Asia-Pacific commerce trends: shift to digital creates revenue rewards has been saved
Asia-Pacific commerce trends: shift to digital creates revenue rewards
26 February 2018: A new Deloitte Access Economics report for Sitecore, the global leader in experience management software, brings fresh evidence on commerce trends in Asia-Pacific, quantifying the digital dividend for businesses in the region: a 5% shift of customer purchases to digital channels generates a 3.5% boost to revenue growth, equivalent to US$3.5 million additional revenue for a business with revenue of US$100 million.
The Asia-Pacific commerce report is based on a survey of over 1,000 businesses in the Asia-Pacific, including Australia, New Zealand, Japan, China, India and Singapore.
The report’s key findings are:
- The use of social media, apps, websites and other digital tools for sales is expected to grow, with businesses aiming for a 5 percentage point shift in sales out of traditional channels like bricks-and-mortar and into digital, following customer trends online.
- Businesses face an emerging risk from sales channel fragmentation, with many offering up to 8 channels for sales – while adding directly to costs, it can also be harder for businesses to achieve consistent experiences and to achieve system compatibility. The average business in the region is using 5 channels, with not one channel accounting for more than 25% of sales, making it hard for businesses to prioritise their efforts.
- Digital tools help businesses keep up with competitors (cited by 10% of businesses) and drive sales (17%), but they are more than just a shopping cart; improving the online experience is a priority for three-quarters of businesses (76%) because of growing recognition of the importance of experience commerce, the focus on an end-to-end personalised customer journey and using digital channels to also build engagement and brand.
Deloitte Access Economics partner, and the report’s principal author, John O’Mahony, said: “Digital strategies can’t be thought of as simply online sales to reduce costs. Consumers want better experiences across multiple channels. Businesses in the Asia-Pacific region are aware of just how pivotal having a focus on the customer journey is, with over 80% of those we surveyed agreeing that continual engagement is important.”
Deloitte Digital partner, Jason Hutchinson, said: “Growth in online competition and the changing purchasing patterns of consumers have led to a need for businesses to improve the customer experience across physical and digital purchasing channels, allowing a consumer to seamlessly interact with the business online and offline. ‘Experience commerce’, a focus on the end-to-end ecommerce journey using personalised content, can assist business in making the most of each interaction, strengthening customer loyalty and revenue generation opportunities. Our report has found that a shift of 5% of your customers’ purchases to digital will see a 3.5% rise in revenue growth.”
While there are many digital channels available, websites and email remain the centrepiece of most digital strategies because of their effectiveness in providing information to and communicating with customers. 72% of surveyed businesses in the Asia-Pacific region noted that a website was very important to their business operations, a much higher proportion than other traditional or digital channels.
“This reinforces that ecommerce needs to be considered as more than just an online shopping cart,” said Anthony Chan, Sitecore Head of Strategic Products for Greater Asia. “The technology that powers digital commerce needs to help businesses manage the end-to-end customer experience. It’s not just about the transaction—it’s about the overall customer experience, online and offline. And businesses need digital marketing technology that supports that.”
“The need to maintain multiple channels can create problems for businesses,” said O’Mahony. “The average business in our research makes sales through five digital and physical channels, with each accounting for less than 25% of sales. Sales through a number of channels poses the risk of friction between channels or the risk that one is detracting, rather than adding to the customer experience. This is why some of the expected productivity benefits associated with digital commerce are often not being realised.”
Over half (54%) of the businesses surveyed had lost revenue or sales through inadequate commerce platforms.
While businesses in the region look to increase their online operations, they are facing barriers to further digital adoption – in particular:
- 25-28% of businesses in Australia, New Zealand, China and Singapore cited integration into existing systems as their biggest challenge
- 26-31% of businesses in India and Japan cited cost as their main barrier.
“Obviously there is no ‘one-size-fits-all’ approach to commerce operations. However, businesses that do not recognise the changing needs of the modern day consumer risk being left behind. A streamlined digital marketing and commerce system, one that supports a bigger focus on personalisation throughout the entire customer experience, will help business in overcoming these changes.” Anthony Chan from Sitecore said.
The report identified three key actions for businesses to improve their focus on experience commerce:
- Embrace the multi-channel customer journey and ensure a consistent experience across physical and digital channels
- Invest in an integrated and consistent system that can bring customer data together from multiple sources while increasing efficiencies
- Analyse customer data and increase the scope of personalised communication with customers.