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The coronavirus crisis not only creates losers, but also some winners: online retailers and delivery services in particular, as well as online platforms for tutoring, fitness or cooking are all currently experiencing a massive sales boost. Social distancing is shifting both shopping and communication even more towards digital, which offers great opportunities for providers of such online services. However, even German SMEs that have found themselves in crisis, should perceive this as a digitalization push and initiate the necessary, in some cases long overdue transformation processes.

What does that mean in concrete terms? What steps should companies now take to digitalize their product portfolio and compensate for lost sales? Both B2C and B2B companies have a range of e-commerce measures available to them that make sense in the current situation.

In the B2C sector, action must now be taken quickly.

1. Discounts as an effective means.

Massive discount battles can currently be observed in the B2C sector. In the fashion industry especially, suppliers are currently trying to get rid of their seasonal goods. In addition, price reductions are also ensuring the liquidity that is urgently needed at the moment. The highest possible surcharge can be achieved with the right support through special newsletters and an increased and effective use of social media.

2. Through interactive features directly at the customer.

Keyword: Social Media. If a certain type of customer communication has been given a major boost as a sales channel during the crisis, then it is interactive features such as live chats and sales via live streaming that are most effective. These should definitely be integrated into the e-commerce strategy. The case of the Chinese cosmetics brand Forest Cabin, whose sales had slumped by 90 percent, shows what a great opportunity this offers. After a radical change of strategy with live streaming as the central sales channel, not only were all previous losses made up for, but just two weeks after the initiative was launched, the daily sales of the previous year were exceeded.

3. Digitalising loyalty systems.

Another tool that can be easily digitized are the well-known loyalty systems. For example, a well-known German perfumery chain has over 44 million loyalty cards on the market. These are well suited for contacting and retaining customers during the crisis. This applies in particular to older customers, whose willingness to use digital loyalty programs is significantly higher due to the crisis.

4 Exploiting the online marketplaces boom.

It’s well-publicized that Amazon, Alibaba and Co. are the big winners of the crisis in terms of increased market share. And others can also profit from this. These marketplaces should now be used as (additional) sales channels to take advantage of the current boom in digital marketplaces for their own business.

The Crisis as Digitalization Excellorator

Typically, transformations in B2B business are somewhat slower and are not implemented as quickly as in B2C. However, due to the massive impact that the Coronavirus crisis is also having on B2B companies, rapid action is now also required. The following four points are particularly important and effective.

1. Move Customer Services personnel to Home Office.

Customer services such as call centers and sales services must be made fit for the home office in order to continue to offer all necessary customer services and to be able to generate new business digitally. The fastest possible implementation is crucial here, since such services are needed at all times and this transformation is complex and extensive.

2.Digitalization of the Customer Journey,

The entire customer journey is currently shifting to online business, also in the B2B sector. As a result, all companies whose business model was primarily or even exclusively offline now have to invest more than ever in building their own service platform. This is the only way they can absorb the losses in offline business through online trading.

3.Agile working methods are more efficient than ever.

The crisis requires faster action, and budgets are now only planned in the short term and screened several times. To meet these requirements, agile working methods are a very good tool. A joint sprint every 14 days to redefine what is important facilitates an effective response to all eventualities and developments.

4.Sufficient server capacity is the A&O.

However, implementing all these measures is of little use if the website or even the web shop collapses during a run on your own sales platform. It is therefore extremely important to ensure sufficient server capacity and performance, either in-house or with an external service provider.

Companies that have already implemented some of these measures before the crisis are currently finding it easier to master them. However, the crisis mode in which our economy is currently operating should be seen as an opportunity to make up for lost time or to build on the digitalization steps taken so far. It is now more important than ever to implement the above-mentioned measures and to perceive this crisis as a catalyst and accelerator, because those who take the right steps now can emerge stronger from it.

Digital is where consumers are watching brands.

Digital India is the big buzzword on everybody’s lips these days but the scale at which digital penetration is about to explode will ring a bell in your mind.

The key to success for any business in India, is to have a strong digital presence these days. Relevant content on mobile which entertains, informs and engages the consumer is definitely a winner for the 4-screen Indian viewer. Indian internet users who are living in metro cities spend about 24 hours on the internet every week. [Daily the Germans spend at least 2:08 hours online. Users who also go online with mobile devices spend 2:43 hours a day (Source: http://www.ard-zdf-onlinestudie.de/). That’s half an hour less than the Indian users.] Women internet users are rising but the average time spend by women is less than men. However, there is a huge demand on content online. Indians are spending 9.9 hours per week watching traditional broadcast TV, parallelly they also browse smartphones, stream video and watch TV on their laptops or smartphones.

Video Content Consumption

Indians are mostly engaging for downloading video. 82% India’s video streaming audience access video content every week. India’s massive smartphone user base an average video streaming time of 7.4 hours per week. This creates a great opportunity for content creators and distributors so there is an enormous potential for content distribution on digital devices.
[Europe is way behind: http://www.nielsen.com/content/dam/nielsenglobal/eu/docs/pdf/Nielsen-global-video-on-demand.pdf]

What are Indians watching?

1Movies94%
2Entertainment82%
3Music Shows / Music Videos77%
4News/current affairs from local TV networks77%
5News/ current affairs from overseas TV networks70%
6Local drama series69%
7Lifestyle68%
8Local sport, available on local TV66%
9Overseas drama series65%
10Documentaries60%
11Overseas sport not easily accessible on TV59%
12Children’s programs32%

Source: Nielsen (2015 VOD)

Research Online – Purchase Offline

Consumers in India are researching for online information on any product they have to purchase. They are reading recommendations, people’s experiences, seeking digital opinions before they make a final purchase on goods/services. Recommendation from social networks or friends is something, which is highly in trend these days; a lot of brands are looking for testimonial based ads with real consumers.

The Smartphone Consumers

The number of smartphone users growing everyday, at a very fast rate. There are 170 million internet enabled smartphones currently in India with about 3 million added month on month for the next one year. There is also a boom in “app” business to woo consumers.

Ecommerce

Globally Indian ecommerce market is to grow fastest. Today ecommerce is an indispensable part of every Indian’s life today, with homegrown brands like Flipkart, Snapdeal, Myntra, urbanclap wooing the consumers with different tactics every few weeks while Amazon still going strong to provide the bigger platform amongst all. Today ecommerce is offering all kinds of goods and services at the door step of the consumer. Convenience is the key here across all categories of groceries, beauty salon, taxi, solutions, FMCG etc.
The ecommerce sector has seen unprecedented growth since 2014, almost by 34% compound Annual Growth (CAGR) from US $ 3.8 billion in 2009 to US $ 16.4 billion with a projected growth to hit US $ 100 billion by 2019.
Increase in the online shoppers in India from 20 million in 2013 is to 40 million in 2016.

Factors that foster growth in the current Indian landscape are:

  1. Increasing disposable income across households
  2. Expanding Urban scenario
  3. Small families
  4. Evolving preferences
  5. Ecommerce

 

We are looking forward to dive deeper into this discussion with the “Serviceplan International Roadshow: INDIA INSIGHTS” on Tuesday, November 22nd 2016 at the House of Communication Munich. Are you interested in participating in the event? Please contact the dedicated event team via email. The number of participants is limited.

Download invitation.