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Next to Zoom meetings, fast-moving consumer goods (FMCG) was a big winner of the COVID-19 pandemic. According to Kantar, it’s the fastest-growing segment in eCommerce at nearly 30%, and of all the shopping channels in Southeast Asia, online brought in the greatest number of new users during the first half of 2021.
But sustaining that momentum into 2022 will prove difficult, expensive, or both. For brands, competition for online shoppers has risen by an order of magnitude. Both eCommerce early adopters and newcomers are struggling to stand out and win over new customers, retain existing ones, and deliver a personalised, seamless experience.
This article looks at the three biggest pain points FMCG brands in Southeast Asia will face in growing the eCommerce pie this year as well as how marketers can turn those problem sets into opportunities.
Since the start of pandemic, FMCG brands have poured massive marketing resources into driving traffic to their eCommerce stores on online marketplaces and Brand.com – but those efforts don’t always translate to sales. What’s missing is accurate audience targeting and the use of data and analytics. As customer journeys become increasingly unpredictable, the old practice of defining a target audience based on broad assumptions about customer personas is like throwing darts in the dark.
Solution:
By tapping into customer data, FMCG marketers can find the right segments to activate. Brands already have a slew of useful data from past campaigns and transactions that can be mined to discover the following about customers:
Those data-powered insights will not only help marketers find high-potential audience segments, but they could also unearth the trigger points that will make customers hit “check out”. Brands can turn to artificial intelligence-enabled tools such as ADA’s Consumer Insights Explorer (CIE) to build target audiences or to frameworks like Smart Targeting.
With cosmetics, product testing and “try before you buy” are critical elements of the customer journey. Customers like to see how a certain colour pigment fits with their skin, for instance. But in the wake of COVID-19, many Southeast Asian countries restricted most, if not all, in-store cosmetics testing. That policy remains in effect, so even as footfall in shopping malls recovers, customers are still denied the full experience. And because eCommerce stores can’t let online shoppers try on products either, consumers were forced to reach out to customer service agents and ask for recommendations for their skin tone and preference. But live chat recommendations provided by human agents on a one-to-one basis are neither cost-effective nor scalable.
Solution:
As a Shopee-certified eCommerce enabler, ADA helped clients implement exclusive features on their Shopee stores such as BeautyCam – a tool that allows consumers to test out cosmetics online. By clicking “TRY THIS SHADE” on BeautyCam via a mobile device, an online shopper can virtually apply a chosen shade on their lips, eyes, and cheeks. Moreover, ADA leveraged its end-to-end digital marketing capabilities to drive high-intent traffic to those stores, which improved sales conversions even as live chat queries fell.
Before the pandemic, FMCG brands tended to carry fewer inventories for eCommerce as their physical outlets were the primary source of revenues. So when demand for online shopping shot up amid COVID-19, most brands were caught off guard. They either didn’t have the inventory to meet demand or lacked the means to fulfill orders at the speed of digital, resulting in significant lost sales. Shoppers who were less loyal could easily turn to vendors that had stock or that could guarantee fast delivery, especially given the heightened uncertainty caused by the lockdowns. Worse, the pandemic has permanently increased customer expectations for on-demand delivery, putting further strain on eCommerce logistics for years to come.
Solution:
A quick win is to work with eCommerce enablers that can provide full-service supply chain and fulfillment services, from orders through to last-mile delivery. A big win would be to invest in warehouses or outsource them to third parties – a trend that has seen rapid adoption among consumer businesses since 2020 – to ensure the bulk of inventory is on standby. For FMCG brands, the benefits of investing in warehousing include:
Although lockdowns and pandemic-related restrictions across the world are gradually easing, eCommerce looks to be anything but. Consumers’ habit formation around online shopping is poised to become entrenched thanks to the added convenience and value of digital. FMCG brands should build on the eCommerce growth they experienced during COVID-19 and endeavour to sustain it in 2022.