to scare the client a little bit. I mean we have the data, right? I think it’s just about being smart how you use it, and again it’s just paying attention to your unsubscribe rate, it’s paying attention to you know your spam rates and the rest of people are complaining as well. But again, I keep coming back to if you plan out that strategy and what you think that customer journey should look like. If they’ve inquired on three or four different products and they get a couple of emails in a day then again that’s not a bad thing, right, because they’re potentially expecting it.
Sheeda: One of the things Rohan that you also raised very well in your presentation was the concept of personalisation. So obviously, as you spoke about healthcare is a bit sensitive, people might not want to open your emails and see something that may potentially embarrass them but, you know, it could be anything around contextual commerce where perhaps you send them a Facebook message versus an email or you combine it. So there’s many ways that you can test it I think.
Question: I’m intrigued at some of the feedback and I really appreciate the stats that you’ve reviewing [Inaudible 58:59] such a basic level [Inaudible] marketing campaigns and email engagement only channel, and even that shipping options and payment become differentiators to all the scary debates, I think, but I’m great that there’s a micro opportunity for you, I’m intrigued most of all by the last slide, [Inaudible 59:16] what are the some of the leading behaviours you’re observing across your clients? [Inaudible 59:23] things like marketing automation and order fulfilment become commodity or capability that every company should have online. What are the strategic investments that you’re observing around what differentiates company A with company B, presuming they have a base level of maturity [Inaudible 59:40]?
Jason: Yeah, I think it’s really a question. What we’re seeing with our customers is that, you know, as you said, those service are becoming much more commoditized, there’s availability whether is available as third part product or part of your current environment so you know with your in the Euro environment or AWS environment, you know quite often a lot of those things that we would be building are now available pretty readily. And so really it’s about having a greater understanding of your customer profile and focusing your development activity in that space. So what are the things that are going to be most appealing? What are the innovations that you can create? And those innovations don’t always have to be blue-sky innovations, they can often be maybe investing in some integration with your legacy systems is the most appropriate innovation for your business at the time. So I think it’s not so much—I mean I’m not quite sure I have a compelling answer as to what that investment should be. I guess the inside is that you have the opportunity now to select and be very strategic about where that investment is because you don’t have to build everything, you know, which is kind of weird coming from an organization that builds stuff but the opportunity it gives us is to work with our client in a very strategic way so that we can add more value rather than just building the shopping list of things…Anyone else have any more questions?
Question: Just in terms of your engagement with retailers more in the healthcare sector, what do you find is their biggest challenge to tap into the whole eCommerce space, because I find a lot of times when I personally engage with them, they pretty much use it on their platform as a marketing tactic to drive customers in store and you’ll be essentially paying for that marketing immediately on their platform. Do you find that there’s going to be a change in that, and do you think is their biggest barrier?
Rohan: I think the biggest barrier—and I want to say the healthcare sector—the biggest barrier that we that we see—and I guess I’ll speak from a marketing person’s point of view as well, it’s just, again, there’s all this data around and we kind of leverage a lot of data and trying to get access to and have people understand it, you know, well not in health sectors a bit different [1:02:23 inaudible] more money depending on how big company is but…Yeah, just leveraging that data is really hard and we’re buying the systems that are telling us they’ve got all these bells and whistles. To get the most out of those systems, we’re using kind of 5% of the ability. And that’s why I come back to this is a benchmarking report for email, but it’s–you talk to so many of these clients for Adobe or Oracle or any big cloud software solutions, and they’re pretty much using them for email most of the time.
I still say come back to any of these applications or any of these systems you’re buying; use them, get hands on them before you’re just listening to the marketing hype of them. Because that is the biggest challenge right there, the speed of use of that platform, the investment you’ve got to make outside of just buying it, and then to get the experts in and then the agencies on top of that. So it’s not just the upfront costs. I think that’s the biggest challenge that we’ve got right now. And then driving people in store, that seems like great examples around now see Foley’s playing around with magic mirrors and trying to use their online data to help personalise some of that experience as well. They’re not doing that straight up front but they’ll be doing that—I don’t know if you’ve heard of these magic mirrors; you go in store, you go into the change room, you’ve got a medium and you want a small or large and you can press a button and say you get me that in this or assistant that’s the simple form of a but that’s then going to potentially log into your online data for web behaviour, potential to give you recommendations. I mean that could get a bit spooky but it’s a facial recognition as well. I know that could creep me out if I’m getting changed in front of that mirror.
So there’s so many cool things that we can do there. I mentioned augmented reality. Shopify mentioned a few weeks back they were talking they’re you know they’re trying to build it in to their to their platform. But they’re talking to some of the—like the biggest thing with augmented reality with things like IKEA is doing I guess the imagery and getting the 360 view of a product and then just being able to deliver a good experience; they’re playing around. And I reckon it could be as cheap as 100 bucks for some of these product releases. So that’s just a guy standing up there; I haven’t [1:04:45 inaudible] any of it, but there’s some cool things around how you can take that in-store experience into work or anywhere with augmented reality. I also spoke about things getting rid of a pop-up stand as well so we pay a lot of money with pop-ups, and they’re using augmented reality making a park. If you’re there at that point, you know, you take a picture of the tree or whatever easier you know that’s you get the offer only if you’re there and there so you’re getting away without the pop-up, without the staff, literally just have to be in the park at that time. It’s pretty cool an easy way to have a virtual pop-up.
Jason: Time for one or two more questions if anyone has any?
Question: Jason just touched on a lot of the [1:05:35 inaudible] Blockchain, AR…So Regan what do you say is excelling at a rapid pace in the next year?
Regan: I think probably in the disruptive space it is definitely voice has a lot of potential in the Australian marketplace. It’s being set up in US for like eight years, like, Alexa has pretty much taken that by storm. And if you look at the statistic that gets thrown around a lot which is 50% of well people are going to be using voice search in 2020. You think in the Australian market that’s not possible but in other markets like the states in the UK people use it all the time. So I think voices is the one that has a huge amount of potential, especially in this market where it’s only just recently been introduced but the rapid adoption of it is…Yeah, it’s rapid.
Jason: And a reasonably low barrier to entry as well.
Regan: Yes, absolutely.
Sheeda: Well I was going to say shipping but I’m biased.
Jason: Okay, well, if we have more if we have no more questions, I’d like you to thank our panel. Thank you.
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